Piercy Morgan JMM 1995

8/13/2019 Piercy Morgan JMM 1995

1/33

Journal of Marketing Management, 1995, 11, 817-834

Nigel F. Piercy^ and

Customer Satisfaction

Neil A. Morgan^

Measurement and^ Cardiff Business School, Management: A Processualand University of

Analysis

Cambridge, UK

Customer satisfaction (CS) measurement has been widely advocatedas central to the pursuit of market orientation, total quaUtymanagement, and competitive advantage by allowing management tomonitor and improve performance in the terms most significant tocustomers. However, relatively little analytical attention has beendevoted to the processual issues implicit in the adoption of CSmeasurement systems by organizations. This paper presentsexecutive workshop data and new survey evidence to support the

contention that both research and managerial agenda should beextended to recognize the multi-dimensionality of organizationalprocess, and the implications of that charatteristicfor the adoption anduse of CS measurement systems.

Introduction

The achievement of market orientadon by organizadons remains one of the basictenets of the conventioneil prescripdve Uterature (e.g. Koder 1994), and has providedthe focus for infiuendal recent enquiries and conceptual developments (KohU andJaworski 1990; Narver and Slater 1990). This concem is emphasized by thedevelopment of reladonship marketing strategies (e.g. McKenna 1991; Christopher

et al. 1992) and the move away from whoUy transacdon-based markedng (Webster1992). To varying degrees of expUdtness, such prescripdve and analytical treatmentsof market orientadon and reladonship marketing share a focus on customersatisfacdon as a central component of marketing effecdveness and corporateperformance. Similarly, memy of the daims for the advantage derivable from Total QuaUty Management rest on achieving a focus on customer sadsfacdon (e.g. Crosby1979; Garvin 1988; Morgan and Piercy 1995). Indeed, customer sadsfacdon focus is also central to many general management writers (e.g. E>rucker 1958; Day 1990;Johnson and Scholes 1992) as weU as the "exceUence" school (e.g. Peters andWaterman 1982; Peters and Austin 1985), and those studying the formation of

networked marketing organizadons and strategic aUiances (Webster 1992; Piercyand Cravens 1995).

One famiUar manifestadon of this widespread concem with customer satisfacdonas a test of market orientadon and organizadonal effecdveness has been thewidespread advocacy of customer satisfacdon measurement (CSM) systems, leadingto the capture and dissemination of such measurements as a basis for marketingcontrol (e.g. Bearden and Teal 1983; Band 1988). Such views are commonly found inboth the techniccd normadve Uterature and the popular management prescriptions


2/33

(e.g. Peters and Austin 1985; Peters 1988), and convendonal logic suggests that0267-257X/95/080817 + 18 $12.00/0 1995 The Dryden Press


3/33

Nigel F. Piercy and Neil A. Morgan

compeddve advantage is attainable through such management efforts to insdtudon

aUze meirket orientadon (e.g. Day 1990).

Correspondingly, a large amount of technical and analytical effort has been

devoted to such issues as: conceptualizing different customer sadsfacdon constmcts

(Churchill and Suprenant 1982; Tse and Wilton 1988; Griffin and Hauser 1992);

designing effective customer sadsfacdon data collecdon systems (VWlson and

Nicosia 1986; McQuance and Mclntyre 1992); insdtudonalizing the customer

satisfacdon measurement process (Lele and Sheth 1988; Powell 1988); and, analysing

and respionding to customer dissatisfaction and complaining behaviour (e.g. Richins

1983, 1987).

However, very Uttle attention has been given to the actual or potendal impad of

CSM systems on the orgardzadon itself, other than the largely untested asserdonthat

the "happy employee" leads to the "happy customer" (e.g. Berry 1981; Gale 1992).

This asserdon negleds, in particular, the possibiUty that a trade-off exists between

employee and customer interests, and that CSM may itself have adverse effeds on

the "corporate environment" (Piercy 1985), or the "intemal market" represented by

the orgardzadon itself (Piercy 1992, 1995).

In short, there appears generally to have been Uttle recognidon of the impad ofthe

processual charaderisdcs and structural issues surrounding the implementadon and

utilization of CMS approaches. It is certainly true that attention has been paid to the

implementation of CSM systems themselves, but a processual analysis suggests that

the more apposite issue is the ptosidve, negadve, or ambivalent impad of CSM on

the implementadon of market orientation and market strategies, rather than the


4/33

implementadon of CSM systems as such.

