Service Recovery, Satisfaction and Customers’ Post Service Behavior in the Malaysian Banking Sector
Abstract
Financial services sector has become so competitive after Malaysia government’s liberalization policy. In order to address this intense competition, banks have shifted their strategy from product-centered to a customer-centered strategy. This study is to test a model related to the relationship between the service recovery, customer satisfaction and the after purchase behavior by the customers. To test the proposed model, 370 self-administered questionnaires were distributed. The analyses based on Structural Equation Modeling (SEM) reveal that there are direct relationships between perceived distributive justice, perceived procedural justice, perceived interactional justice and customer satisfaction in regard to service recovery. The results also show that customer satisfaction increases the level of trust among customers. There is also a high possibility that satisfied customers will spread positive word of mouth that can reinforce the good reputation of the service provider. Bootstrap is used to examine the mediation effects of satisfaction and the results show that customer satisfaction fully mediates the relationship between perceived interactional justice and word of mouth. The results also indicate that customer satisfaction partially mediate the following relationships; perceived distributive justice with word of mouth, perceived procedural justice with word of mouth and perceived interactional justice with perceive trust. However, the fact that this study is conducted by using cross sectional method, focuses on banking industry and covers a small area of the country should be taken into consideration for any generalization of results.References
Adams, J. S. (1963). Toward an Understanding of Inequity. Journal of Abnormal and Social Psychology, 67(5), 422-436.
Allsop, D. T., Bassett, B. R., & Hoskins, J. A. (2007). Word-of-mouth Research: Principles and Applications. Journal of Advertising Research, 398-410.
Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of personality and social psychology, 51(6), 1173.
Bitner, M. J., Booms, B. H., & Tetreault, M. S. (1990). The Service Encounter: Diagnosing Favorable and Unfavorable Incidents. Journal of Marketing, 54, 71-84.
Blodgett, J. G., Hill, D. J., & Tax, S. S. (1997). The effects of distributive, procedural, and interactional justice on postcomplaint behavior. Journal of Retailing, 73(2), 185-210.
Casado-Díaz, A. B., & Nicolau-Gonzálbeza, J. L. (2009). Explaining consumer complaining behaviour in double deviation scenarios: the banking services. The Service Industries Journal, 29(12), 1659-1668.
Chebat, J. C., & Slusarczyk, W. (2005). How Emotions Mediate the Effects of Perceived Justice on Loyalty in Service Recovery Situation: An Empirical Study. Journal of Business Research, 58(5), 664-673.
Chebat, J. C., & Slusarczyk, W. (2005). How emotions mediate the effects of perceived justice on loyalty in service recovery situations: an empirical study. Journal of Business Research, 58(5), 664-673.
DeVellis, R. F. (2003). Scale development: Theory and applications: Sage Publications, Inc.
DeWitt, T., Nguyen, D. T., & Marshall, R. (2008). Exploring Customer Loyalty Following Service Recovery The Mediating Effects of Trust and Emotions. Journal of Service Research, 10(3), 269-281.
Duffy, J. M., Miller, J. M., & Bexley, J. B. (2006). Banking Customers’ Varied Reactions to Service Recovery Strategies. International Journal of Bank Marketing, 24(2), 112-132.
Garbarino, E., & Slonim, R. (2003). Interrelationships and distinct effects of internal reference prices on perceived expensiveness and demand. Psychology & Marketing, 20(3), 227-248.
Gronroos, C. (1990). Relationship Marketing Approach to the Marketing Function in Service Contexts: The Marketing and Organizational Behavior Influence. Journal of Business Research, 20(1), 3-12.
Ha, J., & Jang, S. S. (2009). Perceived justice in service recovery and behavioral intentions: The role of relationship quality. International Journal of Hospitality Management, 28(3), 319-327.
Hair, J., Black, W., Babin, B., & Anderson, R. (2010). Multivariate data analysis: a global perspective: Pearson Education.
Hair, J. F. J., Wolfinbarger, M., Money, A. H., Samouel, P., & Page, M. J. (2011). Essentials of business research methods: ME Sharpe Inc.
Helms, J. E. (2007). Some better practices for measuring racial and ethnic identity constructs Journal of Counseling Psychology, 52, 235-246.
Ho, R. (2006). Handbook of univariate and multivariate data analysis and interpretation with SPSS: CRC Press.
Johnson, M. S., Sivadas, E., & Garbarino, E. (2008). Customer satisfaction, perceived risk and affective commitment: an investigation of directions of influence. Journal of Services Marketing, 22(5), 353-362.
Karatepe, O. M. (2006). Customer complaints and organizational responses: the effects of complainants’ perceptions of justice on satisfaction and loyalty. International Journal of Hospitality Management, 25(1), 69-90.
Kassim, N., & Abdullah, N. A. (2010). The effect of perceived service quality dimensions on customer satisfaction, trust, and loyalty in e-commerce settings: a cross cultural analysis. Asia Pacific Journal of Marketing and Logistics, 22(3), 351-371.
Kau, A.-K., & Loh, E. W.-Y. (2006). The effects of service recovery on consumer satisfaction: a comparison between complainants and non-complainants. Journal of Services Marketing, 20(2), 101-111.
Kim, T. T., Kim, W. G., & Kim, H.-B. (2009). The effects of perceived justice on recovery satisfaction, trust, word-of-mouth, and revisit intention in upscale hotels. Tourism Management, 30(1), 51-62.
