Research Background
Introduction
Research Background
In the service industry, the consumer satisfaction is considered to be of utmost importance. It is necessary for the consumer satisfaction and retaining customers for a long-term tenure. However, there is always a possibility of service failure, due to technical or human error. These failures in the effective customer delivery result in the customer dissatisfaction. In the service industry, each and every customer is important for the organization. One dissatisfied customer will result in ten customers to return back from the organization. It erodes the goodwill of the organization. Therefore, it can be posited that once a service failure occurs, the organization requires taking the crucial step of service recovery. The service recovery refers to the action, aimed at gaining back a dissatisfied customer (Casidy & Shin, 2015). The service failure and the service recovery encounter are critical moments of truth in a service organization. When a service failure occurs, the business organization has two options, either to reinstate the customer satisfaction to reinforce customer loyalty or to ignore the situation and motivate customer to join a competing business organization. Therefore, it can be stated that the service failure and the service recovery signify critical moments of truth in the relationship between the customers and the service providers.
The service recovery encounters provide the customer with the opportunity to strengthen the bond between the customers and the business organization. Therefore, the service recovery is a strategic marketing tool, which can provide valuable return to the organization. It results in increased customer satisfaction and high customer loyalty rate. In the service industry, the business organizations encounter a very intriguing phenomenon, which is called service recovery paradox. It I the phenomenon, in which the customers, who have suffered from the service failures and successfully remedied were more satisfied and loyal, in comparison to the customers, who have never experienced any failure (Sengupta, Balaji & Krishnan, 2015). It means that these customers were more likely to be loyal and they remain engaged in favourable word -of-mouth than the customers, who have never experienced any failure. Similarly, the service dissatisfaction arises from the inability or unwillingness of the employees to provide high quality service to the customers. The research also highlights that it was not thee initial failure, which resulted in the customer dissatisfaction, but the response of the employee at the service encounter. In this regard, the present research will discuss the effect of customer delivery on the customer satisfaction. Also, it aims to evaluate the consumer response for the service recovery strategies.
Problem Definition
Problem Definition
The service failure is an aspect of the service industry. The complaint management is considered as an important tool for the business managers in the service industry so that the customers can complain about the inconsistency between their service expectations and demands. However monitoring the service quality is not enough and the business organizations should focus on understanding. How customers react to the failure in the service (Nikbin, Iranmanesh, Hyun, Baharun & Kim, 2015). Therefore, it is important to evaluate the consumer reaction to different types of problem severity and the service recovery options.
Research Questions
The research questions of the present research can be framed as:
- What are the reactions of the customers to service failure and different service strategies?
- Does the service recovery paradox is true, and the customers become happier after a highly satisfied service failure and recovery encounter?
Literature Review
In the perspective of Choi & Choi (2014), the service recovery refers to the actions taken to address the consumer complaints for a particular service failure. The service recovery is the process in which the organization takes step to remove the negative perception of the consumers. The service failure is a situation, when the company is not able to meet the expectations of the organization. It results in dissatisfied customer, who is motivated to engage with the competing firms. Therefore, the business organizations should use appropriate service recovery strategies so that the customer remains engaged with them. According to McCollough, Berry, & Yadav (2000), the service recovery option is also important as it can easily spread bad word of mouth. Therefore, it is important for the organizations to develop service recovery strategies, which can resolve the problems of the customer and remove the negative attitude from their behaviour. In the present competitive times, it is also important for the business organizations to build long-term relationships so that it can maintain their market share.
In the views of Hess, Ganesan & Klein (2003) the service recovery can be defined as the well-planned, sorted out process, which has the capability in gaining back the satisfaction of the aggrieved customers. There is a different between the complaint management and the service recovery approaches as the almost every second customer is reluctant to complain to the organization, even when they have faced difficulties in gaining the service. In the service recovery approach, the organization tries to stop customers from complaining for any issues in the service delivery.
According to Wallin Andreassen (2000) in the service encounter, the service failure represents a second service encounter in which the customer recognizes a specific problem in the service delivery or the service provider. If the expectations of the organization are not met, then the organization provides another set of service, called service recovery option. Therefore, it can be stated that the service recovery is a technique to achieve the customer loyalty. The organization should focus on effective service recovery strategies so that it can achieve the customer loyalty. The service recovery options also allow the customers to maintain its customer base for a prolonged period. In the service organizations, effective customer recovery strategies are important to deal with the customers, who have encountered service encounter. It will also save the cost related to the dissatisfaction of the customers.