This paper discusses some exploratory evidence from management workshops,and the processual analytic model currently being evaluated in survey and casestudy research into CSM systems and other aspeds of marketing control. Somesurvey findings are presented, examining the managerial use of CS measurements,their impad on market strategy, and the intervening effed of intemal processualbarriers. The findings presented have a number of impUcadons for both management practice and for further research in this area.

Exploratory Evidence

One preliminary source of insight into the CSM issue has been discussions heldinformally with a variety of executive groups in workshops and similar venues. This"grounded" approach to generating theory (Glaser and Strauss 1967) has been afruitful stage in the research process in other areas of market orientadon research

(e.g. KohU and Jaworski 1990). The approach also has attracdon in terms of thecontinuing "relevancy" debate among marketing academics and practidoners.These exploratory discussions suggested a number of areas for further investigad

on,linked by a focus on the process of CSM and its use by management, rather thanon purely technical issues of measurement and data coUection.

ITie execudve views have been grouped around a number of themes concernedwith the reasons why CSM is not used in some organizations, and the problems withCSM in those organizations where attempts have been made to implement such


5/33

Consumer Satisjaction Measurement and Management

systems. Prime among the areas uncovered by the exploratory discussions withexecudves were the following:

Companies Who Do Not Measure Customer Satisfaction

Many execudve comments related to the pracdcal problems of customer identificadon,sadsfacdon construct definidon, emd data coUecdon. Others related to a lack ofconvicdon that CSM would add anything useful to exisdng knowledge of customersand a beUef that CSM would itself sdmiilate customer complaints where there were none before. Yet others saw CSM as simply "not how we run things in thiscompany".

Companies Who Trivialize CSM

Many execudves in companies pursuing CSM poUdes describe this as a superfidalor tacdcal issue, sigruficant only at the customer service level in "massaging"customers and deaUng with complaints. The suggestion is that CSM forms no partof developing market sfrategies, only in monitoring customer service op>eradons,

and responding (sometimes quite dispropwrdonately and inappropriately) tonegadve feedback.

CSM in Interdepartmental Power Struggles

Some execudves describe CSM as a weapon used in the power struggles betweenfuncdonal areas, in attempts to "prove" to management the inadequades ofothers for example, in the "battle" between Marketing and Opieradons.

The Politics of CSM

Others describe the gaming behaviour of company persormel to "beat" the system,and to avoid being "blamed" for customer complaints, in ways not anddpated by

management, and certainly not suppmrdve to customer sadsfacdon poUdes andmarkedng sfrategies for example, sales and distribudon pwrsonnel making priceand service discount concessions to customers simply to win "brownie p>oints" in theCS quesdonnaire.

CSM as a Management Weapon

Some saw CSM in a whoHy negadve way as a crude control device with coerdveovertones, used by management to "poUce" lower levels of the organizadon forexample, to "blame" p>oint-of-sale op)eradves for low customer satisfacdon.


6/33


The Isolation of CSM

It was not uncommon for CSM output to be coUeded and stored, but notdisseminated through the organization for example, evidenced in one companyby CS data being held by Marketing and not shared with the QuaUtyDepartment.

Poorly Diffused CSM

Some described situations of internal discord, where the perception of CSM and itsgocds and effectiveness differed radicaUy between different parts of the organization for example, shown in one company by distributors completing CSquestionnaires themselves, because they did not see the point of the exerdse and didnot want to "bother" end-user customers.

It is clearly not sensible to suggest any general representativeness or vaUdityforsuch exploratory discussions with executives, for many obvious reasons. Nonethel

ess,there is some suggestion of dysfunction in the adoption and utilization of CSMwhich does not simply reflect diredly the technical robustness and sophistication ofthe measurement systems themselves.

A Processuai Analysis of CSM

Further analysis of this issue adopts the simplified model of process developedinearUer studies of marketing planning (Piercy and Morgan 1994) and resourceaUocation in marketing (Piercy 1987fl, 1987b, 1994). This model is summarized in

Figure 1 and proposes that process should be studied as a multi-dimensionalphenomenon, recogni2ung an analytical dimension of technique, procedure andsystem, but also a behavioural dimension concemed with attitudes, perceptions andmotivation of the jDeople involved, and an organizational dimension concemed withmanagement styles, corporate culture, stmcture and information fiows, i.e. thecontext in which the formal system operates. The underlying proposal is that greaterinsight into the operation of process is achieved through making expUdt thesedifferent aspeds of a process, and the largely ignored question of the consistencybetween them.

