Chapter 2

REVIEW OF LITERATURE AND STUDIES

This chapter presents the literatures and studies that helped the researchers in the study.

These related literature and studies had support this investigation.

LITERATURE

A customer is an individual or business that purchases the goods or services produced by

a business. Attracting customers is the primary goal of most public-facing businesses, because it

is the customer who creates demand for goods and services. Businesses often compete through

advertisements or lowered prices to attract an ever-larger customer base. Businesses often follow

the saying "the customer is always right" because happy customers are expected to continue

buying goods and services from companies that meet their needs. Many companies closely

monitor the relationships they have with customers, often asking for feedback to learn whether

new products should be created or adjustments made to what is currently offered. Virtually

everybody in a modern economy buys products or services from companies, and so almost

everybody at least occasionally acts as a customer. Several traits mark a customer as opposed

to a client or vendor.

According to Apruebo (2010) the customer is the ultimate objective of every business.

Therefore, the company is responsible to meet their expectations to ensure their loyalty to the

company. Customer satisfaction is the key to profits, secures future revenues, reduces the cost

of future transactions and narrows price fluctuation. Measuring customer satisfaction will enable
businesses to understand customer expectations and determine the areas that need

improvements.

Client happiness, which is a sign of customer satisfaction, is and has always been the

most essential thing for any organization. According to Tse & Wilton (1988) customer satisfaction

is the consumer’s response to the evaluation of the perceived discrepancy between prior

expectations and the actual performance of the product or service as perceived after its

consumption. Some authors stated that there is no specific definition of customer satisfaction,

and after their studies of several definitions they defined customer satisfaction as “customer

satisfaction is identified by a response (cognitive or affective) that pertains to a particular focus

and occurs at a certain time. (Giese & Cote, 2000). It is factual that, there is no specific definition

of customer satisfaction since as the years passes, different authors come up with different

definitions. Customer satisfaction has also been defined by another author as the extent to which

a product’s perceived performance matches a buyer’s expectations (Kotler et. al., 2002).

According to Schiffman & Karun (2004) customer satisfaction is defined as the individual’s

perception of the performance of the products or services in relation to his or her expectations. In

a nutshell, customer satisfaction could be the pleasure obtained from consuming an offer.

Consumer emotions played a significant role with the product or services satisfaction.

When a customer in a happy moment of life or positive frame of mind that influenced the service

experience and feel good. Alternatively, when customers passing through bad mood or negative

feelings they might over react or respond negatively towards the service. It is normally seen that

positive emotions had a stronger effect than negative one. Specific emotions may also be

influenced by the consumption experience itself, influencing customers’ satisfaction with the

service.

Store managers and associates must handle difficult customers discreetly and

professionally to keep to them satisfied and retain their business, regardless of the circumstances.
You must pull the customer aside. Guide the customer to the grocery store service desk, or to an

area that doesn't block customer traffic if the incident occurs a distance away from the service

desk. A difficult or angry customer causing a commotion in a crowded grocery store can prompt

other customers to jump in, and still others may get upset and blame you for their ruined shopping

experience if you fail to move the difficult customer to a quiet area. You must listen to the

customer. Anger sometimes arise from frustration at not being heard. Make eye contact while the

customer explains the problem. Ask him to point out the problem, and if it results from faulty

merchandise, examine the item closely. Avoid becoming defensive, and instead of interrupting

the customer, wait until he finishes explaining his problem and why he's angry before you respond.

And then compromise with the customer. Offer the customer a substitute item, a rain check or a

gift certificate if you are unable provide the merchandise he wants. Customers sometimes get

upset in grocery stores during high traffic times, especially if they think store management isn't

doing enough to make the long lines move faster. To get a difficult customer to calm down, open

up an additional cash register and add extra grocery baggers, if possible, or discreetly invite the

difficult customer to check out at the service desk.

According to Harris (2007), one of the most effective and least expensive ways to market

a business is through excellent customer service. The customer is the end goal of business so

the importance of customer service is at an all-time high. Businesses do understand that selling

products or services alone will not be enough in today's aggressive economic situation.

Customer service is in style. People are talking about its importance and go into the

marketplace expecting to receive it. The provision of customer service is an important component

of the business cycle. In many cases, customer service is the positive element that keeps current

business coming back. The customer service provider is frequently the one who "saves the day"

and the account (Harris 2007). Some businesses offer promotions, price slash or discounts to

bring in new customers and bring back of clients. Good customer service is about happy

customers coming back, satisfied enough to pass on the positive reviews or feedback about
products or services along to others, who in turn may become new clients and eventually comes

back who will also pass on their good experiences.