Research Questions
However, according to Hess, Ganesan, & Klein (2003), most of the research stated that the companies should pay enough attention to manage the customer complaints. Moreover, a large number of consumers are discontented that the company does not handle their complaints in an efficient manner. It means that the consumer complaints are not properly handled by the business organizations. The present is service-oriented economy; therefore, the disregard to the consumer complaint can result in severe consequences for the customers. There are several short-term and long-term consequences of the consumer dissatisfaction such as negative word-of-mouth and switch to other consumers. The consumer once lost will have negative consequences for the overall organization. The overall income for the acquisition of new customer is higher than the service recovery strategies.
In the views of Sengupta, Balaji & Krishnan (2015) it also reduces the loyal feelings of the customers towards the organization. The organization should focus on developing a holistic and positive approach to handle the consumer complaints. The companies should emphasize on creating positive relationships and they should generate positive communication with the organization. The primary benefit of the service recovery strategies is preventing the deflection of the customers towards other competing organizations. The customers, once deflected are difficult to regain back. It will result in customer retention as gaining new customers is costlier than retaining the previous ones. The development of a loyal customer base is beneficial to the company is various ways, as these customer will bring other potential customers with positive word of mouth.
In the views of Collier, Breazeale & White (2017), there are different theories, which lead to the development of the service recovery strategies in the organization. It is the responsibility of the business organizations to develop effective service recovery strategies, which can recognize the inconvenience that a failure in the service has caused the customers. The distributive justice refers to the perception of the consumers regarding the complaints. It encompasses the fundamental of equity, equality and the consistency in the needs when different resources are exchanged between the consumer and the organization. The distributing justice identifies the recovery measures which are developed on the consumer perception of the equity based on the expenditure of the company’s resources and tangible outcomes of the service encounter. It develops specific outcomes, which the organization or the service provider can use to recover the mistakes in the past service offering to the customers. The service providers can provide different offers related to the discounts, coupons, and refunds.
Literature Review
According to Maxham III & Netemeyer (2002) the decision whether a service failure is worthy of recovery efforts is based on the treatment of the consumers and the amount of loss that they have to bear, as a result of the failure in the service delivery. However, the satisfaction arising from the service recovery action is based on the consumer relationship with the business organization. If the same amount of recovery is provided, the customers in a high quality relationship will consider fairness, whereas, the consumer in low quality relationship will consider lower fairness confirming their negative attitude towards the organization. The literature has highlighted that the consumers always expect that the organization will treat their customers in a fair and polite manner. If the same consumer experience is not provided, the consumers become angry and skeptical in shopping with the organization again. The group-value model states that the consumers value their relationship with the service provider and the organizations will suffer various direct and indirect effects, if the consumers assume that they are treated unfairly.
In the views of Buttle & Burton (2002), along with it, if the organization does not immediately identify the cost, time and efforts of the consumers in seeking service, it will also result in service failure. Every consumer has different level of expectations regarding the compensation, which is based on the type of service failure. The distributive justice is significant dimension in understanding the customer evaluation of the service recovery.
In the perspective of Kuo & Wu (2012), in the service failure, word-of-mouth plays a critical role. The word-of-mouth can be defined as the message regarding an organization’s credibility, trustworthiness and the efficiency in the business. It is the communication between two different consumers, which play a critical role in the consumer attraction and the consumer retention. The word of mouth is the informal communication, in which they show concern about the quality of the services or products delivered by the firm. It is different from the consumer complaints, in which the customers make formal complaints to the organization. In the service industry, setting, the word-of-mouth is considered as an important post-purchase behavior. In this communication, the company talks about the noticeable, personally experienced and complicated qualities of the product or the service. The literature highlights that when the consumer achieve satisfaction with the service, it results in positive communication to other consumers.
