10120130406017

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
INTERNATIONAL JOURNAL OF MANAGEMENT (IJM)
Volume 4, Issue 6, November - December (2013)
ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)
Volume 4, Issue 6, November - December (2013), pp. 145-152
© IAEME: www.iaeme.com/ijm.asp
Journal Impact Factor (2013): 6.9071 (Calculated by GISI)
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IJM
©IAEME

CUSTOMER SATISFACTION AND LOYALTY IN AFTER SALE SERVICE
Dr. S.H.Sawant1
1

Associate Professor, Mechanical Engg. Dept, Dr.J.J.Magdum College of Engineering,
Jaysingpur, Kolhapur, India

ABSTRACT
To be successful, organizations must look into the needs and wants of their customers.
Customer satisfaction is important because many researchers have shown that customer satisfaction
has a positive effect on organization’s profitability. Not only the product theypurchase can satisfy
customers, but also by the service they got from the organization. The main objective of this study is
to asses either after sale services that are offered to customers just after the sales stage have an effect
on customer satisfaction and loyalty in the automotive industry.In order to carry out this study, data
from 120after sale service customers were collected through questionnaire. The techniques of
analysis used in this study are descriptive and inferential.Customer satisfaction index is used to
measure and quantify the relationships between customer satisfaction and customerrequirements.
Results indicate that discovered after sale serviceshaseffect on customer satisfaction andloyalty, and
after sale service satisfaction and loyaltyhas positive relationship. In addition to this different
companies provide same after sale service in different way, and the way they offerthe service for
their customer has a significant difference on the satisfaction of customers.
Keywords: After Sale Service, Customer Satisfaction, Customer Loyalty, Descriptive Analysis
Inferential Analysis.
INTRODUCTION
Undoubtedly the customer has become the King. An organization should revolve around the
customer, because customers are the key to any business. Any customer should be valued and treated
like a friend. Responses to customer complaints should be immediate and should be more than the
customer expected to receive. Employees must understand that, as Henry Ford said, “It is not the
employer who pays wages – he only handles the money, it is the customer who pays the wages”
Employees must please customers, not bosses, management committees or headquarters.

