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A confirmation perspective on perceivedservice quality

Lawrence O. Hamer

Department of Marketing, DePaul University, Chicago, Illinois, USA

AbstractPurpose The paper seeks to provide a theoretical and empirical investigation of the relationship between consumer expectations and consumerperceptions of service quality.Design/methodology/approach The theory of cognitive reference points, adaptation-level theory, and assimilation-contrast theory are used toformulate hypotheses concerning the relationships between perceived service quality, consumer expectations, and perceptions. These hypotheses wereempirically investigated through an experiment that manipulated expectations and perceptions while measuring perceived service quality.Findings The principal finding is that consumer expectations are positive predictors of perceived service quality (i.e. higher expectations lead tohigher perceptions of quality). Another finding is that the relationship between expectations and perceived service quality is much stronger than priorliterature suggests.Practical implications The practical implication of this study is that practitioners should seek to actively manage their customers expectations toincrease those expectations.Originality/value This paper is valuable to practitioners who are seeking to use expectations to achieve higher perceptions of quality among theircustomers. It is also valuable to researchers who are seeking to understand the relationship between expectations and quality perceptions.

Keywords Customer services quality, Services marketing, Expectation, Perception

Paper type Research paper

An executive summary for managers can be found at

the end of this article.

One of the primary goals of service marketers is to

maximize consumers perceptions of the service encounter

and the firm-consumer relationship. To this end, research in

the area of services marketing has examined the process by

which consumers evaluate the quality of the service they

receive and the components of this evaluation process. Theadvice given to practitioners by the service literature is to

make sure the service performance received by consumers

exceeds their expectations. This paper presents evidence

that following this advice will ensure that consumers

perceptions will not be maximized, as the advice is based

upon a faulty conceptualization of the service quality

formation process.

The current conceptualization of the service quality

formation process has its roots in the service quality

studies of Parasuraman et al. (1985) that led to the gap

conceptualization of service quality and the development of

the SERVQUAL instrument. The gap conceptualization of

perceived service quality ( PS Q) , and the related

disconfirmation conceptualization of consumer satisfaction/dissatisfaction, have been the basis for a great deal of work

on consumers evaluations of service (for recent examples,

see Durvasula et al.s (1999) study of the applicability of

SERVQUAL business-to-business settings, and Kopalle and

Lehmanns (2001) study of individual consumer differences

in the degree to which disconfirmation effects perceptions

of satisfaction) . B oth the gap and disconfirm ation

conceptualizations posit that evaluations are a function of

the distance between perceived perform ance and

expectations. High evaluations are thought to result from

consumers perceiving the delivered service as being better

than expected, and low evaluations are thought to resultfrom consumers perceiving the delivered service as being

worse than expected. The managerial implications of these

formulations include the practice of under-promising and

over-delivering. In other words, firms should seek to lower

consumers expectations (i.e. under-promise) in order to

ensure they can exceed those expectations (i.e. over-

deliver).

This paper suggests that rather than being a function of the

gap between expectations and performance, service quality

perceptions result from a process of confirmation. The

managerial implications of a confirmation conceptualization

suggest that under-promising (i.e. lowering consumers

expectations) will result in lower quality perceptions;

moreover, high expectations of service performance will be

associated with high perceptions of service quality. Thus,

rather than trying to maximize the delivered service-

expectations gap, practitioners who seek to maximize their

clients perceptions of quality should attempt to eliminate this

gap through the raising of expectations. To develop the

argument of this expectation-perceived service quality (PSQ)

relationship, we first discuss the constructs relevant to the

formation of service quality perceptions. Next, the gap

conceptualization will be reviewed and its limitations

discussed. We then present and discuss the confirmation

conceptualization that more completely delineates the role of

expectations in the formation of PSQ.

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0887-6045.htm

Journal of Services Marketing

20/4 (2006) 219232

q Emerald Group Publishing Limited [ISSN 0887-6045]

[DOI 10.1108/08876040610674571]

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Perceived service quality constructs

Discussions of the conceptualization and measurement of

PSQ center around three constructs:

1 expectations;

2 perceived performance; and

3 disconfirmation (see, for example, Parasuraman et al.,

1988; Bolton and Drew, 1991).

Expectations

Expectations are beliefs about the level of service that will be

delivered by a service provider, and they are assumed to

provide standards of reference against which the delivered

service is compared (Zeithaml et al., 1993). Although service

quality researchers originally viewed expectations as strictly a

normative standard (e.g. Parasuraman et al., 1985, 1988),

more recent studies suggest at least two additional types of

expectations (Boulding et al., 1993; Zeithaml et al., 1993).

Thus, three types of expectations are discussed below:

1 normative;

2 predictive; and

3 minimal.

Normative expectationsNormative expectations are conceptualized as the level of

service that would be expected from an excellent service

provider (Zeithaml et al., 1990). The normative standard has

been variously operationalized as the wished for level of

performance (Miller, 1977), the level at which the consumer

wants the product to perform (Swan and Trawik, 1980), what

the customer thinks should happen in their next encounter

(Boulding et al., 1993), the optimal product performance for

which a consumer would ideally hope (Tse and Wilton,

1988), and how a brand should perform in order for the

consumer to be completely satisfied (Prakash, 1984).