Products have both tangible and intangible benefits. Tangible benefits include benefits,

which can be measured such as the top speed of a car. Intangible benefits are benefits that cannot

be measured such as the enjoyment the customer will get from the product. It is important that

the product is changed as necessary to bring it up to date and prevent it from being overtaken by

competitor. A service is also an economic activity that creates value and provides benefits for

customers at specific times and places by bringing about a desired change in, or on behalf of the

recipient of the services (Grönroos, 2007). By giving benefits to customers, both tangible and

intangible, it became your edge to your competitors because customer loyalty is gained and they

will go back and buy products to you more often.

High-standard customer service can win your clients’ hearts and make you recognizable

within your target group. Nowadays when social media play such an important role in making

decisions it’s crucial to keep an eye on a quality of customer service you provide. Lovelock (2010)

defined a satisfying service performance is like a good play in theatre; good actors (service

personnel), good storage set (or service venue, physical facilities, equipment, etc.) and good

staging (or service processing).

Providing a great customer service will satisfy both you and your targets. They get a proper

service, you get a proper revenue and everyone is happy. The importance of customer

satisfaction should never be neglected. You should consider it especially while planning your

marketing and positioning campaigns. Satisfied customers are more likely to share your content

across the social media. They will also more keenly interact with your posts, leaving some

delightful and admirable comments. Later you can use it as the source for case studies and

success stories.

Satisfied employees help produce satisfied customers. Satisfied employees are likely to

assist customers with a more pleasant demeanor and a higher level of customer service. This
creates a more satisfying customer experience, increases customer loyalty, and ultimately drives

increased profitability. Conversely, low employee satisfaction and overall low employee morale

can negatively affect company operations greatly, causing dissatisfied customers and hurt

profitability. When you provide employees with the tools and skills they need, employee

satisfaction rises as does the ability to service customers better. Employee satisfaction raises

employee productivity, and higher productivity means greater service and value to your

customers. This value leads to increased customer satisfaction and loyalty, which promotes

profitability and continued success.

Product is all that can be offered in the market to get attention, demand, usage or

consumption that can satisfy the needs of consumers. According to, Kotler (1999) people satisfy

their needs and wants with products. A product is anything that can be offered to a market to

satisfy a need or want. Before quality can be measured, the meaning of quality itself should be

understandable. Quality could be defined as a value or conformance to the specifications which

can lead the organization to focus on efficiency. Also quality is the expectations of consumers

towards a goods which rapidly changing by time and force the management to keep fulfill what

the customer wants.

Quality is one of the things that consumers look for in an offer, which service happens to

be one. Quality can also be defined as the totality of features and characteristics of a product or

services that bear on its ability to satisfy stated or implied needs. It is evident that quality is also

related to the value of an offer, which could evoke satisfaction or dissatisfaction on the part of the

user.

It is important to note that the quality of the product is not reviewed by the company

standpoint, it is seen from the perspective of the customer. Associated with that, it raised two

important factors that affect the quality of the product, namely the expected product quality and

the perceived product quality. In details, if the perceived product quality is in line with the

expectation, then the customer will perceive the product quality as a good quality and also feel
satisfied. Conversely, if the perceived product quality is not as expected, then the quality of the

product as the customer perceived is qualified as a bad product quality. Thus, the qualification of

both bad and good product depends on the ability of the company to meet the customer

expectations.

STUDIES

Many researchers have also studied customer satisfaction and have well understood the

behavior of the customers towards a product considering their satisfaction. Beltran, et. al. (2012)

in their study mentioned that after having conducted the gathering of data, they were able to

determine that, among the four marketing mix variables, product created the biggest impact on

the satisfaction. Customers were very much satisfied with the value that they get from their money

that they have to spend to acquire a product and services. On the other hand, less satisfying

prices because of not giving any kind of incentive to its customers in terms of discounts and price

reduction made the customers unhappy. Good customer service is also a must for any firm

offering a product or service. Furthermore, customers were very satisfied with the word of mouth

that they hear from past customers. These noticeable sharing experiences attract new customers

and make existing customers feel good about the purchase of the product that they have done

therefore it is a good start for the company to initiate a good scheme of delighting every customer

that purchases their product or service. Apparently, poor packaging and presentation of the

product does not make a remarkable appeal to the eyes of the customers.

According to Sachdev and Verma (2004) service quality can be measured in terms of

customer perception, customer expectation, customer satisfaction and customer attitude.

Customer perception encompasses the impression, awareness and/or consciousness about a

company offering. Customer perception is typically affected by diff channels of distribution such
as reviews, advertising, public relations, and social media. On the other hand, customer attitude

can help business understand customer better and perhaps even change their attitudes.