This logic leads to the model of CSM shown in Figure 2. The logic is that instudying the adoption of CSM, in pursuit of market orientation and customer-basedmarket strategies, the researdi and managerial agenda should extend beyond theanalytical/technical dimension of the process and uncover the behavioural andorganizational dimensions of the process. The hypothesis is that barriers to the effectiveness of CSM may be traced not merely to operational and resource issues


7/33

but to managerial/poUtical questions and to cultural/structural barriers. Thesuggestion is that there are potentiaUy both positive and negative outcomes possiblewith CSM, with predictably positive or negative impacts on market strategy.

An exploratory study examines the existence and impad of such processualbarriers on the management use of CS measurements in dedsion-making andimplementing market strategies.


8/33

Consumer Satisfaction Measurement and Management

Exploratory Empirical Study

This paper reports certain findings of an exploratory survey completed in 1992,involving a postal questionnaire study of 300 medium and large UK manufacturingcompanies. The questionnaire items were generated from executive interviews andthe sampling units were chief marketing executives. The sample was generated ona systematic random sampling basis from a company directory. The questiormairewas sent to 925 companies and usable responses were obtained from 299 companies, giving a response rate of 32%. Reasons for non-response were investigated withtelephone interviewing to evaluate systematic differences between responding and non-responding companies. This testing suggested that the sample was biasedtowards those organizations which measured CS, since many companies notmeasuring CS were unwilling to partidpate in the study. The results below aredrawn from the 200 responding companies which did measure CS.

The hypotheses evaluated here are drawn from the model in Figure 2, and areconcerned with the use of CS measurements in management dedsion-making andthe relationship with market strategies, in the light of the intervening process

characteristics which prevail.The logic of the various streams of prescriptive literature reviewed earliersuggests that CS is measured so that it may impact on dedsions made by managers. As suggested in Figure 2, if CS measurements are to have any real impact, the uses

Analyticaldimension

* Tfechniques* Systems

* Procedures* FormalizationJ

Behavioural Process

dimension consistency

en!)

Attitudes Beliefs

* Participation ^

X X * Commitment ^< \ /)Or ganiz ational

mmension

Structure Management style Culture Information


9/33

Figure 1. A model for analysing process in marketing.


10/33

Nigei F. Piercy and Neil A. Morgan

CSM adoption/

implementation

Analytical

dimension

y,

1 Behavioural | . Organizational

'rocess issues

1 dimension ! ^ aimension

Process

ODiisistency i

Positive effects Negative effects

on market strategy on market strategy

Figure 2. Conceptual model of customer satisfaction measurement process.

of the data should be refieded in the market strategies pursued. It is

hypothesized:

HI: The use of CS measurement data will be related to key elements of marketstrategy pursued by the company.However, our exploratory interviews and the model in Figure 2, also suggests that

process barriers wiU intervene between the coUecdon of CS data and their use inmanagement dedsion-making, and hence their impad on market strategies. It ishypothesized:

H2: Intemal process barriers wiU be negadvely related to the use of CS data inmanagement dedsion-making and their impad on market strategy.

Managerial Uses of CS Measurements

Table 1 shows the list of management dedsion-making areas where respondentswere asked to evaluate the degree of use of CS data. These variables were fadoranalysed as shown to produce a fador structure suggesting use of CS data in:Quality/Operations Management, linking the use of CS data in morutoring quaUty a

nddeveloping quaUty strategy and setting quality goals, guiding R&D and managingproduction and quaUty control; Staff Pay and Promotion, Unking the pajTnent andpromotion of operational and managerial sta^ Staff Training and Evaluation, linkingthe training and evaluation of operational and managerial staff; and. StrategicManagement Control, Unking the development of company-wide strategy, control ofthe business, and the management of customer service and marketingprogrammes.


11/33


12/33


Market Strategy Components

Table 2 shows a Ust of market strategy items, again generated from the execudveinterviews, which was factor analysed to produce the foUowing structiire. TheService and Qi4ality factor linked goals of achieving the highest perceived quaUty inthe market, providing exceUent customer service and achieving high buyer loyalty.The Competitive Differentiation fador links issues of managing distribudon networks,building brand image and differendadon by design and specificadons. The HighProfit/Volume fador Unks gocds of sales growth, higher market share and improved profitability. The Low Price/Cost fador Unks strategic imperadves of being price compeddve and minimizing marketing costs.

