18
a. Economic value Otherwise known as ‗value in use‘, this refers not just to the initial
purchase price but also to wider areas such as switching costs, training and installation costs, ongoing cost of maintenance, depreciation and
end-of-life disposal costs. By relating economic value in use to the requirements of the customer, a higher price can often be justified.
b. Perceived value Qualitative aspects of the product such as the brand, previous
experience and reputation can all add to perceived value. Whilst product may be functionally similar, the customer may perceive one as
superior to the other.
B. CUSTOMER SATISFACTION
1. Definition of Customer Satisfaction
According to Chitty et al., 2007 quoted by Mojtaba Kaveh 2011:4 customer satisfaction is a complete evaluation of the accumulated purchase
and consumption experience, which reflects a comparison between the sacrifice experienced and the perceived rewards. According to Gandolfo
Dominici and Rosa Guzzo 2010:3 customer satisfaction is the outcome of customer‘s perception of the value received in a transaction or
relationship, where value equals perceived service quality, compared to the value expected from transactions or relationships with competing vendors.
Roger Palmer et al., 2007:11 stated that customer satisfaction can be
19
considered as a measure of current performance, and the propensity of customers to recommend a product or service to other potential customers
can be one guide to the future value of customers. Barsky and Nash 2003 stated that in order to achieve customer satisfaction, it is important to
recognize and to anticipate customers needs and to be able to satisfy them. Enterprises which are able to rapidly understand and satisfy customers
needs, make greater profits than those which fail to understand and satisfy them.
According to Gandolfo Dominici et al. 2010:5 since the cost of attracting new customers is higher than the cost of retaining the existing
ones, in order to be successful, managers must concentrate on retaining existing customers implementing effective policies of customer
satisfaction and loyalty. Bitner and Zeithaml 2006:110 stated that satisfaction is the customers‘ evaluation of a product or service in terms of
whether that product or service has met their needs and expectations. Matzler et al., 2006:217 stated that if price will be high, the satisfaction
with price will be high. If there are no hidden costs and if prices do not change unexpectedly customers will perceive high price reliability.
According to Boselie, Hesselink, and Wiele 2002 satisfaction is a positive, affective state resulting from the appraisal of all aspects of a
party‘s working relationship with another. According to Hart and Stapletun 2005 consumer satisfaction is a person or organization who
actually makes the purchase decision even though it may not directly
20
consume or user of the product or service. They also stated that, satisfaction is the union of ones feelings resulting from the comparison of
the perceived usability of the product with the expectation of the product. While Gasfersz 2005 defines a consumer is any person who requires the
company to meet a certain quality standards and will therefore affect the performance of the company.
Oliver 2005 in Eggert Ulaga 2006 stated that customer satisfaction, which refers to ―the summary psychological state resulting
when the emotion surrounding disconfirmed expectations is coupled with the consumer‘s prior feelings about the consumption experience‖, is often
considered as an important determinant of repurchase intention and customer loyalty. According to Zeithaml and Bitner 2006:111 customer
satisfaction can be defined as a c onsumer‘s fulfillment response that is, it
is a judgment that ―a product or service feature, or product or service itself,
provides a pleasurable level of consumption-related fulfillment ‖.
Meanwhile, Hansemark and Albinson 2004 quoted by Harkiranpal Singh 2006:1 state that
―satisfaction is an overall customer attitude towards a company, or an emotional reaction to the difference between what
customers anticipate and what they receive, regarding the fulfillment of some need, goal or desire‖. On the other hand, Deng, Lu, Wei and Zhang
2009 stated that a high level of customer satisfaction may have a positive
effect on customer loyalty.
21
Kotler and Keller, 2012:150 define customer satisfaction as a function of the closeness between expectations and the product‘s perceived
performance or outcome. If the performances fall short of expectations, the customer is disappointed. If the performances meet the expectations,
the customer is satisfied. If the performance exceeds expectations, the customer is highly satisfied or delighted. These feelings make a difference
in whether the customer buys the product again and talks favorably or unfavorably about it to others. Parasuraman et al., 1988 quoted by
Mojtaba Kaveh, 2011:4 stated that satisfaction research is mainly influenced by the disconfirmation paradigm. This paradigm states that the
customer‘s feeling of satisfaction is a result of a comparison process between perceived performance and one or more comparison standards,
such as expectations. Meanwhile, Lovelock and Wirtz 2004:44 define satisfaction as an
attitude like judgment following a purchase act or a series of consumer product interactions. The confirmationdisconfirmation of preconsumption
expectations is the essential determinant of satisfaction. This means that consumer have certain service standards in mind their expectations prior
to consumption, observe service performance and compare it to their standards, and then form satisfaction judgment based on this comparison.
The resulting judgment is labeled negative disconfirmation if the service is worse than expected, positive disconfirmation if better than expected, and
simple confirmation if as expected.
22
Based on Casalo´ et al. 2008 quoted by Norazah Mohd Suki, 2010:8 satisfaction refers to an affective consumer condition that result
from a global evaluation of all the aspects that make up the consumer relationship. Thus customer satisfaction remains an extremely important
component in customer loyalty. A company will find it difficult to earn customer loyalty without first earning high levels of customer satisfaction.
According to Ulaga and Eggert 2006 the customer is satisfied when heshe feels that the product‘s performance is equal to what was expected
confirming. If the product‘s performance exceeds expectations, the customer is very satisfied positively disconfirming, if it remains below
expectations, the customer will be dissatisfied negatively disconfirming.
Figure 2.2 The Disconfirmation Model of Consumer Satisfaction
Source : Lovelock and Wirtz 2004
Expected Performance Perceived Performance
Comparison
P - E
Confirmation
Neutral P E
Positive Disconfirmation
Satisfaction P E
Negative Disconfirmation
Dissatisfaction
23
2. Factors that Formed Customer Satisfaction