In the study conducted by Omania (2010), food quality, service quality, cleanliness and

ambiance and speedy service were important dimensions affecting customer satisfaction which

in turn determine revisit intentions to food service establishment. The study found a positive and

significant relationship between satisfaction and recommendation. Its findings confirmed that

relatives and friends were major sources of information for customers of the selected restaurants.

It established that positive word of mouth communications is a critical factor of success.

Giving competition in the industry and the increasing importance of customer patronage

impose the need to provide better services and satisfy customers. Service competencies can be

improved through employee training. It is the employee's duty to give the best service they can

and they can do that by listening to and learning from whom they serve.

According to Carlos Jr. (2001), the desire of supermarkets to provide their customers

always with new and clean products paved the way to their assessment that cleanliness and first

in first out (FIFO) products are their number 1 consideration. Providing customers with affordable

and accessibility to public transport and nearest to residential homes will provide easy access

and convenience to customers. Supermarket personnel are more aware and concerned of the

needs of the customers, therefore their marketing and operations practices effectively meet the

customers' expectations and desired satisfaction will be attained by the target customers.

In a study, David and Heinelle (2003) suggested that although the service is an obligatory

task consumption type of service, the willingness of the employees of the organization to provide

assistance, individualized treatment of customers while performing their task professional may

encourage the customers shaping a positive perception to customer's mind and attract them to

continue their good services.

determine critical success factors in order to be recommended to other people. Good systems,

combined with well-trained staff and ensure that errors are reduced or eliminated because less

errors will lead to less complaints. In order to improve the level of customer satisfaction, the

company should seek more ways to understand the needs of its customers. Ekinci (2003)

indicates that the evaluation of service quality leads to customer satisfaction.

Synthesis and Relevance of the Reviewed Literature and Studies

Customer satisfaction presents a versatile cross-channel metric to measure the retailer’s

strengths and weaknesses from the point of view of the customers. Since satisfaction drives the

behavior, a more deep understanding of what drives the shopper satisfactions will give retailers

insights they need to influence consumer behavior in the short-term and long-term. Customer

satisfaction is exercised to become a driving force in sales growth and increasing loyalty where

each channel is optimized to meet the customers need and exceed their expectations.
BOOKS

Grigoroudis, Evangelos & Siskos, Yanis (2010). Methods for Measuring and Implementing Sevice
Quality. Springer New York Dordrecht Heidelberg London.

Grönroos, C. (2007). Service Management and Marketing: Customer Management in Service

Harris, E. (2007). Customer Service, A Practical Approach (6th ed.). Pearson Education, Inc.

Kotler P., Armstrong G., Saunders J., & Wong V. (2002). Principle of Marketing (3rd ed.) Pretence
Hall Europe.

Kotler P., & Armstrong G., (1999). Principle of Marketing. Europe.: Prentice Hall.

Lovelock, C. (2001). Services Marketing: People, Technology, Strategy. Upper Saddle River, N.J.:
Prentice-Hall International.

Schiffman, L. G. & LazarKanuk, L. (2004). Consumer Behaviour (8th ed.) New Jersey Pearson
Education Inc.: Upper Saddle River Titus.

JOURNALS

David, M. and J. Heinelle (2003). Managing services: Using technology yo create value, McGraw-
Hill/Irwin

Ekinci, Y., An investigation of the determinants of customer satisfaction. Tourism Analysis 8(2):
193-196
Giese, J. L., & Cote, J. A. (2002). Defining Consumer Satisfaction. Academy of Marketing
Science,2000(1), 1-24.
Sachdev, S.B., and Verma, H. V. (2004), Relative importance of service quality. Journal of
Services Research 4(1): 93-61
Tse, D. K., & Wilton, P. C. (1988). Models of Consumer Satisfaction: An Extension. Journal of
Marketing Research, 204-212.

UNPUBLISHED THESIS

Ariola, M. M., Customer Service Quality in Robinsons Land Corporation, Graduate School - MBA
Beltran, M. J. B., et al. (2012). "Level of Customer Satisfaction of Selected Milk Tea Drinkers at
De La Salle University Vis-a-Vis the Marketing Mix, De La Salle University - Manila, August.
Carlos Jr., E. R. (2001). "The Level of Customers Satisfaction on the Operations and Marketing
Practices of Selected Supermarkets in Metro Manila" Unpublished Masteral Thesis, UST
Omania, C. D. (2010). "Relationship of Quality Sevices and Customer Satisfaction of Selected
Restaurants in Serendra, Taguig City" Unpublished Masteral Thesis, UST
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