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Much of literature dealing with marketing and management issues recognizes the importance
of customer satisfaction for business. However, according to Lele, research in marketing has
concentrated more on discussing how to increase customer sales rather than how to satisfy and create
loyal customers. In businesses where services are part of the business, the services are visible to the
customer. Therefore, it would be quite natural that such services would have a major impact on the
customer satisfaction.
The main objective of this research is an increased understanding of how a supplier can
successfully manage its care business in two wheeler market.
CUSTOMER SATISFACTION AND LOYALTY
Customer satisfaction means that the customer's needs are met, product and services are
satisfactory, and customers’ experience is positive. According to the definition, customer is satisfied
when only minimum has been done for the customer. If a customer is said to be satisfied or happy
about a purchase, the customer's overall feeling and experiences must be neutral or positive.
Customer satisfaction itself is not an indication that there will be customer retention. A loyal
customer is a customer whose expectations are met or exceeded and they proactively refer the
supplier. The nature of loyalty has changed over time in society; nowadays it is based on mutually
earned loyalty by the continued delivery of superior value to the customer. Customer loyalty can be
measured and analyzed to minimize customer turnover and to increase the growth of key accounts.
Griffin defined a loyal customer as a customer who regularly repeats purchases, purchases across
product and service lines, has some level of immunity to competitors, and refers to others.
Kaplan and Norton propose that managers should have a clear idea of their targeted
customers and a specific set of core outcome measurements such as customer satisfaction, retention,
and profitability. Customer satisfaction measurements have frequently yielded results suggesting that
the relationship between customer satisfaction and customer loyalty is not constant. Hallowell states
that the relationship among customer satisfaction, customer loyalty, and profitability warrants further
research. According to Ruyter and Bloemer, the relationship between loyalty and satisfaction has
remained equivocal. This may be even truer for services that are delivered over longer periods.
Olivaetal.argue that the relationship between service satisfaction and customer loyalty is non-linear.
Anderson and Mittal argue that the links between customer satisfaction and customer retention can
have asymmetric and non-linear. Heskett et al. propose that job satisfaction and customer satisfaction
are closely related. Furthermore, Heskett et al.claim that there is direct and strong relationship
between profit, growth, customer loyalty, customer satisfaction, value of the goods and services
delivered to customers, and employee capability, satisfaction, loyalty, and productivity. Oliver also
states that quality, satisfaction, and loyalty have an impact on profits. Ruyter and Bloemer in their
attempt to extend knowledge about loyalty in services by including value attainment as a factor,
argue that, in cases of relatively high levels of satisfaction, satisfaction would be the most important
determinant of customer loyalty. However, in cases of extended service encounters, it may not
always be possible to attain high levels of satisfaction.
PRODUCT SUPPORT AND AFTER MARKET SERVICES
It is important that product based industries must provide a service bundle to their customers.
Manufactures of equipment – small appliances, office machines, tractors, mainframes, airplanes – all
have to provide the buyers with product support services. In fact, product support service is
becoming major battleground for competitive advantage.
Firms that provide high quality service will undoubtfully outperform their less service –
oriented competitors. The company must define customer needs carefully in designing both the
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product and the product support system. Customers are most concerned about an interruption of the
service that they expect from the product. They have three specific worries.
1. First, they worry about reliability and failure frequency, how often the product is likely to break
down in a given period.
2. Second, customers worry about downtime duration. The longer the downtime, the higher the
cost, especially if a crew cannot work when the product is idle.
3. Third, customers worry about out of pocket of maintenance and repair service.
An intelligent buyer takes all of these factors into considerations in choosing a vendor. The
buyer wants to estimate the offer’s expected life style cost, which is the product’s purchase cost plus
the discounted cost of maintenance and repair less the discounted salvage value. Buyers have right to
ask for hard data in choosing among vendors.
The importance of reliability, service dependability, and maintenance vary among different
products and product users. A one – computer office will need higher product reliability and faster
repair service than an office where there are other computers available if one breaks down.
To provide the best support, a manufacturer must identify the service that customers value
most and their relative importance. In the case of expensive equipment, such as medical imaging
equipments, manufacturer offer facilitative services such as equipment installation, staff training,
maintenance, repair services, and financing. They may also add value augmenting services.
Companies need to plan their product design and service – mix decisions in tandem. Design
and quality – assurance managers should be part of the new - product development team. Good
product design will reduce the amount of subsequent servicing needed.
At the time of sale, the buyer and seller have different kind of expectations. For the seller, the
sale is a culmination of a long sales negotiation; it is time to collect monetary reward for the labours.
Sales closure opens new opportunities with new potential customers and matters shift from the sales
team to the production team. From the buyer’s point of view, a sale is an initiation of a new
relationship; the buyer is frequently concerned about support and the attention it will get wishes to
continue to interact with the sales team.
According to Wellemin, after sales support has changed drastically in recent decades.
Customers have become more dependent on efficient operation of suppliers’ equipment, services are
labour intensive and cost of labour has risen, products intended for the same markets are becoming
more similar, customers are increasingly selective as they seek value for money, and social changes
have reflected to services, for example when a service force works in the customer’s premises, the
supervision is frequently minimal.
The product-service package must be defined so that it maintains costs at a level acceptable
to the market. It is necessary to develop economic analysis that enables estimates of life-cycle costs.
In the USA, the concept of life-cycle costs has become relatively widespread in many industries.
The relative importance of a product's material content decreases and the same applies to the
manufacturing added value. For objects that are consumed, the share of logistical costs, including all
the services provided at various stages such as transportation, maintenance, inventory, and planning
has been growing. At the same time, supporting the tangible product has become more expensive to
the supplier and to the customer. The initial purchase price represents only one element in the
customer's total cost. Particularly for durable products, delivery and usage costs including
maintenance represent a significant part of the total-cost price for the customer.
After sales service is more than merely fixing what has gone wrong, which appears to be the
primary function of many after sales service functions? Manufacturers should anticipate the after
sales needs in product design, but experience shows that manufacturers do not incorporate
customers’ concerns actively enough at the product design phase. In the case of durable goods, at
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least customer, dealer, third party provider of service, the manufacturer of the tangible product, and
the supplier of parts and components can be involved in the after sales service operations. The
traditional approach to after sales service centres is on technical intervention, where the focus is on
improving technical tools and work methods. The approach of Mathe and Shapiro looks for
increased overall efficiency between the supplier and customer. Service activities are defined at the
design phase.
After sales service may not be profitable on its own, but is frequently a key determinant in the
sale of the product itself. It has been estimated that the importance of services will grow in the future.
Product support can be a basis for developing a close relationship between a supplier and its
customers. For example, among the criteria in the purchase of computers by small and medium size
companies, after sales service (maintenance) had the strongest influence on customer behavior. After
sales service was followed close by the equipment itself. Difficulties related to a relationship
between a supplier and its customer can be reduced by offering services that complement the
product.
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
Data Presentation
The customer satisfaction indexes(CSI’s) of individual customers is obtained by the
following formula using Excel Software as