Intemal Processual Barriers

Table 3 shows the question items relating to behavioural and organizadonal process

charaderisdcs, as generated in the execudve interviews. These were evaluated byrespondents In terms of the degree to which they were perceived to be problems inCS measurement. These items were fador analysed to produce the fador structurediscussed below.

The Intemal Politics, Market Simplification and Customer Fear fador grouped anumber of issues together. First, there is a group of variables describing various

Table 1. Factor analysis* of the managerial uses of customer satisfaction measurement

Varittblest Factors fTo what extent does the company usethe results of CS measurement inmaking decisions in the following areas: I 2 3 4V153 Monitoring quality performance 0-88 Usel=Quality/operationsV154 Developing our quedity strategy 0-85 managementV152 Setting quality goals 0-84V151 Managing quality control 0-82V155 Guiding R& D investments 0-64 0-34V150 Maruiging production 046 031V139 Payment of operational staff 086 Use2=Staff pay andV14fl Payment of managerial staff 085 promotionVI41 Promotion of operational staff 068 0-52

V142 Promotion of managerial staff 064 0-50V143 Training operational staff 0-79 Use3=Staff training andV144 Training managerial staff 074 evaluationV137 Evaluating performance ofoperational staff 0-64V138 Evaluating performance ofmanagerial staff 064V146 Developing company-wide strategy 0-87 Use4= StrategicV147 Developing marketing programmes 0-82 management controlV145 Controlling the business as a whole 064


13/33

V148 Managing customer service operations 0-50Eigenvalues 844 2-70 134 102Cumulative pe2x:entage ofvariance explained 444 586 657 710

'Vaiimax rotation, converging in eight iterations; tLoadings less than 0 3 are suppressed; Measured on i5-point scale where I="not used at all" and 5="the single most important input".


14/33


15/33

rep>eat sales do not matter, the company is not beUeved to be a service and quaUty

player, the company cannot change, and people do not beUeve in CS meastirement.

Third, related to this, are a set of variables describing fear of the customer and the

customer's reacdon to CS measurement: customers think something is wrong (if

asked about CS), asking customers quesdons wiU reduce CS, it wiU raise uru^aUsdc expectadons and invite unwelcome complaints, and CS is badly received by peoplein the company.

The second factor is labeUed Corporate Culture. This Unks together such items as:a lack of maruigement support for CS measurement, a percepdon that CSmeasurement is not appropriate to the company or the market, a lack of attendontothe results, a lack of a customer service poUcy and a low priority for CSmeasurement.

The third factor is Market Complacency. This Unks issues of beUef that the companyalready knows what matters in the market and what customers think, and that what matiers is having the best product, while CS is beUeved to be difficult and to inviteunwarranted cridcism from customers.

The Resources/Capability factor Unks issues of requirements in CS measurement fortechnical expertise, systems, people and time. The Logistics factor is concerned withthe problems of identifying the customer suid whether CS measurement should be


16/33

Consumer Satisfaction Measurement and Management 825

Table 5. Factor analysis* of internal processual barriers to customer satisfaction measurement

Variables^ Factors fProblems with measuring CS: 1 2 3 4 5 6 7 8F4] In our company, people think 0 82measuring CS is unproductivebecause it generates toomuch internal conflictpolitics, marketsimplification andcustomer fearF40 In our company, people think 0 78measuring CS is improductivebecause it leads to politicalsquabbles between departmentsF39 In this type of market, people 0-76think measuring CS is a wasteof time because word-of-mouthrecommendations do not matterF47 In our company, people think 0-76

measuring CS is unproductivebecause it creates a "hostageto fortune" for the marketingdepartmentF32 hi this type of market, people 0-76 0-31think measuring CS is a wasteof time because asking customersabout satisfaction makes themthink something is Vk^rongF31 In this type of market, people 0 76 0-32think measuring CS is a wasteof time because it makes satisfiedcustomers less satisfied

F36 In this type of market, people 0-72think measuring CS is a wasteof time because they think thatcustomer loyalty does not existF33 In this type of market, people 0-72 0-31think measuring CS is a waste oftime because it raises customerexpectations uniealisticailyF46 In our company, people think 0-72measuring CS is unproductivebecause complaints and criticismsfrom outside are unwelcomeF35 In this type of market, people think 0 72 0-37

measuring CS is a waste of timebecause people thirJc repeat salesare not vitalF43 In our company, people think 0 71measuring CS is unproductivebecause people just cheat the systemto get "lwownie points"F42 In our company, people think 0-69measuring CS is unproductivebecause people see it as increased


