Effects of components of satisfaction on overall satisfaction in industrial markets

Journal of the Academy of Business and Economics, March, 2004 by Gregory M. Kellar, Michael W. Preis

ABSTRACT

High levels of customer satisfaction are important to marketers as both offensive and defensive tools and are capable of creating a lasting competitive advantage. The effects of four components of satisfaction, satisfaction with the product, interpersonal satisfaction, satisfaction with price, and satisfaction with vendor performance, on overall satisfaction among industrial buyers are investigated. Results show that the component of satisfaction experiencing the largest level of negative (positive) disconfirmation serves as a lower (upper) bound on the level of overall satisfaction reported by the respondent.

1. INTRODUCTION

Satisfied customers represent "an indispensable means of creating a sustainable advantage in the competitive environment of the 1990s" (Patterson, Johnson and Spreng, 1997). Highly satisfied customers spread positive word-of-mouth, demonstrate readier acceptance of other products in the product line, and exhibit brand loyalty or increased intentions to repurchase (Rogers, Peyton and Bed, 1992; Grewal and Sharma, 1991). Patterson, Johnson, and Spreng (1997) find a strong link between customer satisfaction and repurchase intention, with customer satisfaction explaining 78% of the variance in repurchase intention. Thus, the investigation of overall customer satisfaction has important managerial implications.

The purpose of this study is to examine some of the systematic consequences of customer satisfaction and dissatisfaction among industrial buyers. Industrial customers' judgments of components of satisfaction are modeled as influencing overall satisfaction. Empirical results test the relationships that are proposed.

2. LITERATURE REVIEW

Overall customer satisfaction is generally considered to be a multi-attribute model (Woodruff, Cadotte and Jenkins, 1983). Components of overall satisfaction (SAT_OVERALL) that have been examined include product satisfaction (e.g., Oliver 1993; Homburg and Rudolph 2001), interpersonal satisfaction (e.g., Lele and Sheth 1988; Manning and Reece 2001), satisfaction with the price of the offering (e.g., Anderson 1996), and satisfaction with vendor performance (e.g., Sheth 1973).

Researchers have sought greater understanding of the overall satisfaction construct in industrial markets by examining the phenomenon in different situations. In a study of consumer markets, Mittal, Ross, and Baldasare (1998) show a consumer can be simultaneously satisfied with one or more components of satisfaction related to a specific offering while being dissatisfied with other components of satisfaction for that same offering. Thus, while experiencing relatively high overall satisfaction, a customer might be extremely dissatisfied with one or more aspects of that offering.

Extensive research into the factors influencing customer satisfaction has been conducted in consumer markets (e.g., Spreng, et al. 1996; Swan and Oliver 1991; Oliver and Swan 1989; Churchill and Surprenant 1982), but relatively little such research has been conducted in industrial markets. In spite of this dearth of research, Patterson, Johnson, and Spreng (1997) find that industrial buyers, like consumers, consider multiple attributes when evaluating overall satisfaction. While industrial buyers weight their judgments differently than consumers, the disconfirmation paradigm is applicable in B2B markets (Patterson, Johnson and Spreng, 1997). In the expectancy-disconfirmation model of customer satisfaction, the most widely accepted and studied model (Patterson, Johnson and Spreng, 1997), customers compare their perceptions of performance (not objective actual performance) with their pre-purchase expectations to form judgments about the experience (Olshavsky and Spreng, 1989). When expectations are met, i.e., when perceived performance is close to expectations, little conscious thought is given to the process. However, when perceived performance is higher (lower) than the expected level of performance, expectations are said to be disconfirmed. When expectations are lower (higher) than perceived performance, satisfaction (dissatisfaction) is experienced.

3. PROPOSITIONS

Satisfaction with the product, interpersonal satisfaction, satisfaction with the price of the offering, and satisfaction with vendor performance are independent variables that have direct effects on overall satisfaction.

The multi-attribute nature of overall satisfaction suggests that consumers are using some combinatory function to reach overall satisfaction judgments based on evaluations of components of satisfaction (Woodruff, Cadotte and Jenkins, 1983; Crosby and Stephens, 1987; Homburg and Rudolph, 2001). The function may be a step-function (Woodruff, Cadotte and Jenkins, 1983), a multi-variable linear function (e.g., Preis and Kellar 2003; Kellar and Preis 2003), or a nonlinear function (e.g., Anderson and Mittal 2000). An underlying question in these findings is whether several negatively (positively) disconfirmed components of satisfaction could harm (advantage) the overall impression of the purchase to the point that an overall satisfaction rating could be lower (higher) than all components of satisfaction. This seems unlikely so the following propositions are written: