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CHAPTER TWO

LITERATURE REVIEW
2.0 Introduction
This chapter undertakes the theoretical framework and a review of some literature pertaining
to the topic under study to help make a fair and informed assessment of the current situation.
The available literatures have been segmented under the following broad themes for
convenience of analysis: Overview of perception, Factors affecting customer perception,
theory of perception and self-concept, Concept of customer satisfaction, features of odafone
call service, customer purchasing process, service !uality and "service and service#.
2.1 Overview of Perception
The definition of perception according to $%hurup, &., &afini, C., ' &athaba, (. )., *+,-.
is the process in which a person select, arrange and interpret stimuli, these stimuli are filtered
and ad/usted to become one#s own view of the world. 0ven though e1posed to the same thing,
in the same environment, two persons will never e1perience the same. 2e live in a world
today where we daily are e1posed to millions of different stimuli3 different smells, sounds,
tastes, sights and te1tures.$ %hurup et al., *+,-. Our brain takes in and processes only a small
number of all these stimuli. $4olomon, 5amossy, 6skegaard and 7ogg, *++8..
The whole perception process is made up by three stages, the e1posure stage, the attention
stage and the interpretation stage. The brain takes in the stimuli in the attention stage and
interprets the stimuli, according to our previous e1periences and desires, in the interpretation
stage. 9ltimately, these three stages form our perceptions. $4olomon et al, *++8..
:t is only when the customers# perceptions of the business, the products and the services are
known, that you truly know whether or not the business is going in the right direction.
$%hurup et al., *+,-. 6ll interactions that occur between the customers and the business will
ultimately affect the customers# view and image of the business.
2.2 !ctor" Affectin# Con"u$er Perception
Consumer perception is affected by several factors which are3 perceived price, perceived
!uality, country of origin or country of manufacture and perceived risk.
5elow is a critical look at each of the above factors. ;erceived ;rice is how a consumer
perceives a price as high, as low, as fair has a strong influence on both purchase intentions
and purchase satisfaction. 6ccording to 6ssael $*++<., consumers# price perceptions may
appear to be a simple matter of determining a product price based on an advertisement or on
observation in a retail store. 7owever, it is not that simple because consumers have certain
e1pectations about what prices are or should be based on reference prices. Consumer#s
reference points include past prices, competitors# prices and the cost of goods sold.
6ccording to =eithaml $,>??. perceived !uality is @the consumer#s /udgment about a
product#s overall e1cellence or superiority.A :t is worth noting that ;erceived !uality is
different from ob/ective or actual !uality, is a higher level of abstraction rather than a specific
attribute of a product, a global assessment that in some cases resembles attitude, and a
/udgment usually made within a consumer#s evoked set. :n the same vein 6aker $,>>,. state
that perceived !uality is the customer#s perception of the overall !uality or superiority of the
product or service with respect to its intended purpose, relative to the alternatives. :n fact, the
perceived !uality is different from actual or ob/ective !uality, product-based !uality, and
manufacturing !uality. :t can be viewed as the difference between overall !uality and
undetected !uality.
Consumers in the telecommunication industry are sometimes particularly interested in the
services associated with the country of origin $;arasuraman and ;isharodi, ,>><..This image
has been defined as @the overall perception consumers form of products from a particular
country, based on their prior perceptions of the country#s production and marketing strengths
and weaknessesA $(oth and (omeo, ,>>*.. 4ince 4cholar#s $,>8B. seminal study, many
studies have acknowledged that consumers have significantly different perceptions about
products and services made in different countries, and that these general perceptions have
important effects on consumers# evaluation of the products manufactured in a particular
country.
4tudies in the country of origin literature have identified different processes that e1plain how
country of origin influences product evaluations. One process falls within the framework of
the Fishbein model $Fishbein and 6/Cen, ,>DB.. That is, beliefs about a product#s attributes
precede and influence the formation of attitude towards the product. 6ccording to this view,
when consumers engage in product evaluation, they base their evaluation on various
descriptive, inferential or informational cues. 4uch cues can be intrinsic $such as colour,
design, specifications, etc.. or e1trinsic $such as price.. (esearch has shown that intangible,
e1trinsic cues are often used by consumers as surrogate indicators when there are missing
andEor difficult intrinsic cues.