Empirically, normative expectations have been found to be

negatively related to service evaluations. Using correlation

analysis, T se and W ilton ( 19 88 ) f ound normative

expectations to have an indirect (through perceived

performance which will be discussed later) and negative

effect on satisfaction (r 20:24, p , 0:05). Boulding et al.(1993) found normative expectations to have a negative effect

on perceptions of the service (the standardized regression

coefficient was 20.17, p , 0:05). Babakus and Boller (1992)

found the correlation between normative expectations and

PSQ to be negative, but not statistically significant

(r 20:01). Thus, empirical evidence suggests thatnormative expectations are negatively correlated with

perceptions of service quality yielding coefficients ranging

from approximately 0 to approximately 20.20.

Predictive expectations

Predictive expectations are conceptually defined as the level of

service that consumers expect to receive from a given service

provider in a given situation. Consumers predictive

expectations are generally lower than their normative

expectations (Boulding et al., 1993). However, predictive

and normative expectations might be equal if consumers

believed that the service provider with whom they are

interacting is an excellent service provider. Predictive

expectations have been variously operationalized as the

expected standard (Miller, 1977), predictive expectations

(Swan and Trawik, 1980; Prakash, 1984), a products most

likely performance (Tse and Wilton, 1988), and will

expectations (Boulding et al., 1993).

Predictive expectations have been found to be positively

related to service evaluations. Tse and Wilton (1988) found the

correlation between predictive expectations and satisfaction to

be 0.39 (p , 0:01). Boulding et al. (1993) reported the

predictive standard to have a standardized regression coefficient

of 0.38 (p , 0:01). Voss et al. (1998) found that predictive

expectations had a positive effect on perceived performance and

satisfaction (standardized structural coefficients of 0.51 and0.23, respectively). Thus, the empirical evidence suggests that

predictive expectations are positively related to PSQ with a

correlation coefficient of approximately 0.40.

In studies that have included both a predictive and

normative operationalization of expectations, predictive

expectations have been found to be better predictors of

PSQ than have normative expectations. See, for example,

Boulding et al. (1993) who found predictive expectations to

have regression coefficients of 0.38 and 0.87 (both with

p , 0:01) over two periods of a longitudinal study when used

as a predictor of service evaluations. The coefficients for

normative expectations over the same time periods, however,

were 20.17 (p , 0:05) and 20.24 (p , 0:01).

Adequate expectationsAdequate expectations represent consumers perceptions of

the lowest acceptable level of service. Adequate expectations

have been conceptualized as the lowest level of service

consumers expect to receive (Zeithaml et al., 1993) and

minimum tolerable expectations (Miller, 1977). A lack of

empirical research leaves the issue of whether adequate

expectations are positively or negatively related to PSQ open

to further investigation.

Perceived performance

Perceived performance represents consumers subjective views

of the level of service they receive in service encounters

(Parasuraman et al., 1985; Brown and Swartz, 1989; Cronin

and Taylor, 1992; Teas, 1993). Perceived performance has alsobeen called perceptions and performance in the service

quality literature (Boulding et al., 1993; Zeithaml et al., 1988).

Perceived performance represents the stimuli each consumer

perceives in the service encounter. The consumer then

evaluates the service encounter by comparing the perceived

stimuli (i.e. perceived performance) to the stimuli they expected

to perceive (i.e. expectations). In other words, perceived service

quality (i.e. an evaluation of a service encounter) results from a

consumer comparing their perception of the service encounter

(i.e. perceived performance) to what they expected to have

happen during the encounter (i.e. expectations).

Perceived performance has consistently been found to be

strongly and positively related to service evaluations. Using

regression, Bolton and Drew (1991) found perceived

performance to be a significant predictor of service

evaluations (the performance variable in their regression

equation had a standardized coefficient of 0.55, p , 0:005).

Cronin and Taylor (1992) and Babakus and Boller (1992)

both found perceived performance and PSQ to be highly

correlated (R2 0:60 and 0.66 respectively). More recently,Ferrell et a l. ( 20 01 ) defined 1 2 types of employee

performance behaviors that were each positively related to

PSQ. Similarly, Brady and Cronin (2001) defined nine types

of perceptions that impacted PSQ in a hierarchical manner.

Thus, empirically, perceived performance has been shown to

have a strong, positive relationship with PSQ.

A confirmation perspective on perceived service quality

Lawrence O. Hamer


Volume 20 Number 4 2006 219232

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Disconfirmation

Disconfirmation represents the relationship between

expectations and perceived performance. If perceived

performance exceeds expectations, disconfirmation is said to

be positive. If perceived performance falls short of

expectations, disconfirmation is said to be negative.

Empirical evidence for the importance of disconfirmation

on PSQ is mixed. Studies that find a significant relationshipbetween disconfirmation and PSQ typically find the

relationship to be weaker than that between perceived

performance and PSQ (Babakus and Boller, 1992). Bolton

and Drew (1991) found disconfirmation to be a significant

predictor of PSQ (regression coefficient 0:16, p , 0:05),but they found the regression coefficient for perceived

performance to be 0.56. These results have led some

researchers to believe that the relationship between

disconfirmation and PSQ is an artifact of the relationship

between perceived performance and PSQ (Babakus and

Boller, 1992; Cronin and Taylor, 1992). Thus, the theoretical

importance of disconfirmation to perceptions of quality has

not been empirically validated. Interestingly, Kopalle and

Lehmann (2001) demonstrated that the sensitivity to

disconfirmation varied across consumers as some consumers

attach more importance to disconfirmation than do others

during the process of evaluation. These individual differences

offer a possible explanation of the inconsistent relationship

between disconfirmation and PSQ.

The gap conceptualization

The gap conceptualization conceptualizes PSQ as the extent

of discrepancy between customers expectations and their

perceptions (perceived performance) (Zeithaml et al., 1990,

p. 19). This conceptualization implies that a consumer who

perceives a positive disconfirmation (i.e. a consumer who

perceives performance as being greater than what was

expected) would perceive the service provider as beinghigher in quality than a consumer who perceives a negative

disconfirmation. Increases in positive disconfirmation are

thought to correspond with equivalent increases in PSQ.

Conversely, increases in negative disconfirmation are thought

to correspond with equivalent decreases in PSQ. In other

words, a liner relationship between disconfirmation and PSQ

is implicitly assumed (see Figure 1). Exceeding expectations,

therefore, is viewed as invariably preferable to meeting or

failing to meet expectations. Additionally, exceeding low

expectations is thought to result in the same level of quality

perceptions as exceeding high expectations.

Theoretical foundations and measurement

From their observations of an extensive series of focus groups

dealing with a variety of services, Parasuraman et al. (1985)

concluded that PSQ was a function of the gap betweenperceived performance and expectations. Hence, the findings

of this research team have come to be known as the gap

conceptualization.

Parasuraman et al. ( 19 85 , 1 98 8) developed the

S ERVQUA L instrum ent as an indirect m easure of

disconfirm ation. T he S ERVQUA L instrum ent is

administered in two sections; one for the measurement of

expectations and the other for the measurement of perceived

performance. Each section consists of 22 items representing

five dimensions of service quality. The disconfirmation score

on each dimension is obtained by taking the average

difference of the perceived performance and expectations of

the items for each of the dimensions. Alternatively, the

disconfirmation on each of the 22 items can be measured

directly (Parasuraman et al., 1991)[1] by asking respondents

to express the discrepancy between perceived performance

and their expectations (i.e. respondents are asked on a nine-

point scale where 1 is lower than expected and 9 is higher

than expected to respond to statements such as Compared

to my expectations, ABCs service performance is. . . ).

Whether disconfirmation is measured indirectly or directly,

PSQ is defined as an importance-weighted average of the

disconfirmation score of each dimension. In other words,

PSQ is operationally defined as the equivalent of the

difference between perceived performance and expectations.

This operational definition of PSQ implicitly assumes that

perceived performance and expectations are equally

important in the formation of PSQ.

Gap conceptualization limitations

Comparing the gap conceptualization with the empirical

findings about PSQ constructs (as discussed earlier) reveals

that the gap conceptualization has a limited ability to account

for several key empirical findings:. The gap conceptualization asserts that expectations have a

negative effect on PSQ (Parasuraman et al., 1988).

However, predictive expectations have been found to have

Figure 1 Alternative views of PSQ


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a strong, positive relationship with PSQ. Moreover, the

fact that normative expectations have been found to have a

contradictory effect (i.e. a weak, negative effect) on PSQ

cannot be explained by the gap conceptualization.. The gap conceptualization views disconfirmation as the

key construct in the formation of PSQ. However,

empirical studies have found the relationship between

disconfirmation and PSQ to be weak or non-significant.. The gap conceptualization and the SERVQUAL

instrument assume that perceived performance and

expectations are equal in terms of the size of the effect

they have on PSQ. However, empirical evidence suggests

perceived performance has a stronger relationship with

PSQ than do expectations (Bolton and Drew, 1991;

Babakus and Boller, 1992; Boulding et al., 1993; Cronin

and Taylor, 1992). The relationship between perceived

performance and PSQ is so strong that some researchers

have suggested that PSQ can be best predicted by

measuring perceived performance alone (i.e. by omitting

the measurement of expectations) (Babakus and Boller,

1992; Cronin and Taylor, 1992).

The confirmation conceptualization

The confirmation conceptualization is offered as an

alternative explanation of the PSQ formation process, and is

consistent with the available empirical evidence. The

confirmation conceptualization builds upon the gap

conceptualization by developing a m ore com plete

explanation of the key role played by expectations in the

PSQ formation process.

The confirmation conceptualizations view of

expectationsExpectations as reference points

The services literature considers expectations to be reference

points of comparison[2] in the service evaluation process

(Gronroos, 1982; Lewis and Booms, 1983; Parasuraman et al.,

1985). The confirmation conceptualization builds upon

reference-point theories (namely the theory of cognitive

reference points, adaptation-level theory, and assimilation-

contrast theory) to more fully delineate the role expectations

play in the service quality formation process. These theories

were chosen because of their proven ability to explain

consumers evaluations of marketing stimuli (Monroe et al.,

1991)[3].

Multiple levels of expectations

Adaptation-level and assimilation-contrast theories suggest

that individuals make judgments by comparing new stimuli to

internal reference ranges consisting of multiple reference

points (Sherif and Hovland, 1961; Helson, 1964). Reference

points may represent the typical value of the stimulus, the

aspiration value of the stimulus, or a value from the

consumers personal experience (Della Bitta and Monroe,

1973; Klein and Oglethorpe, 1987). This concept of reference

ranges provides theoretical support for multiple expectation

levels (e.g. Boulding et al.s (1993) should and will

expectations), and suggests that while the effects of the

various levels of expectations can be modeled separately the

multiple levels of expectations are individual parts of a single

reference range.