Komunda, M., & Osarenkhoe, A. (2012). Remedy or Cure for Service Failure?: Effects of Service Recovery on Customer Satisfaction and Loyalty. Business Process Management Journal, 18(1), 82-103.
Krause, D. R., & Ellram, L. M. (1997). Critical Elements of Supplier Development: The Buying-firm Perspective. European Journal of Purchasing and Supply Management, 3(1), 21-31.
Kuo, Y.-F., & Wu, C.-M. (2011). Satisfaction and post-purchase intentions with service recovery of online shopping websites: Perspectives on perceived justice and emotions. International Journal of Information Management.
Lai, Y.-L., & Zhao, J. S. (2010). The impact of race/ethnicity, neighborhood context, and police/citizen interaction on residents' attitudes toward the police. Journal of Criminal Justice, 38(4), 685-692.
Lewis, B. R. (2012). 9 Customer care and service quality. Marketing Financial Services, 193.
Lii, Y. S., Pant, A., & Lee, M. (2012). Balancing the Scales: Recovering from Service Failures Depends on the Psychological Distance of Consumers. The Service Industries Journal, 32(11), 1775-1790.
Lin, T.-C., & Huang, C.-C. (2010). Withholding effort in knowledge contribution: The role of social exchange and social cognitive on project teams. Information & Management, 47(3), 188-196.
Lovelock, C., & Wirtz, J. (2011). Services Marketing: People, Technology, Strategy. New Jersey: Pearson Education, Inc.
Mattila, A. S. (2001). Emotional Bonding and Restaurant Loyalty. The Cornell Hotel and Restaurant Administration Quarterly, 42(6), 73-79.
Maxham, J. G., Netemeyer, R. G., & Lichtenstein, D. R. (2008). The retail value chain: linking employee perceptions to employee performance, customer evaluations, and store performance. Marketing Science, 27(2), 147-167.
Michel, S., & Meuter, M. L. (2008). The Service Recovery Paradox: True but Overrated? International Journal of Service Industry Management, 19(4), 441-457.
Morrisson, O., & Huppertz, J. W. (2010). External equity, loyalty program membership, and service recovery. Journal of Services Marketing, 24(3), 244-254.
Nunnally, J. C., & Nunnally (1970). Introduction to psychological measurement: McGraw-Hill.
Ok, C., Back, K., & Shanklin, C. W. (2005). Modeling Roles of Service Recovery Strategy: A Relationship-focused View. Journal of Hospitality and Tourism Research, 29(4), 484-507.
Prajogo, D. I., & McDermott, C. M. (2008). The relationships between operations strategies and operations activities in service context. International Journal of Service Industry Management, 19(4), 506-520.
Ringberg, T., Odekerken-Schröder, G., & Christensen, G. L. (2007). A cultural models approach to service recovery. Journal of Marketing, 71(3), 194-214.
Schoefer, K., & Ennew, C. (2005). The Impact of Perceived Justice on Consumers’ Emotional Responses to Service Complaint Experiences. Journal of Services Marketing, 19(5), 261-270.
Sekaran, U. (2006). Research methods for business: A skill building approach: Wiley-India.
Sheth, J. N., Sisodia, R. S., & Sharma, A. (2000). The Antecedents and Consequences of Customer-centric Marketing. Journal of the Academy of Marketing Science, 28(1), 55-66.
Sirdeshmukh, D., Singh, J., & Sabol, B. (2002). Consumer trust, value, and loyalty in relational exchanges. The Journal of Marketing, 15-37.
Smith, A. K., Bolton, R. N., & Wagner, J. (1999). A Model of Customer Satisfaction with Service Encounters Involving Failure and Recovery. Journal of Marketing Research, 36(3), 356-373.
Sousa, R., & Voss, C. A. (2009). The effects of service failures and recovery on customer loyalty in e-services: An empirical investigation. International Journal of Operations & Production Management, 29(8), 834-864.
Sparks, B., & Fredline, L. (2007). Providing an explanation for service failure: Context, content, and customer responses. Journal of Hospitality & Tourism Research, 31(2), 241-260.
Sparks, B. A., & McColl-Kennedy, J. R. (2001). Justice Strategy Options for Increased Customer Satisfaction in a Service Recovery Setting. Journal of Business Research, 54(3), 209-218.
Streiner, D. L. (2003). Starting at the beginning: an introduction to coefficient alpha and internal consistency. Journal of Personality Assessment, 80(1), 99-103.
Tax, S. S., Brown, S. W., & Chandrashekaran, M. (1998). Customer Evaluations of Service Complaint Experiences: Implication for Relationship Marketing. Journal of Marketing, 62(2), 60-76.
Wirtz, J., & McColl-Kennedy, J. R. (2010). Opportunistic customer claiming during service recovery. Journal of the Academy of Marketing Science, 38(5), 654-675.
Zeithaml, V. A., & Bitner, M. J. (2000). Services Marketing: Integrating Customer Focus across the Firms. New York: Mcgraw-Hill Companies.
Downloads
Published
How to Cite
Issue
Section
License
Under the Creative Commons Attribution-NonCommercial-NoDerivs license, the users are free to share (copy, distribute and transmit the contribution) with the condition to attribute the contribution in the manner specified by the author or licensor. They may not alter, transform, or build upon this work.