For e1ample, price may be used to evaluate the !uality of a product when other information is
lacking $Ferstner, ,>?B3 Olson and Gacoby, ,>D*.. Other e1trinsic cues include those that are
controlled by the firm, such as guarantees, warranties, brand reputation $Gacoby et al., ,>DD.,
seller reputation $4hapiro, ,>?*., promotional messages $Hlein and )effler, ,>?,., and those
that are controlled by third parties, such as product rating services and government standard-
setting agencies $Corell, ,>??.. Country of origin can serve as a controllable e1trinsic cue in
the sense that sourcing and location decisions are made by the firm. :n contrast to the
multiattribute model conceptualiCation of the effect of country of origin on consumer
evaluation, a second school of thought has focused on a @haloA effect model which suggests a
reciprocal linkage from affect $evaluations. to beliefs $5eckwith and )ehmann, ,>DB3 7an,
,>?>3 =a/onc, ,>?+.. 6ccording to this model, beliefs about a product can be influenced by
overall evaluations. 4uch a conceptualiCation has been applied in the study of country of
origin as an image variable, which is defined as some aspect of the product which is distinct
from its physical characteristics, but which is nevertheless identified with the product
$0rickson et al., ,>?<3 Gohansson et al., ,>?B3 Iarayana, ,>?,.. Country of origin is found to
influence belief formation rather than attitude $evaluation. in some studies, although the
effects of country of origin are not identical across all product attributes $0rickson et al.,
,>?<..
Gohansson et al. $,>?B., in particular, noted the e1istence of a persistent @haloA effect in
ratings on specific product attributes. (egardless of the direction of the influence of country
of origin, empirical evidence suggests that country of origin perceptions may result from
stereotyping $i.e. a positive relationship between country image and levels of economic.
2.% THEORITICAL RA&EWOR'
2.%.1 T(eor) of Perception *) +r!(!$ R. Litt,e -1.../
The basis of perception, the fundamental !uestions can be put as follows: how does an
e1ternal reality influence the perception of the human species, what are the steps in that
influence and how can the influence be conceptualiCed. (Fraham, ,>>>. The other senses can
be discussed in a similar manner. Therefore with the operation of our senses we do know
there is something there that can and is influencing the sensory mechanisms within ourselves,
but we do not necessarily know what it is that is causing the sense e1perience. $Fraham,
,>>>. &odern virtual reality is testimony to the e1tent that our senses can be manipulated. :t
can be reasonably postulated that hearing, vision, smell etc., each involve different neurones.
6nd that these perceptual systems can be active without involvement of any psychological
factors. :t is very difficult for people to engage in Jinterpreted perception#. $Fraham, ,>>>.
Fraham $,>>>. further stated that "it is possible for people to stop seeing a book as a book
and to see it as lines, rectangle, parallelogram, etc#.
6s a result, two levels of perception shall be studied. The first is what : will call immediate
perception, and is totally physical, the operation of the physical universe following its
mechanistic pathways, some of which happen to occur as neural events in our brains. The
second level of perception is the interpretative level where our psychology and attention is
implicated in the perceptual act. :mmediate perception is direct, mediated only by the
physiology of the perceiving species. $Fraham, ,>>>. &oving beyond immediate perception,
such as when a person attends to what they perceive, then all the well-known aspects come to
the fore $such as seeing an O when it is not fully closed, or not seeing a word repeated in a
sentence.. $Fraham, ,>>>. 6 problem is the terminology, for now we have Jimmediate
perceptionJ, strictly physiologically driven, and the more normal JperceptionJ, involving the
psychological factors. The term JperceptionJ to refer to the complete act of JperceivingJ, and
involving the psychological factors. 2here : need to refer to the more restrictive
physiological reacting part only, then : shall use the term Jimmediate perceptionJ. The obvious
conse!uence is that we do not necessarily perceive that which we immediately perceive K
with no contradiction in terms. $Fraham, ,>>>..
Consumer ;erception Theory $C;T. illustrates and e1plains one method through which
advertising is effective. There are two basic concepts that need to be accepted in order for
C;T to be understood: cultural filtration and perceptual reality. Cultural filtration is simply
the reason that people perceive day to day life differently from one another. ((akesh, *+,*.
6n easy way of understanding cultural filtration is by comparing the cultural filter to a pair of
sunglasses. 2hen we wear tinted glasses, we view the world as being the colour of the lens,
the same applies with our cultural filters. 2e gather our e1periences on a wide variety of
topics $politics, education, e1perience, vocabulary, travel, geographic location, cultural
knowledge, tradition, family, heritage, race, ethnicity, se1uality, habits, etc. and form our
own uni!ue cultural filter. :t is through this uni!ue filter that we e1perience everything,
including advertising. :n the model above the pink tinted rectangle represents the cultural
filter.
2ith cultural filtration in place, we can proceed through the steps of the model which define
the theory. The process of C;T starts with the consumer: an individual toward which the
message is directed. $(akesh, *+,*. The consumer must first have a perceived need or want,
and then actively e1perience an advertisement in the product category where the need or want
e1ists. :t is a catalyst for the model if this advertisement occurs at strategic timing in the
process. 6fter e1posure, the consumer forms an opinion about the product. This perception
becomes the reality of that product to the consumer. :t is possible that this truth could change
with e1posure to competitive messages from a wide variety of sources $other media, friends,
advice columns etc.. :f, however, the product is perceived, and therefore assigned the truth,
of being positive it is then evaluated as to whether or not it fills the need or want. :f it does
indeed fit the need, it is likely that the consumer will proceed to the purchase stage of the
model. :n the purchase stage the consumer decides to purchase or not to purchase the product.