Assimilation-contrast and adaptation-level theories further

suggest that within the reference scale, there is a preferred

(major) anchor for the judging of new stimuli. The endpoints

of the reference scale (e.g. normative and adequate

expectations) are likely to act as anchors when consumers

are inexperienced with the stimuli category (Monroe et al.,

1991). Experienced consumers are likely to use a reference

point between the endpoints of the scale (e.g. predictive

expectations) because their experience allows a more

entrenched idea of the service they are likely to receive.Here again, these theories are capable of explaining empirical

findings from the service quality literature. Most service

quality studies use respondents who have experience with the

service category being studied and find predictive

expectations to be more highly correlated with perceived

quality than other levels of expectations (e.g. Hamer et al.,

1999). Normative and adequate expectations, if viewed as the

endpoints of the expectations range, are less likely to be the

major anchors in a service quality study because respondents

usually are experienced consumers of the given service

category. Adaptation-level and assimilation-contrast theories

indicate that the strength of the predictive expectation-PSQ

relationship is due to the effects of experience on the

expectations construct. Therefore, assuming most consumers

of a given service category have prior experience with thatservice category:H1. Predictive expectations will have the largest effect on

service quality judgments.

Perceived service quality conceptualization

PSQ is considered a dynamic phenomenon that changes with

the receipt of various types of information (most notably

delivered service) (Boulding et al., 1993; Hamer et al., 1999).

The quality perceptions held by consumers after any given

service delivery (i.e. revised quality) result from revising the

quality perceptions consumers held prior to a given service

delivery (i.e. initial quality) (Bolton and Drew, 1991). Initial

quality is determined by past experience with a service

provider, word-of-mouth, advertisements, tangible cues, etc.Consumers use these same information sources to construct

expectations of service providers (Zeithaml et al., 1993).

Therefore, it is logical to conclude that expectations are

equivalent to initial PSQ (i.e. high (low) expectations of a

service provider would indicate high (low) prior perceptions

of quality of the service provider). In other words,

expectations are antecedents of service quality perceptions,

and after delivery PSQ leads to a revision of consumers

expectations. This view of the relationship between

expectations and initial PSQ is similar to Cronin and

Taylors (1992) conclusion that expectations and perceived

quality are equivalent in the absence of perceived

performance.

If expectations are equivalent to PSQ before perceived

performance there is no evidence for assuming that

expectations become neutral after performance is perceived.

In fact, adaptation-level and assimilation-contrast theories

suggest that the evaluation of new stimuli results from the

reference range being displaced in the direction of the new

stimuli (Monroe et al., 1991). Rather than being neutral

elements in the PSQ formation process, adaptation-level and

assimilation-contrast theories both suggest that expectations

are either positive or negative before service delivery and they

will be either positively or negatively valenced after being

revised based on PSQ. Further, PSQ is likely to be positively

correlated with the range of expectations of the service


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provider (i.e. high expectations will be associated high levels

of PSQ). Thus, we have the following hypotheses:

H2. Consumers with high expectations will perceive higher

levels of service quality than consumers with low

expectations.

Upon delivery of the service, initial perceptions of quality (i.e.

expectations) are revised in the direction of perceived

performance. Consumers whose perceptions of performance

exceed their expectations will adjust their perceptions of

quality upw ard. Consumers w hose perceptions of

performance fall short of their expectations will adjust their

perceptions of quality downward. In other words, there is a

positive relationship between perceived performance and PSQ

as higher (lower) levels of perceived performance tend to

result in higher (lower) levels of PSQ.

The adjustment process posited by the confirmation

conceptualization is similar to the service quality formation

process posited by the gap conceptualization. However, the

t wo paradig ms differ i n th at the confir mation

conceptualization accounts for the pre-existing relationship

b etween exp ect at io ns and PSQ while the gap

conceptualization does not. By accounting for the pre-existing relationship between expectations and PSQ, the

confirmation conceptualization more fully captures the effects

of expectations on service quality judgments than does the

gap conceptualization.

The PSQ curve

The applicability of prospect theory (specifically the work of

Kahneman and Miller, 1986) to service quality studies has

been noted in previous studies (Parasuraman et al., 1994).

Prospect theory suggests that a new stimulus (e.g. perceived

performance) is viewed as a gain (i.e. the stimulus is better

than expected) or a loss (i.e. the stimulus is worse than

expected) relative to a reference stimulus (e.g. expected

quality) (Kahneman and Tversky, 1979). And, the utility (e.g.

PSQ) associated with the new stimulus is a function of

whether the change from the reference point is perceived to be

a gain or a loss.

Prospect theory also suggests that people evaluate gains

differently than losses. Specifically, the absolute value of the

utility associated with a gain will be less than the absolute

value of the utility associated with a loss, assuming that the

gain and the loss are equal in magnitude (Kahneman and

Tversky, 1979). In other words, a function whose segments[4]

have two different slopes can characterize the relationship

between the stimuli (e.g. perceived performance) and the

evaluation of the stimuli (e.g. PSQ). In the area of losses (i.e.

when expectations exceed performance), the curve would

have a relatively steeper slope compared to the area of gains

(i.e. when performance exceeds expectations). Consumersexpectations would be the reference point that separates the

function into gains and losses. Thus:

H3. Expectations moderate the relationship between

perceived performance and PSQ. More specifically,

perceived performance has a relative larger impact on

PSQ when perceived performance falls short of

e xp ec ta tio ns c om pa re d t o wh en p er ce ive d

performance exceeds expectations.

