Theoretical and Conceptual Framework

[Link] Performance Model Based on the Performance Model (Spreng and Mackey,
1996). The performance model posits that a customer’s perception of a product or
service performance, and their expectations of that performance have a positive effect
on customer satisfaction. Performance is the level of quality of the product, or service,
as perceived by the customer, relative to the price paid.

2. Customer Satisfaction According to Oliver (1997) customer satisfaction is the

core philosophy of marketing strategy of any organisation and plays a key role in an
organisation’s success and Kotler (2000) believes that satisfaction is the overall
customer attitude or behaviour towards the difference between what customers expect
and what they receive, regarding fulfilment of a goal. Kapiki (2012) observed that
excellent services quality by companies’ results in excellent customer satisfaction and
loyalty. Customer satisfaction has been given different definitions by many gurus in
the area of marketing. Zethaml and Bitner (2000) in their service marketing approach
define customer satisfaction as the customer evaluation of a product or service in
terms of whether that product or service has met their needs and expectations. Bagram
and Khan (2012) also see satisfaction as features or characteristics that can fill a need
or want of a consumer in a better way than competitors and that satisfied customers
are more likely to share their experiences with other five or six people around them.
Sherry (2003) believes that communications from faculty that directly engages
students and offers timely feedback contributes to interchanges between the
organisation and students and leads to success in the course of study. Anderson (1994)
concludes that customer satisfaction is the key factor used to measure the company’s
internal and external performances and assigning funds to each and every activity
within the organisation. Anderson (1994) further asserts that the importance of
customer satisfaction cannot be dismissed because happy customers are like free
advertisers. Anton (1996) also states that customer satisfaction is positively associated
with repurchase retentions and that there is a likelihood of recommending a product or
service to others. These views bring to bear that when customers are satisfied, they
will spread positive word of mouth communications to help a company strengthen its
competitive position. Sivadas and Baker-Prewitt (2000) further maintained that
customer satisfaction influences the likelihood of recommending a company and its
good or service as well as repurchases. Wood (2008) adds that if value is present for
both organisation and consumer, the resulting relationship may take the form of a one-
time purchase and referrals to other potential customers. Thus, effective marketing
covers everything about an organisation and must consistently provide value to win
customers and earn their loyalty (Wood, 2008). Bowen and Chen (2001) opined that a
high level of customer satisfaction decrease the perceived need to switch service
provider, and increase customer repurchase and ultimately enhancing profitability of
the organization. Evans and Lindsay (1996) emphasised that companies with satisfied
customers have a good opportunity to convert them into loyal customers who
purchases from those firms over an extended time period.

3. Customer Satisfaction and Competitive Position In keeping with the identified

literature, customer satisfaction and maintenance of a company’s position was
investigated. Fornell (1992) emphasised that increased customer satisfaction can lead
a company to a sustainable competitive position in the marketplace. Over the decades,
a number of studies have been conducted to identify the key drivers of customer
satisfaction (Chavan & Ahmad, 2013; Singh & Kaur, 2011; Anderson et al., 2008;
Johnson & Fornell, 1991). According to Schulz (2012) retaining loyal customers is
very essential and a key factor in keeping the industry running and more competitive
to measure a company’s performance in changing trends of the industry. Today,
customer satisfaction has been regarded as a fundamental determinant in maintaining
longterm customer relationship behaviors (Zeithaml, Berry, & Parasuraman, 1996;
Anthanassopoulos, Gounaris, & Sathakopoulos, 2001). A study by Walsh et al. (2006)
revealed a strongly relationship between customer satisfaction and corporate
reputation. Zeithaml (2000) findings prove a relationship between customer
satisfaction and business performance. Hennig-Thurau et al. (2002) in their discussion
of customer satisfaction proved that customers who are satisfied with the performance
of a company, are likely to give positive word-of-mouth communication about the
company and enhances company’s reputation. Oliva et al. (1992) provided evidence
to show that customer satisfaction enhances financial performance of a company.
Study by Cronin and Morris (1989) and Innis and La Londe (1994) found that a
satisfied customer is more likely to repurchase, which leads to increased sales and
market share. Increase in sales and market share are key in solidifying a company’s
position in the marketplace. Nelson et al. (1992) found positive evidence on the direct
relationship between customer satisfaction and business performance which leads to a
higher profitability. Chavan and Ahmad (2013) concluded that customer satisfaction
has been shown to have effects on organizations’ revenues and the underlining factor
is because satisfied customers tend to purchase the service again which in the long-
run leads to increased profits and maintenance of the company’s position in the
industry.