6gain, there are a number of variables surrounding this decision, as surround each step and
decision in the model. )oudon and %ella 5itta $,>>-. note that attitude is how for or against,
positively or negatively, favourably or unfavourably a person regards a particular ob/ect.
This definition aims to reveal the idea that attitude contains consumer feelings and
evaluations, related with a particular ob/ect. 4olomon, 5amossy and 6skegaard $*++*.
support the idea of the authors mentioned above and state that attitude is a long-lasting and
common assessment of people, including oneself, ob/ects, advertisement and a particular
problem. 4chiff man and Hanuk $*++<. define attitude within the conte1t of consumer
behaviour as a constant tendency to behave accordingly in a concrete situation, regarding a
certain ob/ect or a group of ob/ects.
4ocial psychologists 4ecord and 5ackman $;eter, ,>><. populariCed a detailed version of
attitude interpretation, claiming that attitude is a particular system of motivation, emotions,
perception and cognitional processes, responding to certain environmental aspects,
surrounding an individual. This means that attitude is composed of three components:
,. ;erception or knowledge.
*. Feelings or emotions.
-. 2ill or behaviour tendencies.
The studies of attitude conception disclose the idea that attitudes are related with persons,
ob/ects or behaviour that constitutes a part of the individual#s world perceived. 4ummariCing
opinions of various authors and indicating the most essential features of attitude, it is possible
to state that the most precise definition of attitude determines it as a permanent and achieved
$perceived. intention to respond favourably or unfavourably to a certain ob/ect or a group of
ob/ects.
2.%.2 T(e "e,f0concept
:t has long been recogniCed that there e1ists a psychological factor within the mind of
consumers during the purchasing process known as the self-concept, or the ways in which
consumers see themselves $Hhare ' &eenakshi, *++>.. One could therefore argue that this is
a significant concept for telecommunication industry to consider due to its impact on
consumers individually.
Frubb and Frathwohl, $,>8D. introduce self-image as an interrelated concept while stating
that @self-image refers to the perception one has about himself or herself and provides us with
self-esteem and how we as individuals feels about ourselvesA. 2ithin the definition the
theorists include perception as a part of the self-concept to hint that the self-concept is yet
another part of how individuals view themselves, as mentioned above. From this it is evident
that there is emphasis on the psychological perspective of consumers on a rather
individualistic level that brands should pay more focus to. Focus is set upon this concept to
give telecommunication industry an idea of the factors that influence consumers to purchase a
particular service.
4ince the thesis centers on customer perception which advises customers to know more about
their telecommunication network, the self-concept can be used as a tool to indicate why
consumers act the way they do. One may argue there are different versions of the self-concept
such as the self-perception theory which attempts to e1plain how individuals develop and
understanding motivations behind their own behaviour. 4elf-perception by customers relates
to values and motivations that drive buying behavior which is also an important aspect of
consumer perception theory. (6dani, F., *+,-. 2hile using the concept telecommunication
industry can look into the minds of their target market to discover motivational factors which
can lead to specific purchase behavior $5lank, *+,-.. 7owever the self-concept does not only
consist of one dimension, instead it is considered to be a multidimensional concept.
Throughout research 4irgy $,>?*. along with several other theoreticians argue there
are several versions of the self that should also be considered. The self is not found within
one specific conte1t, but varies from conte1t to conte1t and is important to follow in order to
see how consumers self-changes in specific situations, which potentially could reveal
consumer tendencies useful for better aiming at the target markets. $6dani, F., *+,-.
:ndividuals are all different indicating that @different personality traits can be accessed
differently in different social situations $6aker, ,>>,.. 4ome researchers argue self-concept is
a single construct, whereas others may see it as consisting of multiple constructs. The self-
concept can be divided into two aspects: the actual and ideal self. Throughout research 4irgy
et al. $,>>D. has discovered four different self-concepts:
$,. Actual self $@defined as how people see themselvesA..
$*. Ideal self $@defined as how people would like to see themselvesA..
$-. Actual-social self $@defined as how people believe they are seen by significant othersA..
$<. Ideal-social self $@defined as how people would like to be seen by significant othersA..
From this one could argue that people will consume products based on how they are
viewed wither by themselves or society in order to improve the self-concept and gain
acceptance in society. 5y looking at this, the telecommunication industry could potentially
unlock psychological patterns that have an effect on individual consumers, whether it may be
for personal or social reason. $6dani, F., *+,-.
Consumers live in a social conte1t in which their identity is altered based on the situation of
their presence. For e1ample, consumers within the 9.4 market that have a tendency to
purchase Iike products may be influenced by other individuals that value sports and may
alter their self-concept in order to be seen as part of this subculture by purchasing from Iike.