The gap conceptualization, with its assumption of a negative

relationship between expectations and PSQ and its

assumption that expectations and perceived performance are

equally related to PSQ, implies the relationship between

disconfirm ation and PSQ can be represented by a

m onotonically increasing f unction. How ever, the

confirmation conceptualization suggests increases in

perceived performance lead to relatively smaller increases in

quality perceptions when performance is viewed as a gain and

relatively larger decreases in quality perceptions when

performance is viewed as a loss (see Figure 1).

Methodology

Some of the i mplications of the confi rmation

conceptualization have received support from previous

empirical research. However, other implications have not

been empirically tested. Thus the research objectives were:. to test the hypotheses that are unique to the confirmation

conceptualization; and. to replicate previous research findings in this area.

Including replication hypotheses permitted an assessment of

the convergent validity of this study with previous research.

Finding consistent results for the replication will provide

evidence of the internal and external validity of the study andincrease the level of confidence for the empirical results

bearing on the unique hypotheses.

The hypotheses developed in the previous section were

t es te d u si ng d at a g at he re d f ro m a 2 expectations 3 performance between-subjects experimental design. At ot al o f 1 43 r es po nd en ts , d ra wn fr om a p oo l o f

undergraduate business majors at a large midwestern

university, participated in the experiment with sample size

of the individual cells ranging from 25 to 31.

Procedure

Extensive pretesting was used to select the service category to

be used for the experiment, and to determine those attributes

consumers use to judge the service. Film developing was

chosen as the service. The attributes used to judge the filmdevelopers were determined to be the amount of time it took

to develop the film, clarity of the pictures, and friendliness of

the firms employees. Each respondent was presented with a

self-administered questionnaire containing a scenario in

which the respondent had two service encounters with a

film developer. The first of the two encounters was used to

manipulate expectations (discussed in the following section)

and familiarize respondents with the type of scales that were

being used. The second encounter was used to manipulate

performance.

ManipulationsExpectations

The expectation construct was manipulated at two conditions

(high and low) by providing respondents with information

about the past performance and current price of the focal firm

and two competitive firms. As presented in Figure 2, the

manipulation involved presenting respondents with

information concerning the past performance of the firms

obtained through word-of-mouth communications with

friends of the respondent. Expectations were further

manipulated through written scenarios that led respondents

through an initial encounter with the focal firm in order to

strengthen the expectation manipulation. The effectiveness of

the expectations manipulation was assessed by measuring

respondents expectations after this initial encounter (note:


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Analysis and results

The results of the tests for each of the hypotheses is

summarized in Table I, and discussed in detail below.

The relationship between expectations and PSQ

The confirmation conceptualization hypothesized

expectations and PSQ to be positively related (see H2). The

results of an ANOVA, with the expectation manipulation as

the independent variable and PSQ as the dependent variable,

revealed that respondents in the high expectation condition

had significantly higher service quality perceptions than

respondents in the low expectation condition (mean of

PSQ 6 .0 7 and 5 .1 9, respectively; Fdf142 7:49,p , 0:007). This result supports H2, that respondents with

higher expectations had higher perceptions of service quality

than respondents with low expectations. Thus, the data

support the hypothesized positive relationship between

expectations and PSQ.

Expectations as moderators of the perceived

performance-PSQ relationship

Expectations were hypothesized to moderate the relationship

between perceived performance and PSQ (see H3). An

Figure 4 Measurement of expectations

Table I Summary of hypotheses tests

Hypothesis Support/non support

H1. Predictive expectations will have the largest effect on service

quality judgments

Supported (see Analysis and results and Tables II and III)

H2. Consumers with high expectations will perceive higher levels of

service quality than consumers with low expectations

Supported (see The relationship between expectations and PSQ)

H3. Expectations moderate the relationship between perceived

performance and PSQ. More specifically, perceived performance

has a relative larger impact on PSQ when perceived performance

falls short of expectations compared to when perceived

performance exceeds expectations

Supported (see Expectations as moderators of the perceived performance-

PSQ relationship and Figure 5)


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A NOVA , w ith PSQ as the dependent variable and

expectations and objective performance manipulations as

independent variables, indicated a statistically significant

interaction between expectations and perceived performance

(Fdf2;137 7:99, p , 0:001). This outcome confirms thatPSQ is a function of the relationship between expectations

and perceived performance.

The presence of a significant interaction supports thehypothesized moderating role of expectations. Linear

regression was used to further investigate the relationships

between and among expectations, perceived performance,

and PSQ. The data set was split into two groups: one group

consisted of the three experimental cells where the mean

perceived performance score exceeded the mean predictive

expectation score (i.e. positive disconfirmations), while the

other group consisted of the three experimental cells where

the mean predictive expectation score exceeded the mean

perceived performance score (i.e. negative disconfirmations).

Because predictive expectations were hypothesized to be the

major anchor for quality judgments, disconfirmation was

based upon perceived performances relationship with

predictive expectations rather than normative or adequate.

Regression analyses with perceived performance as the

predictor of PSQ were performed on the split data sets.