17/33


18/33

826 Nigel F. Pittty and Neil A. Morgan

Table 3. ContinuedVariablest FactorsfProblems with measuring CS: 1 2 3 4 5 6 7 8F48 In our company, people think 0 62 0 51measuring CS is unproductivebecause the people vi^ho run thingshere do not support itF23 In our company, problems in 0-59 0-38measuring CS; it underminesmanagement's "right to manage"F15 In our company, problems in 0-58 0-48measuring CS: our employees donot like itF34 In this type of market, people think 0-58 0-38 0-31measuring CS is a waste of timebecause people think we are not aservice and quality playerF24 In our company, problems in 0-56 038 0 46measuring CS: people do not likethe resultsF45 In our company, people thirJc 0-56 0-48

measuring CS is unproductivebecause people don't agree on whatwe should measureF30 In this type of market, people 0 50 0 50think measuring CS is a waste oftime because it just invitescomplaints from customersF19 In our company, problems in 0 49 0-48 0-46measuring CS: people think wecan t change it, so we shouldn'tmeasure itF25 In oirr company, problems in 0-48 0-38 0-44 0-32measuring CS: people don't really

believe in itF29 In this type of market, people 0-42 0-41 0-37think measuring CS is a waste oftime because ncKjne eise does it inthis nriarketF14 In our company, problems in 0-37 0-74 Pioc2=Corporatemeasuring CS are: management culturedoes not support itF16 In our company, problems in 0-41 0-70measuring CS are: it is not how wedo things in this companyFI7 In our company, problems in 0-45 0-63 0-30measuring CS are: people think it is

not appropriate in this kind ofbusinessF18 In our company, problems in 0-31 0-60 0-36measuring CS are: people think ithas a lower priority than otherthingsF13 In our company, problems in 0-30 0-60 0-31measuring CS are: we have no clear"customer satisfaction" policyF22 In our company, problems in 0-42 0-55 0-34 0-41 0-34


19/33

measuring CS are: no-one takes anynotice of the results


20/33


Table 3. Continued

VariablestFactorsf

Problems with measuring CS: 1 2 3 4 5 6 7 8

F27 In this type of market, people 0-77 Proc3=Marketthink measuring CS is a waste of complacencytime because: we already know

what really matters in this marketF26 In this type of market, people 0-76

think measuring CS is a waste oftime because: we already knowwhat customers think

0-63

F28 In this type of market, peoplethink measuring CS is a waste oftime because: if you produce thet)est product that is what matters

031 0-63F20 In our company, problems inmeasuring CS are: people don t likeinviting criticisms 0-47 046F8 The problems about measuring 0-45CS are: customer satisfaction isdifficult to measure 0-84

Proc4=Resources/capability

F5 The problems about measuring CSare: the technical expertise you needF6 The problems about measuring CS 0-81are: the systems you need 0-63 0-44F4 The problems about measuring CS0-62 041

are: the people you needF3 The problems about measuring CS

077Proc5=Logistics

are: the time it takesF9 The problems about measuring CSare: it is difficult to identify the real

075

customer who matters


21/33


22/33

828 Nigel F. Piercy and Neil A. Morgan

Table 3. Continued

Variablest Faclarsf

Problems with measuring C5: 1 2 3 4 5 6 7 8

F21 bl our company, problems in 0 41 0 35 0 60 Proc8=CrEdibilitymeasuring CS are: people don'tbelieve the results

Eigenvalues 21-99 3-41 1-91 174 166 1-52 1-17 1-07

Cumulative percentage of

variance explained 45 8 52 9 56 9 60-5 64-0 67-1 69-6 71-8

Varimax rotation with Kaiser normalization, converging in 12 iterations; tLoadings less than 0 3 aresuppressed; ^Measured on 5-point scales where l="a very minor problem" and 5="avery majorproblem".

done by distributors rather than the manufacturer. The Cost Barriers fador links thefinance and expense impUcadons of CS measurement.

The Perceived Market Drivers factor Unks beUefs that the market is driven bytechnical spedficadons and price. The Credibility fador is one variable only: belief inthe results of CS measurement.

Index Reliability

Table 4 shows the Cronbach Alpha scores for the indices created from the fadorsdescribed above. These suggest that the factor indices are robust, with the exce

ptionof STRAT4, which is dropped from the analysis.