:t can be argued that Iike has a broad consumer market, consisting of one mutual interest,
whether they are athletes or /ust want to be seen as athletic. (egardless, the brand has variety
in their products which can appeal to various consumer to satisfy their self-concept. $6dani,
F., *+,-. On the contrary, some researches remain critical when it comes to using the self-
concept. 5lascovich and Tomaka $,>>,. e1amined numerous measures of the self-concept
which led them to conclude that there is no such thing as a perfect measure, hinting there
should be revisions within the particular field.
5rown et al.$*++,. support this statement by arguing that although the self-concept is
one of psychology#s most popular constructs, the concept @has become a protean concept-so
capable of changing form that its value is in risk of being undermined @ $5rown, %utton '
Cook, *++,, p. 8,B..
From this one can draw two conclusions about the self-concept. Firstly, as other branding
tools it should be taken for granted and used as a general tool to classify the target market as
the concept is constantly changing due to change in the consumer trends having an impact of
the self-concept. 4econdly, telecommunication industry need to consider that although the
concept has its limitations, it can be of great help when keeping up with changes in the
environment and trends to predict behavior of their target market. :n order for
telecommunication to create or improve their service, they must spend the time and resources
getting to know consumers within their target market. This will create products suitable for
satisfying the self-concept, while serving as a connecting ob/ect which links the
telecommunication industry with their consumers to overall have a greater bond.
2.1 Concept of Cu"to$er 2!ti"f!ction
5erkman ' Filson $,>?8. stated that customer satisfaction is recogniCed as being of great
importance to all commercial organiCations and the telecommunication industry is no
e1ception because of its influence on repeat purchase behaviour and word-of-mouth
recommendations. :n general terms3 customer satisfaction is seen as the essential determinant
of business success $&oore et al., ,>>?.. On the other hand, as competition has increased,
customer satisfaction has been identified as a determinant of market share, return on
investment and cost reduction $5urch et al., ,>>B..
Iauman $,>>B. referred to several studies that had found that it costs about five times as
much in time, money and resources, to attract a new customer as it do to retain an e1isting
customer. This creates the challenge of maintaining high levels of service, awareness of
customer e1pectations and improvement in services and products. 4atisfaction reinforces
positive attitudes toward the productEservice, leading to a greater likelihood that the same
productEservice will be purchased again and that dissatisfaction leads to negative
productEservice attitudes and lessens the likelihood of using the same productEservice again
$6ssael, ,>?D..
2.1.2 Cu"to$er !ttitude tow!rd" "!ti"f!ction derived fro$ ! "ervice
7ence, =eithaml and 5itner, $,>>8. define service !uality as the way in which the whole
service e1perience is performed. Their model of customer perceptions of !uality and
customer satisfaction hypothesiCed that satisfaction is more of an attitude and this attitude
would influence perceptions of service !uality, which in turn would influence purchase
intentions $service !uality leads to satisfaction and eventually purchase intentions. Failure to
provide reliable service may result in customer dissatisfaction and possible defection. This is
based on the premise that a satisfied customer will continue to maintain a relationship
$7allowell, ,>>8. and that relationship will lead to loyalty and longevity. =eithaml, et al.,
$,>>+. arrived at the same idea by looking at the probable behaviour of the dissatisfied
customer. They maintain that a dissatisfied customer is likely to switch to a competitor and
may inform others of the bad e1perience.
2.1.% &!#nitude of 2!ti"f!ction
6ccording to Hotler ' Heller $*++8., customer satisfaction does not only prevent customer
complaints but more importantly it is meeting and even e1ceeding customers e1pectations
The point is that @no complaints or @dissatisfaction is not synonymous with @customer
satisfactionA. This view has its roots in motivation theory of 7erCberg $,>8?.. The mere fact
that things do not go wrong and customers do not complain does not mean that they are
satisfied with the product or service received. Conversely, customers can be dissatisfied with
some things about an organiCation, but satisfied with the organiCation#s product or service
offerings 4atisfaction is therefore holisticEtotal $Hotler ' Heller *++8. and can be in different
magnitudes since customers can be e1tremelyEvery highly satisfied or delighted to /ust
satisfied, and e1tremely dissatisfied to dissatisfied. :n this study satisfaction is defined in both
negative and positive magnitudes, from very satisfied to very dissatisfied.
2.1.1 Cu"to$er 2!ti"f!ction in &o*i,e Te,eco$ Co$p!nie" in +(!n!
The state of customer satisfaction with service delivery is not clear as there is scanty
documentation of the issue. 6ccording to a discussion paper on telecom developments and
investments in Fhana $Frempong ' 7enten, *++<., the authors noted that @the goals set by
government have only partly been met K especially with respect to the development in rural
areas K and the !uality of service is still low and has even deteriorated on some indicators.