The results of the regression analyses supported the

hypothesis that expectations moderate the relationship

b et we en p er ce ive d p er fo rma nc e a nd P SQ a s t he

standardized coefficient for perceived performance differed

across the analyses (0.64 for the negative disconfirmation data

set and 0.50 for the positive disconfirmation data set).

Graphing the regression equations shows support for the

hypothesis that the slope of the negative disconfirmation line

is steeper than the slope of the positive disconfirmation line

(see Figure 5). Thus, the data support the hypothesized

moderating role played by expectations in the perceived

performance PSQ relationship. Further, the data support the

hypothesis that performance has a weaker relationship withperceived quality when performance is viewed as a gain rather

than as a loss.


The confirmation conceptualization also hypothesizes that

multiple levels of expectations are related to PSQ and that

predictive expectations are will have the largest effect on

service quality judgments (see H1). These hypotheses were

tested using correlation and regression analyses. Because the

previous analysis demonstrated that expectations are

moderators in the service quality formation process, thesplit data set was used for this analysis as well.

The correlations among the various levels of expectations

and PSQ (see Tables II and III) reveal that multiple levels of

expectations are related to PSQ under both negative and

positive disconfirmation conditions. Under conditions of

negative disconfirmation, predictive expectations and

adequate expectations are significantly related to PSQ

(r 0:69 and 0.58, p2 value 0:000 and 0. 000,respectively). Normative expectations, however, were not

significantly related to PSQ (p . 0:05). Under conditions of

positive disconfirmation, all three levels of expectations are

significantly related to PSQ as correlation coefficients for

normative (0.42), predictive (0.63), and adequate (0.50)

expectations all have p-values ,0.000. So, the data support

the hypothesis that multiple levels of expectations are related

to PSQ.

Regression analysis was used to test the hypothesis that

predictive expectations will have the largest effect on service

quality perceptions. The standardized coefficients among the

various levels of expectations and PSQ (see Tables II and III)

reveal that only predictive expectations are significantly

related to PSQ under both negative and positive

disconfirmation conditions. So, the data do support the

hypothesis that predictive expectations have the largest effect

on PSQ as the standardized coefficients within each

regression equation can be interpreted as indicators of

relative effect size.

Perceived performance as the major predictor of PSQAs discussed previously, many empirical studies have found

perceived performance to be the major predictor of PSQ.

However, the confirmation conceptualization offers an

alternative hypothesis that expectations are a more

significant predictor of quality perceptions than is perceived

performance. To test this alternative, perceived performance

and predictive expectations were used as predictors of PSQ in

regression analyses using the split data set. The results of the

analyses indicate that the predictive level of expectations was a

better predictor of PSQ under conditions of both negative and

positive disconfirmation (see Table IV). Because these results

contradict previous empirical studies, a third regression

analysis using perceived performance and predictive

expectations as predictors of PSQ for the entire data set was

conducted (i.e. negative and positive disconfirmations were

analyzed together). The results of this analysis revealed

perceived performance (b 0:780) to be a better predictorthan predictive expectations (b 0:372) when all cases areanalyzed together. Therefore, using data pooled across

disconfirmation conditions gives results consistent with

previous empirical studies that found perceived performance

to be a better predictor of PSQ than expectations. However,

the results of the present study indicate pooled data analyses

mask the moderating role of expectations and therefore

underestimate the strength of the expectation-PSQ

relationship.

Figure 5 The relationship between perceived performance and PSQunder conditions of negative and positive disconfirmation


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Discussion


Using assimilation-contrast and adaptation-level theories,

multiple levels of expectations were hypothesized to be

related to PSQ. This hypothesis was partially supported by

the present data set as three levels of expectations (normative,

predictive, and adequate) were significantly correlated with

PSQ. Finding significant relationships between multiple levels

of expectations and PSQ is a partial replication of previous

service quality studies that reported similar findings (e.g.

Boulding et al., 1993). However, the present study adds to the

literature by empirically investigating a third level of

expectations adequate expectations and finding it to be

significantly correlated with PSQ. The observation that the

effects of normative and predictive expectations in the present

study are consistent with the effects of these two expectation

standards reported in previous studies lends credibility to the

methodology of the reported study.

The findings of the present study suggest that expectations

exist on a continuum with normative and adequate

expectations as opposite endpoints and predictive

expectations lying in between. This continuum acts as areference range during the service quality formation process.

While the results of the present study are similar to the work

of Zeithaml et al . (1993), there is a major point of

differentiation. The present study views predictive

expectations as a point along the expectation range, while

Zeithaml et al. (1993) conceptualized predictive expectations

as an antecedent of adequate expectations. Viewing predictive

expectations as a point along the continuum is consistent with

assimilation-contrast and adaptation-level theories that

suggest each reference point is a subset of a ubiquitous

reference range.

Predictive expectations as the major anchor for service

quality judgments

In addition to hypothesizing that multiple levels of

expectations are related to PSQ, assimilation-contrast and

adaptation-level theories were used to hypothesize predictive

expectations as the major anchor in the PSQ formation

process. The results of the present study support this

hypothesis as a regression analysis using all three levels of

expectations as predictor variables revealed predictive

expectations to be the only significant predictor of PSQ.

Additionally, the results of the present study successfully

replicated the findings of past service quality studies (e.g.

