Customer Satisfaction Literature Review Chapter

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[. . .] Although we find evidence that the adoption of nonfinancial measures improves firms' current and future stock market performance, we find only partial support for accounting performance improvements. Overall, the results indicate that the association between the use of nonfinancial measures and firm performance is contingent on the firm's operational and competitive characteristics. (2003, p. 5)

In the non-manufacture sector literature systems such as Total Quality Management also address the fact that employee training in the service industry is an essential aspect of customer service. One must not ever assume that employees will use common sense when dealing with customers, and be courteous and helpful. One must train such behaviors and sanction negative behaviors, when they are documented. (Luthans & Kessler, 1993, p. 2) Without such awareness it cannot be assumed that employees will meet and/or exceed quality standards in the industry and positively represent the company. Individuals may not be aware of cultural diversity, with regard to customer service or any number of other issues that could be addressed by simply training employees and then utilizing non-financial measurements to stress the necessity of such training and action. (Luthans & Kessler, 1993, p. 2) Management strategies become counterproductive and do not offer the employee real incentive to strive for achievement, and a downward spiral ensues, where time limits and quotas, rather than quality and careful attention to detail, drive workplace motivation and drive good employees out of the job/field/industry. Though total quality management did not necessarily evolve in the manufacture industry is such issues as are raised by it are not addressed the development of business could be lacking.

Another and final mention in the review of literature associated with the use of non-financial performance measures is the necessary mention of relationship marketing, which took root in manufacturing more than 50 years ago but is not known as an aspect of Chinese manufacturing, due in part to lack of research. Relationship marketing has a relatively short history in the business and marketing world, and has been and will likely continue to be defined as the manner in which firms develop and maintain lasting relationships with existing customers in an attempt to retain and reengage these same customers. There is a clear sense that external relationship marketing demonstrates a more effective business strategy than attempting to gain new customers, dollar per dollar as existing customers already have a relationship with the firm and to some degree understand the workings of the firm. Companies that retain existing customers while creating new ones experience much more rapid growth. (Seroka, Feb 2000, p. 43). The reasons for success associated with the narrow definition of RM is associated with lower cost of contact, meaning that it costs less in time and resources to communicate with existing customers than it does to seek novel customers via various marketing means. RM has also been traditionally focused on larger customers, where the firm places most of its resources on keeping the big customers close and happy so that when they seek to utilize services again. Kindling and rekindling these relationships can vary a great deal by business and industry but as is noted in businessdictionary.com this often means the one on one relationship development with large customers. Historically speaking the RM trend began in the mid 1970s in Europe with a small group of firms in the industrial marketing and purchasing group (IMP) and was then introduced to the services industry and lastly to consumer markets (Veloutsou, Saren & Tzokas, 2002, p. 433). Despite this manufacture history RM and its use in Chinese manufacture is an unknown factor and could be used to apply greater emphasis on customer satisfaction in this ideal setting where a large business relies on a small number of large wholesale customers for its future.

Though the research aspect of this work utilizing a qualitative assessment of the manner in which customer satisfaction is seen as a factor in business dealings among Chinese manufactures, almost as a baseline for further research will not look specifically at any one marketing strategy each of the above mentioned strategies use customer satisfaction as a core factor in development and therefore require mention. This research fills the gap of previous literatures, as it could provide an in-depth understanding of customer satisfaction by using qualitative research method. Also this study chooses manufacturers as sample, which could enable comparisons with the findings from services organization studies. Also, China is the largest exporter in the world, and Chinese manufacturers are very important to Chinese economy. Chinese manufactures are looking for better ways to operate and improve their performance. The use of customer satisfaction as a performance measure might be a way to improve performance but only if research is clearly developed that both defines and establishes a baseline of importance regarding customer satisfaction as an important performance measure. Though this work is specifically looking at customer satisfaction as a performance measure the balance between customer satisfaction and other measures like, employee satisfaction and therefore the ability to act in the best interest of the organization is also key as they are partners in production as well as sales. This work will as mentioned above be a qualitative study, and the method used will be semi-structured interviews of 2 or 3 Chinese manufacturers. Some studies have been conducted in China that address customer satisfaction in a qualitative manner for instance in Deng, Lu, Kee Wei, & Zhang, (2010) customer satisfaction is discussed in a Chinese context within a technology service industry, finding that few providers in China focus on customer loyalty/satisfaction as a factor for marketing development. This researcher found no research examples of a qualitative study focused on customer satisfaction in the manufacturing sector.