There is, therefore, a widespread dissatisfaction with the general telecom development in
Fhana among users as well as policy decision makers and administrators.A
7owever, the industry has witnessed tremendous developments in the last decade as a result
of the substantial growth in investment that has generated incredible increase in subscriber
growth rate for all the mobile telecom operators in the industry by %ecember *++D.
$Humasey, 6. 4., *+,<. .This seems a success story, and there are high hopes that the service
!uality delivered by the odafone Fhana meets customer e1pectations, ideal service, or
satisfaction.
2.3 e!ture" of Vod!fone c!,, "ervice
Conference C!,,
6 conference call is a telephone call in which the calling party wishes to have more than one
called party listen in to the audio portion of the call. $Conference call, n.d... The conference
calls may be designed to allow the called party to participate during the call, or the call may
be set up so that the called party merely listens into the call and cannot speak. :t is sometimes
called 6TC $6udio Tele-Conference.. $Conference call, n.d...Conference calls can be
designed so that the calling party calls the other participants and adds them to the call3
however, participants are usually able to call into the conference call themselves by dialling a
telephone number that connects to a Lconference bridgeL $a specialiCed type of e!uipment
that links telephone lines.. Companies commonly use a specialiCed service provider who
maintains the conference bridge, or who provides the phone numbers and ;:I codes that
participants dial to access the meeting or conference call. The more limited Three-way calling
is available $usually at an e1tra charge. on home or office phone lines. For a three-way call,
the first called party is dialled. $Conference call, n.d... Then the 7ook flash button $or recall
button. is pressed and the other called partyJs phone number is dialled. 2hile it is ringing,
flash E recall is pressed again to connect the three people together. This option allows callers
to add a second outgoing call to an already connected call.
Voice$!i,
oicemail $also known as voice mail, voice-mail, voice message or voice bank. is a computer
based system that allows users and subscribers to e1change personal voice messages3 to
select and deliver voice information3 and to process transactions relating to individuals,
organiCations, products and services, using an ordinary telephone. $oicemail, n.d... The
term is also used more broadly to denote any system of conveying a stored
telecommunications voice messages, including using an answering machine. $oicemail,
n.d... &ost cell phone services offer voice-mail as a basic feature, many corporate ;5Ms
include versatile internal voice-messaging services and N>? ertical service code subscription
is available to most individual and small business land line subscribers.
C!,, 4ivert
Call forwarding, or call diversion, is a telephony feature of some telephone switching systems
which redirects a telephone call to another destination, which may be, for e1ample, a mobile
telephone, voicemail bo1 or another telephone number where the desired called party is
available. $5onanno, ,>8-.. Call forwarding was invented by 0rnest G. 5onanno. .:n Iorth
6merica, the forwarded line usually rings once to remind the customer using call forwarding
that the call is being redirected. $5onanno, ,>8-. &ore consistently, the forwarded line
indicates its condition by stutter dial tone. Call forwarding typically can redirect incoming
calls to any other domestic telephone number, but the owner of the forwarded line must pay
any toll charges for forwarded calls. Call forwarding is often enabled by dialing ND* followed
by the telephone number to which calls should be forwarded. $5onanno, ,>8-. Once
someone answers, call forwarding is in effect. :f no one answers or the line is busy, the
dialing se!uence must be repeated to effect call forwarding. Call forwarding is disabled by
dialing ND-. This feature re!uires a subscription from the telephone company. $5onanno,
,>8-. 6lso available in some areas is (emote 6ccess to call forwarding, which permit the
control over call forwarding from telephones other than the subscriberJs telephone.
2.5 2ervice 6u!,it)
:n measuring customer satisfaction with service !uality, it is significant to e1amine the
service !uality concept, its importance and the dimensions it has. 4ervice !uality has been a
difficult-to-define concept that has aroused considerable interest and debate in the research
literature. This is because the meaning of !uality can be referred to in many attributes such as
the e1perience of the service encounters, or @moments of truthA, the evidence of service3
image3 price, and so on. These form the customer#s overall perceptions of !uality, satisfaction
and value $=eithaml and 5itner, ,>>8.. There are a number of different LdefinitionsL as to
what is meant by service !uality. 4ince service !uality is basically defined from customer
perspective and not the manufacturers, it is usually referred to as customer perceived !uality.
The concept of consumer-perceived !uality $C;O. was first defined by Fronroos in ,>?* as
the confirmation $or disconfirmation. of a consumer#s e1pectations of service compared with
the customer#s perception of the service actually received.
One definition that is commonly used defines service !uality as the e1tent to which a service
meets customers needs or e1pectations $6subonteng et al., ,>>8.. ;arasuraman, =eithaml
and 5erry $,>??. support the same view, defining the concept of service !uality as a form of
attitude, related, but not e!uivalent to satisfaction, that results from a comparison of
e1pectations with perceptions of performance. 01pectations are viewed as desires or wants of
customers, i.e. what they feel a service provider rather than offer $;arasuraman et al., ,>??..