CSI =

1 r
∑ (csi) i
r i =1

Where,
r = Total number of customers responded in a year
(csi)i = Customer satisfaction index of individual customer
Data Interpretation
The values of percentage average weightages corresponding to quality parameter number
were entered in Table 1 and the graph for the same is plotted as shown in Fig 1.The values of
percentage evaluation corresponding to quality parameter number were entered in Table 2 and the
graph for the same is plotted as shown in Fig 2.The values of average csi( In the scale of 1 to 1000)
corresponding to Month of the financial year 2012 were entered in Table 3 and the graph for the
same is plotted as shown in Fig 3.
Table 1: Percentage Average Weightages Corresponding to Quality Parameter Number
Quality
Percentage
Quality parameter
Percentage
parameter No. Average Weight
No.
Average Weight
n1
93
n11
48.45
n2
91. 5
n12
42
n3
87
n13
38.5
n4
79.5
n14
31.45
n5
77.5
n15
27.4
n6
75.5
n16
22.9
n7
67
n17
17.5
n8
63.5
n18
13.5
n9
58.5
n19
8.5
n10
53
n20
4.0
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Percentage Average Weight

100
90
80
70
60
50
40
30
20
10
0
n3

n4

n5

n6

n7

n8

n9

n10

n11

n12

n13

n14

n15

n16

n17

n18

n19

n20

Quality Parameter Number

Fig.1: Percentage Average Weightages Corresponding to Quality Parameter Number
Table 2: Percentage Evaluation Corresponding to Quality Parameter Number
Quality
Percentage
Quality Parameter
Percentage
Parameter No.
Evaluation
No.
Evaluation
n1
82.8
n11
86
n2
64
n12
84
n3
63.6
n13
64
n4
66
n14
92
n5
94
n15
96
n6
82
n16
94
n7
83.2
n17
96
n8
96
n18
62
n9
84.8
n19
60
n10
98
n20
54

Percentage Evaluation

120
100
80
60
40
20
0
n1 n2

n3 n4

n5 n6

n7 n8

n9 n10 n11 n12 n13 n14 n15 n16 n17 n18 n19 n20

Quality Parameter Number

Fig 2: Percentage Evaluation Corresponding to Quality Parameter Number
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Table 3: Average csiCorresponding to Month
Average csi
Month
Average csi
790.5
July
795.8
810.8
August
782.9
809.7
September
789.6
818.3
October
817.5
821.2
November
811.1
815.5
December
810.4

Month
January
February
March
April
May
June

830
820

Average csi

810
800
790
780
770
760
January

February

M arch

April

M ay

June

July

August

Sept ember

Oct ober

November December

Month

Fig 3: Average csiCorresponding to Month
DataAnalysis
The analysis of the data collected from 120 customers responded with reference to each
quality parameter was analyzed. The findings observed in the analysis of quality parameter 1 are as
shown below.
Q.P.1 (n1) How will you assess the services provided by our workshop?

