Customer Satisfaction
Customer Satisfaction
LITERATURE REVIEW
2.1 Introduction
The followings are composed of several dimensions covering almost all important
elements that have been dealt with many other research works. Review of this
literature also brings to light other research findings and suggestions on similar
customer satisfaction practices. The purpose of this literature review is to verify
whether the selected model is applicable in this study. Since the research analyze the
impact of important contextual factors on these practice, several research findings
associated with some contextual factors are also discussed in this review. Literature
review covers the following areas of previous research studies;
I. Customer Satisfaction in China's Real Estate Industry, 2005
II. Real Estate Investment Trust and Customer Satisfaction in Apartment
Housing, 2008
III. Customer Satisfaction using Data Mining Techniques, 1998
IV. Analyzing Customer Satisfaction and Quality in Construction, 2004
V. Customer Satisfaction in Home Building, 2001
VI. Quality Management in Construction, 2005
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Many cases show that increasing customer satisfaction levels can bring a company's
facility and customer service systems to a level that's above and beyond the quality of
others [7]. ACSI (American Customer Satisfaction Index) model is a series of causal
equation, linking customer expectation, perceived quality, perceived value and
customer satisfaction together. In the model, customer satisfaction leads to two
results: customer complains and customer loyalty. Loyalty is regarded as the source of
customer retention and their tolerance to price. In the last decades. lots of causal
models were constructed to indicate the relationships among perceived performance,
customer satisfaction and loyalty, most of which concluded that increase in
satisfaction led to improvement in loyalty which might lead to repurchase, positive
word-of-mouth behavior, cross buying and price tolerance. But among these research
results, few of them took industry factors into account. There is no practical
suggestion for real estate enterprises to evaluate and improve customer satisfaction
either. Combined other scholars' results and industry conditions, we proposed a
customer satisfaction conceptual model for real estate enterprise.
There has been a quite obvious increase in the emphasis on a firm's ability to produce
high-quality products and/or provide high-quality s~rvices. Identification of high-
quality products or services can be achieved by measuring customer satisfaction \\-ith
these products or services. The concept of customer satisfaction transforms all
industries from production centralized to customer based. Several evaluation models
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or indices exist for assessing customer satisfaction in various industrjes. To. achieve a
highly reliable and stable index of satisfaction, the American CustoiTier Satisfaction
Index (ACSI) [44] defines the satisfaction as a weighted average of three survey
ratings: perceived quality, perceived value, and customer e~pectations. The ACSJ
index has been used to measure the satisfaction in the manufacturing/nondurables,
manufacturing/durables, transportation, communications and utilities, retails, finance
and insurance, services, public administration, and government. Although the ACSI
index has an accepted satisfaction evaluation methodology, it is not designed for the
construction industry. Generally, the evaluation result for customer satisfaction is
highest for competitive products, lower for competitive services and retailers, and
lowest for government and public agencies [45]. The ACSI system criteria cannot be
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adapted to the construction industry; a new evaluation model must be developed not
only for the construction industry, but also for CPM services.
may use different '·types" of expectations when forming opinions _a bout a product's
anticipated performance. There are four types of expectations: the ideat, the expected,
the minimum tolerable, and the desirable expectations. Many factors affect house
buyers' expectations, including marketing, advertising and sal~s promotions as well as
innate personal needs, word of mouth and competitive offerings. Measuring
expectations disconfmnation apart from expectations is also significant in consumer
satisfaction research [6]. Expectations disconfirrnation has a negative influence on
customer's perceived product and service value. Real estate enterprises should pay
attention to the inverse relationship between customer expectations and perceived
value.
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2.2.3 Perceived Price
Perceived price is the sacrifice of money to obtain certain product or service.