Acording to Maxham III, & Netemeyer (2003) the word of mouth can be defined as the communication between the consumers regarding the characteristics of the product and the service. The word of mouth is an important piece of information, which is a part of the post-purchase behavior of the organization. The word-of-mouth provides valuable information, and it can influence the perception of others. It can also influence the intent of other customers for making the purchase decision. The word-of-mouth can be positive or negative in its overall impact to the organization. It is almost as important as the face-to-face communication and emits information, which can establish a brand image of the organization. It rewards the companies, if they are considerate of high consumer satisfaction. It can be stated that if the consumer accept a fair treatment of the service recovery, they will engage in positive word of mouth in a more enthusiastic manner.
According to Ok, Back & Shanklin (2005), the service delivery process is complicated process as the service requires an interaction between the purchaser and the workers of the company. However, in the service industry, the service failures are regularly encountered. It can be posited that the service failure cannot be completely eradicated from the service companies; therefore, the service provider should carry out the recovery strategies, so that the negative effects of the service failure can be reduced. Further, the companies should also focus on the influence of the service recovery on the consumer satisfaction.
The service failure results in the emotional experience from the customers. The inadequate customer treatment can result on the intensive negative emotions. However, the emotional response of the customers is controlled by the age of the individual. The service recovery strategies are developed to control the negative emotions of the consumers. The service recovery strategies are used to design the actions of the organization, which it will follow after a service failure.
Methodology
The research methodology is an important aspect of the research. It provides direction to the research and impacts the outcome of the research. In the current research, the positivist research paradigm will be used (Silverman, 2016). The positivist research philosophy states that the factual knowledge is gained through observation and measurement. In the positivism research, the focus of the research is to collect the data in and interpret it in an objective manner (Smith, 2015). The positivism research paradigm is applied when the research findings can be represented in a free manner. It is a philosophy, in which the researcher follows the empirical views that the knowledge develops from the interactions of the humans with his environment. In positivism, the researcher is independent of the study and the researcher focuses on the facts that the researcher is required to focus on the facts.
Along with it, the researcher has applied the deductive approach to accomplish the objectives of the research. The deductive approach is the process in which, the researcher is focussed to develop a hypothesis on the existing theory (Panneerselvam, 2014). In the research, the researcher validates the theory or the hypothesis. The deductive approach is the process in which a causal relationship is implied by a particular case or theory. The deductive design evaluates the relationship or the link between two different valuables. The deductive approach is used to explain the causal relationships between two different variables measure the concepts quantitatively and generalize the findings (Neuman and Robson, 2014).
In the present research, the data collection tool of survey instrument is taken. In this method, different questions will be designed in accordance to the research aims and objectives. It is a primary data collection method. The data collection methods can be divided into primary and secondary research methods. In the primary research method, the information is obtained directly from the participants. On the other hand, in secondary research, the research uses the information obtained by other researchers. It is a quantitative research method (Mackey and Gass, 2015). It means that the researcher will collect the information from the statistical methods. The data is statistical in nature and can be analysed through quantitative methods.
The survey will be administered to the management executives in the service industry. The sample size selected for the research is 100. It survey participants will be selected through random sampling. In the random sampling method, each member of the population has an equal chance of getting selected as a subject. The sampling process in conducted in such a manner that each research participant is independent and has an equal chance of being chosen for the research. The simple random sampling method is chosen as there is an ease in selecting the participants of the sample (Kumar, 2014). Another benefit of the random sampling method is that it can represent the entire population. When the sample is not able to represent the entire population, a random variation occurs, which is also called the sampling error (Glesne, 2015). The survey questionnaire will be sent to the research participants with the help of email ID. Along with it, a consent form will be sent to the participants. The research participants will have to fill the survey questionnaire and the consent form. The consent form is necessary to make the research participants aware of the aims and objectives of the research process (Flick, 2015). They can also understand the privacy terms of the research. The participants have to revert back in three weeks.
The researcher will abide by the ethical considerations of the research community. The researcher will make sure to authentically cite the work of other authors. The information taken from other authors has been cited appropriately within the text. Other than that, the researcher will make sure that the personal information of the research participants is secured. The researcher will take appropriate measures to maintain the privacy and the confidentiality of the researcher. The research will be carried out in a transparent manner. The researcher will make sure that the information collected from different sources is represented accurately without any fabrication (Gast and Ledford, 2014). The research ethics compliance is important to gain the trust of the research community. The involvement of the human subjects or animals raises important questions regarding the ethical, legal and the social issues (Taylor, Bogdan and DeVault, 2015). The ethics allow the researcher to conduct the research in a proper manner. In this regard, the researcher has carried out the research so that it is conducted in a manner that it supports the interest of the individuals and the society as a whole (Resnik, 2015, December).