Sr. No.
1.
2.
3.
4.
5.

Opinion

Evaluation

Over Satisfied
Fully Satisfied
Satisfied
Satisfied Partly
Not Satisfied

05
04
03
02
01

Number of Customer Responded
Percentage
% 120
45
37.50
47
39.16
28
23.33
00
00
00
00

150


Graphical Representation

Interpretation
As per as overall evaluation or assessment of the services provided by the workshop is
concerned. 37.50% of the respondents were over satisfied. 39.16% of the respondents were fully
satisfied . 23.33% of the respondents were satisfied upto the mark i.e. the workshop was succeed in
fulfilling their requirement. Though not a single respondent has quoted his opinion that he was not
satisfied or partly satisfied. But as weightage or importance of this quality parameter is 18.6. the
workshop of the organization should try to over satisfy the customers in order to improve their CSI.
OBSERVATIONS
1.
2.

3.
4.
5.

6.

Due to large number of customers selected for feedback, the average weight of the nearest
item can come so nearer or far away from each other.
As the weightages for the items were allotted by the customers, they give more attention on
the items having higher weightages and less attention on the items having lower weightages.
Therefore the feedback obtained is more correct that means e.g. if certain customer unlikely
gives C value for all the items of common feedback form though he allot average marks for
the items having less weightage, there will be no much variation in the feedback
Feedback with keen interest by some customers that may be because of somebody is coming
to them for information
Lot of time available with customers as feedback was taken by attempting them. Therefore
they will give exact feedback with keen interest.
The feedback is taken from the person who is not connected with the organization from which
service was taken, therefore there is no fear in mind of the customer that they have to divert
towards organization by allotting large values, which may happen at the time of common
feedback. So the feedback obtained is more correct.
As C.S.I. survey sheet is required to collect from well educated customers, the analysis made
by them will be more correct and which surely leads to correct CSI.

151


CONCLUSION
1. As the weightages of the items are obtained from customers, organization can be in position to
give more attention to make the fulfillment in the items having less weightages in order to
improve overall CSI.
2. This analysis gives an idea about which item is having less c value according to that the
modification can be suggested.
REFERENCES
A. Journal papers
1. Customer Satisfaction and Loyalty in After Sales Services. Modes of care in
Telecommunication Systems. Delivery -HeikklKoskela Hut Industrial Management and
Work and Organizational Psychology, Report No. 21, Espoo 2002.
2. After Sales Service in Durable Consumer Goods the Case of Italian Industry - Sergio
Cavalieri, University of Bergamo, and Department of Ind.Engg. ASAP Project National
Coordinator.
B. Theses
3. With Our Customers - FY 2005 Performance Report.
4. Gearing to Go-Future Trends in Indian Automobile Market - VivekVaidya.
C. Books
5. Total Quality Management - Dale H. Besterfield - Carol Besterfield – Michna - Glen H.
Besterfield, MaryBesterfield – Sacre Pearson Education.
6. Marketing Management - Philip Kotler– Kevin Lane Keller Prentice - Hall of India Private
Limited.
D. Proceeding Papers
7. After Sales Service is key in providing Heavy Duty Truck Satisfaction in Japan.- J. D.
Power ,Asia Pacific Reports .
8. Maruti Suzuki Ranks Highest in India Customer Satisfaction study for a Sixth Consecutive
Year,- J. D. Power Asia Pacific Reports .
9. A Quarterly Report by J. D. Power and Associates- Munich, Germany Office Wiater 2005
/ 2006.

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