Results

In a preliminary evaluadon of HI, Table 5 suggests a number of significantrelationships between the use of CS data in management dedsion-making and the

Table 4. Index reliability

Cronbach Alpa n Mean SD

Procl intemal politics, market simplification and 0-97 200 1-92 0-76

customer fearProc2 Corporate culture 0-93 200 214 1-03Ptoc3 Market complacency 0-88 200 2-38 0-99Proc4 Resources/capabibty 082 200 2-79 0-93Proc5 Logistics 072 200 1-69 0-63Proc6 Cost barriers 0-90 200 2-45 1-05Proc7 Perceived market drivers 0-74 200 2-34 1-01Proc8 Credibility N/A 200 211 1-17


23/33

Usel Quality/operations management 0-90 163 3-25 0-91Use2 Staff pay and promotion 0-90 163 2-02 0-91Use3 Staff training and evaluation 0-88 163 2-89 0-95Use4 Strategic management control 0-81 163 3-15 073

Strati Service and quality 0-64 187 4-15 0-69Strat2 Competitive differentiation 0-65 187 3-07 1-14Strat3 High profit/volume 0-67 187 4-01 1-71Strat4 Low price/cost 0-33 187 3-04 076

N/A, not applicable.


24/33


829

Table 5. Correlation* matrix: Managerial uses of customer satisfaction measurement andmarket strategy components

Strati Straa Strat3Service and Cojnpetitwe Migh profitiCjuality differentiation volume

Usel Quality/operations management 0-29+ 0-221: 0-26+Use2 Staff pay and promotion 0-16 0-17 0-14Use3 Staff training and evaluation 0-20t 0-12 0-17Use4 Strategic management control 0-29+ 0-36+ 0-33+

Pearson correlations; +significance level of 0-001; ^significance level of 0-05.market sfrategy components identified. This is pardcularly strong for USEl(QuaUty/Op>eradons Management) and USE4 (Sfrategjc Management Control). Inconsidering H2, the correladons in Table 6 show a number of sigruficantreladonships between the processual barrier factors and the CS measurement usefactors, although almost none with the market sfrategy components. These

reladonships are negadve, and strongest for the use of CS data for dedding steiff payand promodon and for staff training and evaluadon.

Discussion

The underlying point of the case argued in this paper is that the use of CSmeasurement in pursuit of market orientadon and customer-based or customer-driven market strategies requires a research and managerial agenda which extends beyond the current focus on technique and system. The argument is that CSmeasurement may potendaUy create posidve or negadve effects in a company, andthese may be traced not simply to operadonal and resource issues but to

managerial/poUdcal problems and cultural/stmctural characterisdcs.The exploratory evidence gathered in execudve workshops suggested theexistence of an agenda of covert fadors currendy ignored by the Uterature, yetpotentiaUy highly sigiuficant in determirung the effects and effecdveness of CSmeasurement.

To this may be added the evidence from an exploratory survey of UKmanufacturing companies. Perhaps the most notable finding in the data presentedhere are the intemal processual barriers identified. These were identified as: IntemalPolitics, Market Simplification and Customer Fear, concemed with the impact of CS

measurement on poUdcs and coxvfUct in the company, and simpUficadon devicesadopted in percepdons of the customer; Corporate Culture, and its rejecdon of CS measurement; Market Complacency, which suggests CS measurement is redundant;Resources/Capability, Logistics and Cost Barriers fadors, concemed with the operadonalaspeds of implementing CS measurement; Perceived Market Drivers, representinga corporate beUef that the market is driven only or primarily by technicalspedficadons and price; and. Credibility, or whether the results of CS measurement


25/33

are beUeved in the company.

While only exploratory, this fador structure offers a new insight into the realcontext perceived by execudves for the implementadon of CS measurementssystems, and a potendal diagnosdc for studying individual cases.

In addidon, the survey showed a reasonably strong posidve reladoriship betweenthe use of CS data and market sfrategy components, and a negadve reladonship


26/33


S 2 2 S

^-1S 1 ;5 2 2 3 3So 8lO o Lfi >.c^ ^ ^ ^l lll-iI


27/33


between the internal processual barriers and the use of CS data in managementdedsion-making. What was not clear was a relationship between the processualcharacteristics and market strategy elements, and this remains a question for furtheranalysis.

In essence, what we have found is that the measurement and use of CS data issignificantly and positively associated with market strategies of service and queility,competitive differentiation, and high profit/volume, and this is applied mostparticularly to dedsion-making in the quality/operations area, and in overallstrategic management control. This suggests that when it is measured, CS is asignificant factor in dedsion-making in these areas.