4. Marketing Strategy A strategy is a unique battle plan that one company uses to
outwit its close competitor. Marketing strategy according to Walker, Boyd and
Larréché (1996) involve specifying the target segments to be pursued and the breadth
of product line to offer. Hence, for customers to be satisfied, effective marketing
strategies that deals with the process of planning and executing programmes designed
to influence the behavior of target audiences by creating and maintaining beneficial
exchanges for the purpose of satisfying individual and organisational objectives
(Andreasen and Kotler, 2003).

5. The use of Packaging as a Strategy To influence decision of consumers on the

type of product or service to choose, there is the need to differentiate parallel products
or services. Wells, Farley and Armstrong (2007) opine that packaging works as an
instrument for differentiation, and help consumers to decide the product from wide
range of parallel products and packaging also stimulates customer’s buying
behaviour. Adelina and Morgan (2007) see packaging as one of the most valuable
tools in today’s marketing communications and that packaging has an important
impact on consumers buying behavior. Saeed, Lodhi, Mukhtar, Hussain, Mahmood
and Ahmad (2011) conclude that organisations should integrate the brand image,
brand attachment and environmental effects to have impact on consumer purchase
decision.

6. The use of Social Bonding as a Strategy According to Mylonakis (2009) to

understand the relationship between customers and organisation, managers should
understand more their customers in terms of needs, behaviour, satisfaction and
perception towards the services and products and consider customers as important
assets to them. In the words of Chiu (2002) social bonds positively influence
customer’s emotions toward or feelings associated with service experience and
contribute to the formation of an effective component of attitude. From the view point
of the customer, the social bonding strategy seems to provide an important
psychological benefit (Chiu, 2002). Social bonds dispose customers to self-disclosure,
listening and caring, which in turn improve the mutual understanding between the
customer and the service provider, their openness and their degree of closeness.
Damkuviene and Virvilaite (2007) also noted that the elements in relationship should
be interdependence, long term orientation, commitment and trust. Hence, without
these elements in the marketing game, it will be difficult for the university to build a
strong customer base in the distance education market. According to Kandampully
and Duffy (1999) a customer’s interest in maintaining a loyal relationship is depended
on the organisation’s ability to anticipate customers’ future needs and offering them
before anyone else does. 2.4.3. The use of Price as a Strategy Price is considered to be
the most significant factor that affects consumer’s choice (Kotler, Armstrong,
Saunders, & Wong, 2002). Kotler et al. (2002) further believe that in Customer-Value
Based Pricing, products or services are priced on the basis of perceived value and that
company’s must find out what value customers assign to competitors’ products or
services as well as the value they perceive of their own company’s products or
services. Therefore, if price is charged higher than the perceived value, it will have a
negative impact on the company’s products or services (Kotler et al, 2002). Oliver
(1997) believes that customers perceive price in line with the quality and if price does
not match quality of products or services, customers will experience dissatisfaction.
Thus, price is used to judge parallel products or services that offer similar satisfaction.
2.4.4. The use of Service Quality as a Strategy Quality service stems from a host of
activities within and outside an organisation. Levesque and McDougall (1996)
mention that performance of the service provider on core and relational dimension of
service quality is an important driver for customer satisfaction. Bolton and Drew
(1992) believe that customer satisfaction depends heavily on service quality.
According to Moore (1989) and Young and Norgard (2006) there are three types of
interactions that increases students’ satisfaction of quality of distance education:
Student-content; student-instructor; and student-student interaction. The authors
contend that these three types of interactions help promote timely and quality
interaction among students, between student and their instructor, as well as between
students and their course content which serves a motivational tool for students’
satisfaction. Durling, Cross and Johnson (1996) also echo that instructors should
understand the diverse nature of students and encourage them to interact regularly to
promote effective learning. Kurtenbach (2000) concludes that organizations which are
successful in customer service rank their customers experience as their top priority

Figure 1

The study provided a framework which served as the basis for the questionnaires
developed in order to collect relevant data for this study. The framework assumes that
in order to understand how the effects of marketing strategies towards customers
satisfaction, one needs to understand the marketing strategies that leads to customers’
satisfaction and eventually results in building a strong bond between customers and
marketers.