Perceived value comes from the interaction process between perceived quality and
customer's sacrifice. Higher price often means higher quality and may create higher
purchase intention. It also increases customer's purchase costs. Sometimes a house's
objective price is high, but for a certain customer it is acceptable, because the
customer feels that it's reasonable to afford such a sacrifice. In real estate industry,
rational customers pay more attention to product and service quality developers
supply. Comparative!} speaking, price is an influencing factor to customer
satisfaction, but not as critical as other factors. Developers should make an effort to
enhance housing planning and service quality as well as lower development cost,
because only those high performance-cost ratio houses will satisfy customers.
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2.2.5 Perceived Service Quality
Perceived service is the customer's perception of what actually did, should or will
occur. Service quality comes from service strategy, servi~e system and service
personnel. In the whole service process, customer perceives service quality by
evaluating service attitude, service content, service price, service equipment, service
efficiency and convenience; the six dimensions affect customer satisfaction through
affecting service quality perception.
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Customer will buy a house when the product quality matching its price, but they
cannot tolerate poor service level. Actually, our customer satisfaction survey (in five
residential communities in Hebei) results indicate 86.5 percent complaints come from
dissatisfaction with service.
If customer satisfaction level is supreme, it leads to customer loyalty that will bring
corresponding loyal behaviors and intention of repurchase, word-of-mouth, cross
buying and price tolerance respectively. China's real estate market has great potential,
a lot more Chinese would invest in real estate for profit in years to come, and
satisfaction improvement means more to real estate enterprises. High referral rates
and word-of-mouth have great impact on companies' sales because Jess money for
marketing would need to be spent. Besides, a loyal customer may have price tolerance
to expensive house or service. As there is a cross-regional development trend in
China's real estate market, cross buying (the customer's willingness to buy other
products or service provided by the same company) may improve housing developers'
profitability. If customer's perceived value is quite low, customer dissatisfaction will
come. Developers have to deal with complaints, negative word-of-mouth, and
customer defection. Undoubtedly, no one would like to be involved in those kinds of
problems. To avoid this risk, real estate enterprises Should know better what factors
lead to satisfaction and what factors lead to another direction, and then set up and
Implement a customer-oriented, quality-centered satisfaction strategy.
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other studies have repeatedly demonstrated that residential satisfaction is a key
component in predicting residential mobility, (McHugh, Gober, and Reid, 1990); (Oh,
2003); (Reschovsky, 1990); (Sinai, 2001).
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The following study uses data from a national consumer comment and rating site for
apartments. Despite the limitations inherent in using such open access ratings, several
academic studies have successfully employed similar data sources. (Dellarocas, Farag,
and Zhang 2008) found on-line consumer ratings to be the most significant
explanatory variable in predicting sales in motion pictures. Similar studies have found
such ratings to be successful in predicting sales in video games, (Bounie et al., 2005),
(cameras, Jiang and Wang, 2007), and books (Chevalier and Mayzlin, 2006); (Huang
and Chen, 2006). (Bickart and Schindler, 2001) reported that consumer comment sites
were far more influential in consumer behavior than traditional advertising. (Chiou
and Cheng, 2003) found that comments on such sites had a significant effect on
consumers' evaluations of brand quality, especially for low-image brands. Ratings
data from the website used in this study, ApartmentRatings.com©, have been
previously used in studies on the inter-connectedness of residential satisfaction
subcomponents, (James, Carswell, and Sweaney, 2008) and the change in residential
satisfaction in Baton Rouge, Louisiana following Hurricane Katrina, (James and
Zahirovic-Herbert, 2008).
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disaggregation analysis and rule induction data mining. The two methodologies were
applied to the results of a customer satisfaction survey.
According to the model, each customer is asked to express his/her judgme_nts, namely
his/her global satisfaction and his/her satisfaction with regard to the set of discrete
criteria. The collected data is analyzed with the preference disaggregation model,
respecting the ordinal and qualitative form of customers' judgments and preferences.
The main results of the method are, (Grigoroudis et al., 1998); (Siskos et al., 1998);
(Mihelis et al., 1998):
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2.4.2 Rule Based Data Mining T echniques
The objective of data mining is to extract valuable information from one's data, to
discover the ' hidden gold'. In Decision Support Management terminology, data
mining can be defined as 'a decision support process in which one search for patterns
of information in data' , (Parsaye, 1997).