6lthough service !uality has been perceived for a long time to be an outcome of customer
cognitive assessment, recent studies confirm that service !uality involves not only an
outcome but emotions of customers. :t is argued that @during the consumption e1perience,
various types of emotions can be elicited, and these customer emotions convey important
information on how the customer will ultimately assess the service encounter and
subse!uently, the overall relationship !ualityA $2ong *++<, p. -8>.. 0dvardsson $*++B.
maintains that customer perception of service !uality is beyond cognitive assessment as it is
formed during the production, delivery and consumption of services and not /ust at the
consumption stage. This is made possible as customers play their role as co-producers by
carrying out activities as well as being part of interactions influencing both process !uality
and outcome !uality.
6gain on the role of service !uality 5erry et al. $*++*. emphasiCes that managing the total
customer e1perience. Therefore an emotional reaction is part of a !uality and favourable
e1perience $Cronin, *++-.. This is consistent with the findings of &ano and Oliver $,>>-. on
utilitarian and hedonic consumption /udgments, who argue that @...satisfaction is naturally
tied to cognitive /udgments and to affective reactions elicited in consumptionA $&ano and
Oliver, ,>>-.. 2ong $*++<. found that negative emotions have a stronger effect on
satisfaction with !uality than positive emotions.
The concept of service !uality from the customer perspective, thus perceived service !uality,
is not a mistake simply because in the words of the guru @the consumer, of course, perceives
what he or she receives as the outcome of the process in which the resources are used, i.e. the
technical or outcome !uality of the process. 5ut he or she also, and often more importantly,
perceives how the process itself functions, i.e., the functional or process !uality dimension.
Thus, the technical !uality and functional !uality dimensions of perceived service !uality
emerge.A $Fronroos, C., *++,..
2.5.2 2i#nific!nce !nd 4river" of 2ervice 6u!,it)
%elivering e1cellent service !uality is widely recogniCed as a critical business re!uirement
$oss et al., *++<a3 ilares and Coehlo, *++-.. :t is @not /ust a corporate offering, but a
competitive weaponA $(osen et al., *++-. which is @essential to corporate profitability and
survivalA $Iewman and Cowling, ,>>8.. &any authors agree that in today#s dynamic market
place and market space, organiCation no longer compete only on cost but more importantly
on serviceEproduct !uality :n a competitive marketplace where businesses compete for
customers, delivering !uality service is seen as a key differentiator and has increasingly
become a key element of business strategy $7eskett, G.)., et al., ,>>D3 Hotler *++8..
On the drivers of service !uality, the most widely used model is the 4ervice-;rofit Chain
$4;C., first proposed by 7eskett et al., $,>><.. :t provides one of the most powerful and
widely supported perspectives on this issue. Overall, the 4;C sees organiCational internal
features as driver of employee satisfaction, which drives service !uality which is also
identified as an antecedent of customer satisfaction which in turn drives customer loyalty and
retention that eventually leads to profitability and growth.
2.7 Cu"to$er Purc(!"in# Proce""
(esearchers suggest that customers go through a five-stage decision-making process in most
purchase situations, namely: Ieed recognition ' problem awareness, :nformation search,
0valuation of alternatives, ;urchase and ;ost-purchase evaluation $Hotler ' Heller *++83
)ovelock and 2irtC, *++D.. )ovelock and 2irtC $*++D. propose a three-stage model of
service consumption. :n this model they conveniently grouped the decision making process of
service consumption into three: ;re-purchase service, encounter stage and post-enter stage.
They further e1plained them as follows:
Pre0purc(!"e8 This stage has three main components. :t includes the awareness of
need, information search in which needs are clarified, solutions e1plored and suppliers and
alternative service products are identified by consumers, and finally an evaluation of
alternative solutions and suppliers for a decision on service purchase. This stage is affected
by the consumer#s search for certain service attributes, and the perceived risk and e1pectation
of consumer regarding desired service, predicted service, ade!uate service levels as well as
the tolerance Cone.
2ervice0encounter8 This stage involves a re!uest from chosen supplier or initiate
self-service of which payment may be upfront or billed latter. :t also includes service delivery
by personnel or self-service. :t is the moment of truth as the service is encountered through a
service delivery system of an organisation.
Po"t0encounter: This stage involves an evaluation of the performance of the service
encountered and its effect on future intentions. :t is this stage that satisfaction and
dissatisfaction occur and decisions to remain loyal are taken by customers.