However, what we also find paradoxically is that the more CS data are used indedsion-making, the more significant are the negative assodations with informalprocessual barriers. However, these latter relationships are overwhelmingly with theuse of CS data in nwking dedsions on staff pay and promotion, and training andevaluation.

This suggests a number of specxilative explanations. It may be that CS data areused by companies in situations where internal barriers are low giving negativeassodations between use of CS data and the existence of barriers. This may alsoexplain why the clearest relationships aie found for the use of CS data in staff-relatedissues. Cross-sectional data can tell us little about the emergence or reduction ofinternal processual barriers over time, or the role that the use of CS data mayplayin stimulating or overcoming the barriers identified. This also remains an issue forfurther analysis, requiring a longitudinal design.

ImplicationsPerhaps the most notable implication of this work is that a new research agendaisemerging, based on the contention that the present literature is myopic in its concernwith the technical aspects of CS measurement alone, at the expense of an analysis ofprocessual aspects. A start has been made in developing such an agenda through theexecutive workshop data and the exploratory survey evidence presented here. This work is to be continued in two ways. Firstly, a more detailed analysis of proces

sualcharacteristics is to be undertaken, and secondly, a longitudinal case study isbeingdeveloped to examine the internal and external effects of the implementation ofCSmeasurement over a 2-year period.

The managerial implications of the work to-date are that: the issues to beconsidered in implementing and extending CS measurement systems may be morediverse and complex than previously suggested in the literature. In particular i


28/33

t maybe necessary to think far more of the behavioural and organizational aspects ofCSmeasurement, if such approaches are to be successful and effective in assistingthedevelopment of market orientation and customer-based market strategies. Inparticular, the potential tension between the demands and requirements of theinternal market (employees, managers, distributors) and the external market (enduserand intermediary customers) should be recognized as a focus for managementattention. For example, the structure shown in Figure 3 is one which has provedinsightful in discussions with managers. This suggests four possible scenarios wheninternal and external customer satisfaction levels are compared: Syner^ internal


29/33


Extemal customer satisfactionHi LoHi

Intemal

customer

satisfaction

Coercion Alienation

Lo

Figure 3. Internal and extemal customer satisfaction.

and extemal customer sadsfacdon is high, and should be sustainable and self-regenerating; Coerdon extemal customer sadsfacdon is high, but through dghtmeasurement control giving low intemal customer satisfadion and problems ofsustainabiUty; Alienation both intemal and extemal customers are dissatisfied,with low loyalty and low performance Ukely; and, Intemal Euphoria intemal

customers are highly sadsfied but their focus is inward and not on the extemalcustomer.

These scenarios aie exaggerated, but provide a basis for pracdcal insight into theintemal/external market interface 2md what this produces.

Certainly, there are apparent dangers in adopting CS measurement systems whichdo not address the intemal market questions raised in this work, which may extendbeyond simple failure to gain customer-focus and may actuaUy damage corporatecapabiUty to deUver intended meirket strategies of service and quaUty moregeneraUy.

References

Band, WiUiam (1988), "How to Gain Competitive Advantage Through Customer

Satisfaction", Sales and Marketing Management in Canada, May, pp.30-32.Bearden, VWUiam O. and Teal, Jesse E. (1983), "Seleded Determinants of ConsumerSatisfacdon and Complaint Reprarts", Journal of Marketing Research, 20, February,pp.21-28.Berry, Leonard L. (1981), "The Employee as Customer", Journal of Retail Banking, 3,

No.l, pp.271-278.ChtirchiU, Gilbert A. and Suprenant, Carol (1982), "An Invesdgadon into theDeterminants of Customer Sadsfacdon", Journal of Marketing Research, 19,November, pp.491-504.Christopher, Mardn, Payne, Adrian and BaUantyre, David (1992), Relationship

Marketing, Oxford, Butterworth-Heinemann.


30/33


833

Crosby, PhiUp B. (1979), Quality is Free The Art of Making Quality Certain, NewYork, McGraw-Hill.

Day, George S. (1990), Market-Driven Strategy: Processes for Creating Value, New York,Free Press.

Dnicker, Peter (1958), The Practice of Management, London, Pan.