Data mining techniques are based on data retention and data distillation. Rule
induction models belong to the logical, pattern distillation based approaches of data
mining. These technologies extract patterns from data set and use them for various
purposes, such as reduction of the value of a dependent field (Field to Predict). By
automatically exploring the data set, the induction system forms hypotheses that lead
to patterns. These patterns may be logic, equations or cross-tabulations. Logic can
deal with both numeric and non-numeric data.
The rule's probability is the probability that for a random record satisfying the rule's
condition(s), the rule's conclusion is also fulfilled, (Meidan, 1999). -~
Rules may easily go beyond attribute- value representatio.ns. They may have
statements such as 'shipping state = receiving state'. Here, in attribute logic, we
compare the values of the two fields, without naming any values. By expressing
attribute-based patterns. rules have the advantage of being able to deal with numeric
and non-numeric data (categorical fields).
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quality. A framework is developed to evaluate the dynamics of customer satisfaction
and quality. An empirical analysis is conducted to explore customer satisfaction in
construction as perceived by two customer groups: public and private customers.
Results indicate that the need for contractors to improve performance relates mostly to
quality assurance, handover procedures and material. Public customers were found to
be less satisfied with the contractor's performance than private customers. For a
contractor, the main benefit of high customer satisfaction is the opportunity to remain
a customer's potential partner in the future. (Sami Kama. , 2004)
(Ireland, 1992) emphasizes that the project manager's role is vital for mutual, trusting
relationships and customer satisfaction. Ireland also found that the project manager's
ability to manage customers relates directly to the success of the project. (Soetanto
and associates, 2001) additionally recognize that the satisfactory performance of
participants is a prerequisite to maintaining harmonious working relationships.
Because the performance of each participant in the construction project coalition is
interdependent, other participants should assess their performance.
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On the other hand, the customer satisfaction approach defines quality as the extent to
which a product or service meets and/or exceeds a customer's expectations. The
strength of this approach compared to the quality approach is that it captures what is
important for the customers rather than establishes standards based on management
judgments that may or may not be accurate. Customer satisfaction thus approaches
quality from a customer's viewpoint. According to this determination, it is the
customer who defines quality. The weaknesses of this approach are that measuring
customers' expectations is a difficult task and the fact that a customer's short-term
and long-term evaluations may differ, (Reeves and Bednar, 1994).
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(Barrett, 2000) sees that quality in construction can be thought of as the satisfaction of
a whole range of performance criteria held by an interacting host of stakeholders and
mediated by a range of mechanisms. According to (Winch and associates, 1998) the
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problem with the existing literature on construction is that it concentrates on the
problems of producers instead of providing value for the customer. ~re is a need for
customer orientation and satisfaction, not for allocating liability.
Customer satisfaction can be used for evaluation of quality and ultimately for
assessment of the success of a company' s quality improvement programme.
According to (Torbica and Stroh, 200 I), a quality improvement effort will lead to a
higher product and service quality, which will lead to improved customer satisfaction.
Their study has confirmed that implementation of TQM is positively associated with
homebuyer satisfaction, and it is the "total offering" that generates the total degree of
customer satisfaction. (Al-Momani, 2000) examined service quality in construction
delivered by contractors and the project ov.'Tier's expectati~
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gap as his analysis tool. He found that contractors pay very little attention to the
owners (customers) satisfaction, and that this contributes to poor performance.
