relative importance of logistics and marketing customer service: A strategic perspective, The

Journal of Business Logistics, 1998 by Emerson, Carol J, Grimm, Curtis M

Customer service is an important topic to practitioners and researchers alike. Practitioners have long recognized that exceptional customer service reaps the benefits of customer satisfaction, loyalty, and increased sales. In addition, as interfunctional cooperation increases within the firm, customer service serves as the overarching goal of the organization and is often included as such in corporate mission statements. Customer service is complex, comprised of multifaceted elements such as order cycle time and overall product quality. The effect of each element on satisfaction is important information for managers, so that limited resources can be devoted to the most critical customer service elements.

Logistics researchers have also recognized customer service as an important topic. Previous research has focused primarily on service attributes, such as fill rate and order cycle time, while limited attention has been given to the conditions under which logistics or marketing customer service may be more important.' Innis and LaLonde found that both logistics and marketing customer service dimensions contribute to satisfaction2One gap that remains, however, is the investigation of the environmental conditions under which these two dimensions are relatively more important. One contribution of this paper is the inclusion of firm and environmental variables (for example, channel indirectness, customer size and power, rivalry, the product line growth rate, and supplier flexibility) to determine their effect on the customer's perception of the relative importance of logistics and marketing customer service. Survey responses from a large manufacturer's retail customers are used, enhanced by a rich array of customer comments regarding the findings.

The relevant customer service literature is reviewed in the next section, followed by a discussion of six environmental variables leading to the six hypotheses tested in the study. The research methods are then explained, including information about the sample and measurement of customer service and environmental variables. Finally, results are presented and discussed.

LITERATURE REVIEW AND HYPOTHESES

Logistics and Marketing Customer Service

Mentzer, Gomes, and Krapfel call for a "consistent, logical, theoretically meaningful definition" of logistics service that is "adequately specified and validated."' To that end they suggest a definition developed by Perreault: "the interrelated package of activities provided by a supplier that creates utility of time and place and insures form utility."4 Presently there is a debate in the literature concerning the number of logistics and marketing elements to be included in any study. Lambert and Harrington,5 Sterling,6 and others argue that more than a hundred specific elements are necessary for accurate measurement of customer service in a firm. Levy,7 Innis,8 and others have tried to verify a smaller number of dimensions using factor analysis. These studies focus on specific areas of logistics, such as inventory or materials handling. Mentzer suggests that "marketing has concentrated on measuring service quality that a distribution channel delivers to the customer. Logistics literature has concentrated more on the cost of delivered logistics service and its sales/profit implications."9 The Mentzer, Gomes, and Krapfel model sets out logistics and marketing customer service as independent constructs." This study builds on that model by using the same logistics variables-percentage of order filled, order cycle-time consistency, and accuracy of orders shipped-and adds order status information. Again following Mentzer, Gomes, and Krapfel, we include the marketing elements of terms of sale, competence of customer service representatives, overall product quality, and action on complaints. In addition, eight retailers from three eastern states, seven sales and customer service representatives, a district sales manager, and the vice-president of customer service for the manufacturer were queried to determine whether, in their view, the measures chosen are representative of customer service.

More specifically, the four logistics measures contribute to time, place, and/or form utility. Three of them, percentage of order filled, order cycle-time consistency, and accuracy of orders shipped, are associated with product flow and can be thought of as a source of competitive advantage." The fourth, order status information, gives the customer timely, accurate, information about the location of each order in the cycle. Together, these represent a general set of activities undertaken by a supplier to provide logistics service.

Marketing customer service can be defined as those services which ensure possession utility.12 Building on Mentzer, Gomes, and Krapfel, this study uses four measures of marketing services. The first, terms of sale, includes not only the price but also the length of time allowed for invoice payment as well as trade and advertising discounts. Competence of customer service representatives is a second measure. Here, product support from an in-house service person is captured, that is, the integrity and technical knowledge a customer can count on from a customer service representative. The third measure, overall product quality, includes the customer's perception of the value given for the price paid. A quality product meets the manufacturer's stated claims and has a low number of product defects. Finally, action on complaints measures the extent to which the company is perceived by the customer to recover from service failures. These four elements represent a general set of activities undertaken by a supplier to provide marketing service."