Boulding et al., 1993). This finding is particularly significant

in light of the manner in which PSQ traditionally has been

Table II Relationship between expectations and PSQ: correlation matrix

Normative expectations Predictive expectations Adequate expectations PSQ

Normative expectations 1.00

Predictive expectations 0.40/0.64 (0.000)/ (0.000) 1.00

Adequate expectations 0.40/0.57 (0.000)/ (0.000) 0.84/0.87 (0.000)/ (0.000) 1.00

Perceived service quality 0.16/0.42 (0.179)/ (0.000) 0.69/0.63 (0.000)/ (0.000) 0.58/0.50 (0.000)/ (0.000) 1.00

Note: Numbers in parentheses represent standardized regression coefficients; negative disconfirmations (n 75)/positive disconfirmations (n 68)

Table III Relationship between expectations and PSQ: standardized regression coefficients for expectations as predictors of PSQ

Negative disconfirmations (n = 75)

R2 = 0.485

PSQ 20:143 normative 0:720 predictive 0:25 adequate

p 0:133 p 0:000 p 0:875

Positive disconfirmations (n = 68)

R2 0:402

PSQ

0:44 normative 0:768 predictive 0:195 adequate

p 0:725 p 0:000 p 0:323

Total data set (n = 143)

R2 0:101

PSQ 20:104 normative 0:559 predictive 20:259 adequate

p 0:280 p 0:001 p 0:127

Note: Numbers in parentheses represent standardized regression coefficients

Table IV Ability of perceived performance and predictive expectationsto predict PSQ

Negative disconfirmation conditions (R2 = 0.61)

PSQ = (0.421) perceived performance + (0.495) predictive expectations

Positive disconfirmation conditions (R2

= 0.49)PSQ(0.336) perceived performance(0.517) predictive expectations

Entire data set (R2 = 0.68)

PSQ = (0.780) perceived performance + (0.372) predicitve expectations

Note: Numbers in parentheses represent standardized regressioncoefficients


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measured. PSQ has most often been measured using the

SERVQUAL instrument that operationalizes expectations at

the normative level. If practitioners w ish to l im it

measurements to only one level of expectations, the results

of this study suggest they should measure consumers

predictive expectations.

The PSQ formation processThe present data support the notions that expectations are

positively related to PSQ and antecedents of service quality

evaluations. Expectations can be considered as equivalent to

pre-encounter perceptions of service quality. These pre-

encounter perceptions are then adjusted, in light of perceived

performance, and become post-encounter perceptions of

quality. This relationship between expectations and PSQ

contradicts the gap conceptualization which views PSQ as the

discrepancy between perceived perform ance and

expectations.

The results of the present study suggest that services

marketing practitioners would maximize PSQ if their

consumers expected high levels of service and received

service that matched their expectations. Encouragingconsumers to have low expectations lowers the starting

point for consumers evaluations of the service. Exceeding

expectations will result in a raising of the consumers

evaluations, but the evaluations will not necessarily increase

substantially (see Figure 5). If consumers expect terrible

service they will perceive (pre-encounter) the service firm as a

relatively low quality service provider. Service firms could

exceed consumers expectations and still be perceived (post-

encounter) as low quality providers of the service. On the

other hand, if consumers expect great service they will

perceive (pre-encounter) that the service firm is a high-quality

service provider. Service firms that tend to meet consumers

expectations in this instance will be perceived as high-quality

service providers (post-encounter), even if there is little or nogap between expectations and performance.

The gap and the confirmation conceptualizations both

hypothesize perceived performance to have a positive effect on

PSQ, and this hypothesis is supported by the present study.

This suggests that PSQ is maximized when both expectations

and perceived performance are high. This relationship is

consistent with Speng et al. (1996), who found raised

expectations may lead to higher perceptions of performance,

and the work of Dawar and Pillutla (2000), who found that

consumers engage in hypothesis confirmation as they tend

to perceive information that is consistent with their

expectations. The present data support the confirmation

conceptualizations notion that perceived performance leads

to an adjustment in perceptions of service quality. That is,

pre-encounter perceptions of service quality are adjusted in

the direction of perceived performance and become post-

encounter perceptions of service quality.

Prospect theory was used to hypothesize that expectations

moderate the relationship between perceived performance

and PSQ. The results of this study support the moderating

expectations hypothesis as changes in perceived performance

had a greater impact on PSQ under conditions of negative

disconfirm ation than under conditions of positive

disconfirmation. From a practitioners point of view, this

conclusion means that the consequences of failing to meet

customer expectations are profound as perceptions of service

quality deteriorate quickly if perceived performance is below

expectations.

The folly of under-promising and over-delivering

The present study, along with other studies in the services

literature (e.g. Boulding et al., 1993), demonstrates that

service quality perceptions result from a dynamic process.

Expectations and perceived performance are used to formperceptions of quality, which are then used to revise

expectations. If a firm delivers a level of service that exceeds

consumers initial expectations in encounter n, consumers will

revise their expectations upward. As these revised

expectations are the starting point for quality perceptions of

encounter n 1, the delivery of the same level of perceivedservice in encounter n 1 will be associated with higher levelsof perceived quality than encounter n. In this manner, over

time expectations will be revised to levels that meet the level

of service a company delivers and quality perceptions will be

maximized at that point. However, under-promising

interferes with the expectation revision process, and

prevents expectations from being raised to the level that is

most beneficial to a firm. Thus, under-promising is likely to

result in lower levels of PSQ.