Gale, Brad (1992), "Sadsfacdon Congress to Focus on Acquiring, RetainingCustomers", Marketing News, 6 July, p.l8.Garvin, David A. (1988), Managing Quality The Strategic and Competitive Edge,London, ColUer MacMillan.Glaser, Bamey and Strauss, Anselm (1967), The Discovery of Grounded Theory,Chicago, Aldine PubUshing Co.Griffin, Abbie and Hauser, John R. (1992), The Voice of the Customer, Cambridge, Marketing Sdence Insdtute Report No.92-106.Johnson, Gerry and Scholes, Kevin (1992), Exploring Corporate Strategy, Hemel

Hempstead, Prendce-HaU.KohU, Ajay K. and Jaworski, Bernard J. (1990), "Market Orientadon: The Construd, Research Propositions, and Management ImpUcadons", Joumal of Marketing, 54,April, pp.1-18.

Kotler, PhiUp (1994), Marketing Management: Analysis, Planning and Control, 8thEdidon, Hemel Hempstead, Prendce-HaU Intemadonal.Lele, MiUnd M. and Sheth, Jagdish N. (1988), "The Four Fundamentals of CustomerSadsfacdon", Business Marketing, June, pp.80-94.

McKenna, Regis (1991), Relationship Marketirtg, Reading, Mass., Addison-Wesley.

McQuance, Edward and Mclntyre, Shelby (1992), The Customer Visit: An EmergingPractice in Business-to-Business Marketing, Cambridge, Marketing Sdence MsdtuteReport No.92-114.

Morgan, Neil A. and Piercy, Nigel F. (1995), "Compeddve Advantage, QuaUtyStrategy, and the Role of Marketing", British Joumal of Management(forthcoming).

Narver, John C. and Slater, Stanley F. (1991), Becoming More Market Oriented: An Exploratory Study of the Programmatic and Market-Back Approaches, Cambridge,Marketing Sdence Insdtute Report No.91-128.

Peters, John and Austin, Nancy (1985), Passion for Excellence, New York, HarperandRow.Peters, Thomas, J. and Waterman, Robert H. (1982), In Search of Excellence: Lessonsfrom America's Best-Run Companies, London, Harper & Row.

Peters, Tom (1988), Thriving on Chaos, New York, Harper and Row.


31/33

Piercy, Nigel F. (1985), Marketing Organization, London, Unwin Hyman.

Piercy, Nigel F. (1987fl), "Adverdsing Budgedng: Process and Stmcture AsExplanatory Variables", Joumal of Advertising, 16, No.2, pp.134^144.Piercy, Nigel F. (1987i'), "The Marketing Budgeting Process: Marketing ManagementImpUcadons", Joumal of Marketing, 51, No.4, pp.45-59.Piercy, Nigel F. (1992), Market-Led Strategic Change, Oxford, Butterworth-Heinemann.

Piercy, Nigel F. (1994), "Marketing Implementation: Analyzing Strudure, Processand Informadon" in John Saunders (ed.). The Marketing Initiative, HemelHempstead, Prentice-Hall.

Piercy, Nigel F. (1995), "Customer Satisfacdon and the Intemal Market: Matching


32/33

Nigd F. Piercy and Neil A. Morgan

Ovar Customers To Our Employees", Jourrud of Marketing Practice: AppliedMarketing Science, 1, No.l, pp.22-44.Piercy, Nigel F. and Cravens, David W. (1995), "The Network Paradigm and theMarketing Organizadon", European Joumal of Marketing, 29, No.3, pp.7-34.

Piercy, Nigel F. and Morgan, NeU A. (1994), "Behavioral Planning Problems inExplaining Market Plcuming Effecdveness", Joumal of Business Research, 29,pp.167-178.

PoweU, Thomas L. (1988), "Identify and Fulfil Customer Service Expectadons",Industrial Marketing Management, 17, pp.273-276.Richins, Marsha L. (1983), "Negadve Word-of-Mouth by Dissatisfied Consumers: APilot Study", Joumal c^ Marketing, 47, Vfinter, pp.68-78.Richins, Marsha L. (1987), "A Muldvariate Analysis of Responses to Dissatisfacdon",Joumal of the Academy of Marketing Science, 15, FaU, pp.24r-32.

Tse, David S. and Mlton, Peter C. (1988), "Models of Consumer SadsfacdonFormadon: An Extension", Joumal of Marketing Research, 25, May, pp.204-212.Webster, Frederick E. (1992), "The Changing Role of Marketing in the Corporadon",

Joumal (^Marketing, 55, October pp.77-93.

WUson, Peter C. cuid Nicosia, Franco M. Nicosia (1986), "Emerging Paradigms forthe Study of Consumer Sadsfacdon", European Research, 14, pp.4-11.


33/33

Piercy Morgan JMM 1995

Documents

Transcript of Piercy Morgan JMM 1995