References
Buttle, F., & Burton, J. (2002). Does service failure influence customer loyalty?. Journal of Consumer Behaviour, 1(3), 217-227.
Casidy, R., & Shin, H. (2015). The effects of harm directions and service recovery strategies on customer forgiveness and negative word-of-mouth intentions. Journal of Retailing and Consumer Services, 27, 103-112.
Choi, B., & Choi, B. J. (2014). The effects of perceived service recovery justice on customer affection, loyalty, and word-of-mouth. European Journal of Marketing, 48(1/2), 108-131.
Collier, J. E., Breazeale, M., & White, A. (2017). Giving back the “self” in self service: customer preferences in self-service failure recovery. Journal of Services Marketing, 31(6), 604-617.
Flick, U. (2015) Introducing research methodology: A beginner’s guide to doing a research project. USA: Sage.
Gast, D. L., and Ledford, J. R. (Eds.). (2014) Single case research methodology: Applications in special education and behavioral sciences. UK: Routledge.
Glesne, C. (2015) Becoming qualitative researchers: An introduction. USA: Pearson.
Hess, R. L., Ganesan, S., & Klein, N. M. (2003). Service failure and recovery: The impact of relationship factors on customer satisfaction. Journal of the Academy of Marketing Science, 31(2), 127.
Hess, R. L., Ganesan, S., & Klein, N. M. (2003). Service failure and recovery: The impact of relationship factors on customer satisfaction. Journal of the Academy of Marketing Science, 31(2), 127.
Kumar, R. (2014) Research methodology: A step-by-step guide for beginners. Sage.
Kuo, Y. F., & Wu, C. M. (2012). Satisfaction and post-purchase intentions with service recovery of online shopping websites: Perspectives on perceived justice and emotions. International Journal of Information Management, 32(2), 127-138.
Mackey, A., and Gass, S. M. (2015) Second language research: Methodology and design. Routledge.
Maxham III, J. G., & Netemeyer, R. G. (2002). A longitudinal study of complaining customers’ evaluations of multiple service failures and recovery efforts. Journal of marketing, 66(4), 57-71.
Maxham III, J. G., & Netemeyer, R. G. (2003). Firms reap what they sow: the effects of shared values and perceived organizational justice on customers’ evaluations of complaint handling. Journal of Marketing, 67(1), 46-62.
McCollough, M. A., Berry, L. L., & Yadav, M. S. (2000). An empirical investigation of customer satisfaction after service failure and recovery. Journal of service research, 3(2), 121-137.
Neuman, W. L., and Robson, K. (2014) Basics of social research. Canada: Pearson Canada.
Nikbin, D., Iranmanesh, M., Hyun, S. S., Baharun, R., & Kim, I. (2015). The role of airline travelers’ pre-recovery emotions during the service recovery process. Journal of Travel & Tourism Marketing, 32(6), 677-691.
Ok, C., Back, K. J., & Shanklin, C. W. (2005). Modeling roles of service recovery strategy: a relationship-focused view. Journal of Hospitality & Tourism Research, 29(4), 484-507.
Panneerselvam, R. (2014) Research methodology. USA: PHI Learning Pvt. Ltd.
Resnik, D. B. (2015, December). What is ethics in research & why is it important. In ideas.
Sengupta, A. S., Balaji, M. S., & Krishnan, B. C. (2015). How customers cope with service failure? A study of brand reputation and customer satisfaction. Journal of Business Research, 68(3), 665-674.
Sengupta, A. S., Balaji, M. S., & Krishnan, B. C. (2015). How customers cope with service failure? A study of brand reputation and customer satisfaction. Journal of Business Research, 68(3), 665-674.
Silverman, D. (Ed.) (2016). Qualitative research. USA: Sage.
Smith, J. A. (Ed.). (2015) Qualitative psychology: A practical guide to research methods. USA: Sage.
Taylor, S. J., Bogdan, R., and DeVault, M. (2015) Introduction to qualitative research methods: A guidebook and resource. USA: John Wiley and Sons.
Wallin Andreassen, T. (2000). Antecedents to satisfaction with service recovery. European Journal of Marketing, 34(1/2), 156-175
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