:n the mobile telecom market, immediately a customer buys a 4:& card and activates it,
heEshe becomes a subscriber to the network and a customer to the network operator. The
customer#s decision to purchase and the decision making process are very significant to
consider since they imply trade-offs in cost and benefits $value. and have significant effect on
customer satisfaction, re-purchase, likelihood to recommend and switching intentions. This
value e1change process continues as customers continually receive or consume services from
the mobile network and even take part in the services production and delivery process. :n the
process, customers# decision to remain loyal to the organisation or switch altogether to other
networks takes place depending on several factors prominent among them is their satisfaction
level of the services !uality delivered to them.
2.9 2ervice !nd 2ervice"
0dvardsson et al., $*++B. found out that scholars use the term "services# variously to refer to
""performance, deeds, and process, activities, e1periences and value to customers.## $4olomon
et al., ,>?B3 )ovelock, ,>>,3 =eithaml and 5itner, *++-3 argo and )usch, *++<.. They
identified that scholars# definitions of services and service have different meanings in that,
""PserviceQ involves the whole organiCation#s performance in providing the customer with a
good e1perience, while PservicesQ implies that services are something that can be offered to
the customer.## Thus, on one hand "services# definitions are outcome-related or directed at the
value-created since it is something of value delivered to or a performance to meet customer#s
needs. :n a typical mobile telecom company, "services# may include specific services like:
replacement of lost 4:& cards, providing &&4, 4&4, free call services to customers, etc.
These "services# definitions are supported in the work of )ovelock $,>>,, ,>>*.3 Fronroos
$,>>+..
On the other hand, "service# definitions are process-related or value creation process in that
"service# is perceived as a set of activities performed by an organisation that aim at creating
value, which includes specific services or economic activities, acts or performance to
customers as well as other organisational activities that are part of the value creation process
such as leadership and management styles, structure of operations, customer relationship
initiatives, etc and not services as market offerings only. This "service# perspective implies
that service involves the whole process of interacting with and involving customers before,
during and after production, distribution and consumption of an organisation#s offering. This
view is supported in the work of 0dvardsson et al., $*++B.3 Hauppinen-(aisanen 7. et al.,
$*++D..
0dvardsson et al., $*++B. in their critical review of definitions of service and services
concluded that ""services are as different from each other and from products as products are
different from each other, and that "":t has to be determined at a specific time, in a specific
company, for a specific service, from a specific perspective.A
2.9.2 2ervice" c,!""ific!tion"
5ased on the benefit without ownership perspective, )ovelock and 2irtC, $*++D. identify five
broad categories within the non-ownership framework:
Rented #ood" "ervice"8 These services enable customers to obtain temporary right to
e1clusive use of a physical good that they prefer not to own. 01amples include boats, power
tools, combine harvesters, wedding gowns, etc.
4efined "p!ce !nd p,!ce rent!,": 7ere customers obtain use of a defined portion of
larger space in a building, vehicle, or other area, sharing its use with other customers under
varying levels of privacy
L!*our !nd e:perti"e rent!,"8 Customers hire other people to perform work that
they either choose not to do for themselves or are unable to do because of lack of the
necessary e1pertise, tools, or skills.
Acce"" to "(!red p()"ic!, environ$ent"8 These environments may be located
indoors or outdoors or a combination of both. 01amples include museums, theme parks, trade
shows, gyms, Coos, ski resorts, golf courses, and toll roads.
2)"te$ !nd networ;"8 !cce"" !nd u"!#e8 7ere customers rent the right to participate
in a specified network such as telecommunications, utilities, banking, insurance, or specialise
information services. :n this study, the focus is on telecommunication network services which
fall in the system and networks services group proposed in )ovelock and 2irtC#s
classification $)ovelock and 2irtC, *++D..
Core "ervice" !nd 2upp,e$ent!r) 2ervice": )ovelock and 2irtC $*++D. further
describe a firm#s markets offering as being divided into core service products and
supplementary service elements such as customer services. This has been variously described
as au1iliary services by Fronroos $,>>+., peripheral by Iormann $,>>,. and supplementary
services by )ovelock $,>>*.. They draw a distinction between marketing of services - in
which a service itself is a core product - and marketing through services i.e. supplementary or
customer services which may include logistics services, advice, installation, and upgrades.
""The core service is the basic reason for a firm to be in the market. :t represents the firm#s
basic competency in creating value with and for the client. :t represents a comple1 set of
benefits which may be difficult to analyse because some are physical, some are psychological
and others are emotional## $Iormann, ,>>, p. <8 cited in (onald Games Ferguson, et al.,
,>>>.. :t relates to the primary benefits that the customer receives from the service.
6dditionally, FrRnroos $,>>+, p.DB cited in (onald Games Ferguson, et al., ,>>>. subdivides
supplementary or peripheral services into enabling $facilitating. and enhancing $supporting.
services. Facilitating services $and goods. are those which are necessary for the core service
to take place. 4upporting services $and goods. do not facilitate the delivery of the core service
but create added value for the client.