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In Taiwan, the Government Procurement Law (GPL), promulgated on May 27, 1998,
allows several innovative concepts and regulations, including the PCM (the official
term in GPL is project management, therefore, construction project management
(CPM) is used hereinafter replacing the PCM term) approach and the most
advantageous tendering approach (42] for construction projects and procurement
entities. As stated in Article 39 of GPL-"In conducting a procurement, an entity
may entrust a supplier, according to this Act, with the project management related to
planning, design, supply, or contract performance", a construction project can have a
CPM contract to serve the consultative and administrative needs [43]. After the GPL
of Taiwan went into effect, the number of construction projects with CPM contracts
issued has been increasing (see Fig. 1). With CPM stepping into its flourishing phase
in Taiwan, it is necessary to appraise the performance of CPM services. This study
focuses on developing a customer satisfaction evaluation model for evaluating CPM
services and examines its applicability in Taiwan.
owner needs and generates profit. (Ahmed and Kangari [46] used six client-
satisfaction factors, including time, cost, quality, client orientation, c~mmunication
skills and response to complaints, to conduct a survey for analyzing the client-
satisfaction factors in the construction industry. They conclude~ that these six factors
are equally important when evaluating client satisfaction. Maloney argued that the
physical product and service delivery must be considered when assessing customer
satisfaction in the construction industry. For electrical construction projects. Maloney
proposed a dual-influence model using five dimensions contractor/customer
relationship, project management, safety, prepared/skilled workforce and cost to
evaluate customer satisfaction and for contractor selection decisions [47].
Furthermore, Maloney claimed that labor-management activities at levels of
contractor workforce, contractor- local union and contractor association-local union
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influence customer satisfaction (48]. Contractors need to establish partnerships with
labors to enhance customer satisfaction.
To measure home-buyer satisfaction, Torbica and Stroh [49- 51] developed a model,
called HOMBSAT, with three distinct dimensions of house design, house and
services. The indicators of house design and house are used to rate the product quality
of a transaction, whereas indicator of services is used to rate the service quality. The
HOMBSAT can provide a total home-buyer satisfaction across three dimensions to
the home builders to track the overall quality of their services. Moreover, Torbica and
Stroh also confirmed that a home builder can increase home-buyer satisfaction by
unplementing TQM (52]. In 2002 and 2003, J.D. Power and Associates reported that
the quality of workmanship/ materials and customer services account for 50% of
overall customer satisfaction among buyers of new homes, and the levels of customer
satisfaction increased significantly in the highly competitive home-builder industry
[53]. Liu, who surveyed residential satisfaction of housing estates in Hong Kong,
utilized questionnaires comprising nine categories with a total of 51 questions [54].
That study developed a well-structured post-occupancy evaluation method for
measuring customer satisfaction. (J.-B. Yang, S.-C. Peng I Building and Environment
43, 2008 p458- p468) ...
Tang et al. [55] investigated the client satisfaction of engineering consulting firms in
Hong Kong using a questionnaire-based survey. Their study used the following eight
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factors (expressed in 29 indicators) to evaluate overall client satisfaction:
professionalism of service; competitiveness of service; timeliness crf service; quality
of design; degree of innovation; completeness of other considerations; availability of
support for client; and, supervision at implementation. Tang et al. concluded that the
quality of engineering consulting services in Hong Kong was slightly higher (mean
score is 3.122) than neutral (default score is 3) [55]. Leung et al. (56] measured
participant satisfaction in the construction management process. Through 15
established and verified hypotheses, the study showed that management mechanisms
(e.g., communication, participation and commitment) rather than particular project
goals (e.g., time, cost and quality) influence directly participant satisfaction.
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2.7 Summary
In literature review it was found that in recent past, across the world, the progress of
the customer satisfaction and the degree of importance. The researcher further
emphasized the sustainability of the semi luxury apartment industry based on the
customer satisfaction and the importance of the customer expectations. The researcher
discussed the related research work about the customer satisfaction and the
Importance.
The literature shows that customer satisfaction research was one of the growing
segments of the marketing field and it discussed through Customer Satisfaction using
Data Mining Techniques and Multicriteria Satisfaction Analysis. Further it discussed
to measure the home-buyer satisfaction by using a model called BOMBAST, with
three distinct dimensions of house design, house and services.
Chapter three will further discussed the problem and methodology of the study can be
carried out.
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