The basis for the interviews in this work will be these four questions, formed from reviewing the literature on the subject and the specific lack of Chinese-based research:. 1. How do you know whether your customers are satisfied or not? 2. Who uses the measures and what for? 3. Is customer satisfaction used to evaluation employees' performance? If so whose and how is it used to evaluate? 4. What effect do you think customer satisfaction has on the business?

References

Abdel-Maksoud, A.B. Abdel-Kader, M. & Epstein, M.J. (2007) Non- Financial Performance Measurement and Management Practices in Manufacturing Firms. New York, NY JAI Press Inc.

Anderson, E.W. Fornell, C., & Lehmann, D.R. (Jul 1994) Customer Satisfaction, Market Share, and Profitability: Findings from Sweden. Journal of Marketing. 58 (3) 53-66.

Banker, R.D., Potter, G.S. And Srinivasan, D. (December 1997) An Empirical Investigation of an Incentive Plan Based on Nonfinancial Performance Measures" http://ssrn.com/abstract=67808 or DOI: 10.2139/ssrn.67808

Chenhall, R.H., & Langfield-Smith, K.L., (2007) Multiple Perspectives of Performance Measures. European Management Journal. 25(4) 266 -- 282. doi:10.1016/j.emj.2007.06.001

Deng, Z., Lu, Y., Kee Wei, K., Zhang, J. (Aug 2010) Understanding customer satisfaction and loyalty: An empirical study of mobile instant messages in China, International Journal of Information Management, 30 (4) 289-300.

Ferreiraa, A., Otley D. (2009) The design and use of performance management systems: An extended framework for analysis. Management Accounting Research. 20, 263 -- 282.

Fornell C. (Jan, 1992) A National Customer Satisfaction Barometer: The Swedish Experience. Journal of Marketing. 56 (1) 6-21.

Franco-Santos, M., Lucianetti,, L., & Bourne M., (2012) Contemporary performance measurement systems: A review of their consequences and a framework for research. Management Accounting. Research. http://dx.doi.org/10.1016/j.mar.2012.04.001

Heskett, J.L., T.O. Jones, G.W. Loveman, W.E. Sasser, Jr., and L. Schlesinger. (1994) Putting the service-profit chain to work. Harvard Business Review 72 (2): 164-174.

Ittner, C.D. & . Larcker, D.F. (1999) Are Nonfinancial Measures Leading Indicators of Financial Performance? An Analysis of Customer Satisfaction. Journal of Accounting Research. (36), 1-35.

Jones, T.O., and W.E. Sasser, Jr. (November-December, 1995) Why satisfied customers defect. Harvard Business Review. 88-99.

Kaplan, R.S., and D.P. Norton. (January-February, 1992) The Balanced Scorecard -- Measures that drive performance. Harvard Business Review. 71-79.

-- . (1996) The Balanced Scorecard; Translating Strategy Into Action. Boston, MA: Harvard Business School Press.

-- . (2001) The Strategy-Focused Organization. Boston, MA: Harvard Business School Press.

Lovelock, C., Wirtz, J. (2004), Services Marketing, 5th ed., Pearson- Prentice Hall, Upper Saddle River, NJ.

Lusk, E.J., Halperin, M., Zhang B. (2006) The Balanced Scorecard: Suggestions for Rebalancing. Problems and Perspectives in Management. 4 (2) 100-114.

Luthans, F., & Kessler, D. (1993). Meeting the New Paradigm Challenges through Total Quality Management. Management Quarterly, 34(1), 2.

McLellan, J.D. Moustafa, E. (2008) An Exploratory Analysis of the Importance of Management Accounting Tools in the GCC Countries. Journal of Economic and Administrative Sciences, 24(2), 54 -- 77.

Reichheld, F.F. (March-April, 1993) Loyalty-based management. Harvard Business Review. 64-73.

-- . (July-August, 2001) Lead for loyalty. Harvard Business Review. 76-85.

Said, A.A. Hassab Elnaby, H.R. Wier, B. (Jan 2003) An empirical investigation of the performance consequences of nonfinancial measures. Journal of Management Accounting Research. 15, 193-224.

Seroka, P.H. (Feb 2000) Keeping the customer for life. Mortgage Banking. 60(5) 42-49.

Smith, R.E.,… [END OF PREVIEW]

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Customer Satisfaction.  (2012, May 31).  Retrieved February 18, 2019, from https://www.essaytown.com/subjects/paper/customer-satisfaction-kind/1861330

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