4everal scholars $4torey and 0asingwood ,>>?3 FrRnroos *++D3 Hauppinen-(aisanen 7. et
al., *++D. also postulate that there is the augmented service offering which consists of various
features, such as the accessibility of the service that is made possible through such things as
skilled employees, suitable office hours etc, the !uality of customerJs interaction with the
organisation and its workers, and customer#s involvement in the service or value creation
service process.
These distinctions are important because this thesis considers service delivery of mobile
networks as "services# comprising core, supplementary, and augmented services.
2.9.1 2ervice 6u!,it)
:n measuring customer satisfaction with service !uality, it is significant to e1amine the
service !uality concept, its importance and the dimensions it has. 4ervice !uality has been a
difficult-to-define concept that has aroused considerable interest and debate in the research
literature. This is because the meaning of !uality can be referred to in many attributes such as
the e1perience of the service encounters, or @moments of truthA, the evidence of service3
image3 price, and so on. These form the customer#s overall perceptions of !uality, satisfaction
and value $=eithaml and 5itner, ,>>8..There are a number of different LdefinitionsL as to
what is meant by service !uality. 4ince service !uality is basically defined from customer
perspective and not the manufacturers, it is usually referred to as customer perceived !uality.
The concept of consumer-perceived !uality $C;O. was first defined by Fronroos in ,>?* as
the confirmation $or disconfirmation. of a consumer#s e1pectations of service compared with
the customer#s perception of the service actually received. One definition that is commonly
used defines service !uality as the e1tent to which a service meets customers# needs or
e1pectations $6subonteng et al., ,>>8..
;arasuraman, =eithaml and 5erry $,>??. support the same view, defining the concept of
service !uality as Sa form of attitude, related, but not e!uivalent to satisfaction, that results
from a comparison of e1pectations with perceptions of performance. 01pectations are viewed
as desires or wants of customers, i.e. what they feel a service provider should offer rather
than would offer.S $;arasuraman et al., ,>??..
Though service !uality has been perceived for a long time to be an outcome of customer
cognitive assessment, recent studies confirm that service !uality involves not only an
outcome but emotions of customers. :t is argued that @during the consumption e1perience,
various types of emotions can be elicited, and these customer emotions convey important
information on how the customer will ultimately assess the service encounter and
subse!uently, the overall relationship !ualityA $2ong *++<.. 0dvardsson $*++B. maintains
that customer perception of service !uality is beyond cognitive assessment as it is formed
during the production, delivery and consumption of services and not /ust at the consumption
stage. This is made possible as customers play their role as co-producers by carrying out
activities as well as being part of interactions influencing both process !uality and outcome
!uality.
6gain on the role of service !uality 5erry et al. $*++*. emphasiCe @managing the total
customer e1perienceA. Therefore an emotional reaction is part of a !uality and favourable
e1perience $Cronin, *++-.. This is consistent with the findings of &ano and Oliver#s $,>>-.
on utilitarian and hedonic consumption /udgments, who argue that @...satisfaction is naturally
tied to cognitive /udgments and to affective reactions elicited in consumptionA $&ano and
Oliver, ,>>-,.. 2ong $*++<. found that negative emotions have a stronger effect on
satisfaction with !uality than positive emotions.
The concept of service !uality from the customer perspective, thus perceived service !uality,
is not a mistake simply because in the words of the guru @the consumer, of course, perceives
what he or she receives as the outcome of the process in which the resources are used, i.e. the
technical or outcome !uality of the process. 5ut he or she also, and often more importantly,
perceives how the process itself functions, i.e. the functional or process !uality dimension.
Thus, the technical !uality and functional !uality dimensions of perceived service !uality
emerge.A $Fronroos, C., *++, p.,B,..
2.9.3 2i#nific!nce !nd 4river" of 2ervice 6u!,it)
%elivering e1cellent service !uality is widely recognised as a critical business re!uirement
$oss et al., *++<a3 ilares and Coehlo, *++-.. :t is @not /ust a corporate offering, but a
competitive weaponA $(osen et al., *++-. which is @essential to corporate profitability and
survivalA $Iewman and Cowling, ,>>8.. &any authors agree that in today#s dynamic
marketplace and market space, organisation no longer compete only on cost but more
importantly on serviceEproduct !uality :n a competitive marketplace where businesses
compete for customers, delivering !uality service is seen as a key differentiator and has
increasingly become a key element of business strategy $7eskett, G.)., et al., ,>>D3 Hotler
*++8..
On the drivers of service !uality, the most widely used model is the 4ervice-;rofit Chain
$4;C., first proposed by 7eskett et al., $,>><.. :t provides one of the most powerful and
widely supported perspectives on this issue. Overall, the 4;C sees organisational internal
features as driver of employee satisfaction, which drives service !uality which is also
identified as an antecedent of customer satisfaction which in turn drives customer loyalty and
retention that eventually leads to profitability and growth.
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