The confirmation conceptualizations view of the

relationship between expectations and PSQ has clear

implications for services marketing practitioners. The

strategy of service firms should be to encourage consumers

to expect the highest level of service that the company can

consistently deliver. Advertising campaigns, company

brochures, and salespeople should attempt to communicate

accurately to customers the level of service the company

delivers (i.e. the level of service the customer will receive).

Practitioners who are attempting to maximize service quality

perceptions should remember that it is better to meet high

expectations than to exceed low expectations. Promising less

than the company will deliver will unnecessarily limit the level

of service quality customers will perceive. Promising morethan the company will deliver will result in sharply

downgraded perceptions of service quality. Thus, instead of

under-promising and over-delivering, service practitioners

should seek to realistically promise and consistently deliver.

The measurement of PSQ

The service quality literature currently bases the measurement

of PSQ on the gap conceptualization. Thus, the gap between

perceived performance and expectations is taken as a measure

of PSQ. The gap can be obtained by measuring performance

and expectations separately and taking the arithmetic

difference as a measure of PSQ (e.g. SERVQUAL) or by

directly measuring the degree to which performance exceeds

or falls short of expectations.

The findings of the present study suggest that the gap

between perceived performance and expectations is not the

appropriate measure of PSQ. Rather, PSQ is a weighted

average of perceived performance and expectations. The term

weighted average is used to imply that perceived

performance and expectations have different impacts upon

PSQ, and thus should be weighted differently. Therefore,

expectations and perceived performance should be measured

separately and then averaged (using appropriate weights for

each of the two constructs) to obtain a measure of PSQ.

Further, the weights assigned to each of the constructs when

computing the average should vary according to whether


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performance exceeds or falls below expectations. The weight

assigned to perceived performance in instances of negative

disconfirmations should exceed the weight assigned to

p er ce ive d p er fo rma nc e i n i ns ta nc es o f p os it ive

disconfirmation. Varying the weights assigned to perceived

performance will allow the measurement of PSQ to allow for

the differential slopes of the service quality curves for

positively and negative disconfirmations.

Limitations

Perhaps the most noticeable limitation of this study is the use

of a student sample. While care was taken to select a product

category with which students had familiarity, students have

been criticized as inherently inferior to real people for the

purposes of consumer research (see, for example, Wells, 1993;

Winer, 1999). However, Lynch (1999) argues that the use of

students does not inherently limit the external validity of a

study. Rather, external validity is limited if some background

variable held relatively constant by the study interacts with

some internally valid effect. The background variables thatwere likely to be relatively constant due to the use of students

as respondents in the present study include age, education

level, geography, involvement and earned income. The

internally valid effects found in this student are the effect of

expectations on quality perceptions, the effect of perceived

performance on quality perceptions, and the interactive effect

of expectations and perceived performance on quality

perceptions. The author knows of no research that would

suggest that any of the background variables listed above

interact with any of the internally valid effects. One possible

exception is presented by involvement which, intuitively,

could have an effect on the experiments effects. However, as

the experiment investigates an information processing

phenomenon that would seem to operate automatically, theuse of relatively uninvolved students would not seem to be

problematic (Lynch, 1999).

The generalizability of the findings of the present research

study is limited by the use of a laboratory setting. The

laboratory setting is of course an artificial setting and the

respondents were reacting to artificial situations that were

presented to them via written scenarios. The respondents may

have reacted differently if they were actually experiencing the

situations in a real-world setting.

The generalizability of the present research study may also

be limited by the studys experimental design. First, the

experiment used a single service category. Although there is

no reason to believe that the process by which consumers

evaluate the service provided by film developers is differentfrom the process by which consumers evaluate other types of

services, it is unknown whether the results of this study will

hold across all service categories. Second, the present studys

experimental manipulations attempted to manipulate the

expectations construct as a whole, rather than attempting to

manipulate each level of expectations independently. Despite

this limitation, the relationship between the levels of

expectations and perceived quality found in the present data

set are consistent with the same relationships that were found

in other research studies that did manipulate the levels of

expectations separately.

Summary and future research

The confirmation conceptualization makes important

managerial, theoretical, and operational contributions to the

service quality literature. Managerially, the confirmation

conceptualization suggests that service practitioners should

place increased focus on raising their customers expectations

in order to raise their customers perceptions of quality. To

accomplish this objective, research is needed to determine

effective ways to increase consumers expectations. Existing

research (e.g. Zeithaml et al., 1993) suggests that service firms

have control over several variables that can be used to increase

consumer expectations. These variables include advertising,

salesperson communications, price, etc. However, there is no

empirical evidence in PSQ research concerning the relative

effectiveness of these different variables.

Theoretically, the confirmation conceptualization

contributes to the service quality literature by applying

consumer decision making theories to service quality

judgments. Thus, the confirmation conceptualization

provides a theoretically grounded and empirically supported

explanation of the service quality formation process. The

application of consumer decision making theories has also ledto a more complete understanding of the role played by

expectations in the formation of service quality perceptions.

The confirmation conceptualization suggests that the various

levels of expectations are parts of a single reference range.

However, more research that views expectations as a range

rather than discrete points is needed. Further, while the

confirmation conceptualization is supported by the present

data set, replications of the present study using a different

methodology may provide insight into the external validity of

the findings.

The present study offers considerable evidence of the

significant role played by expectations in the formation of

service quality perceptions. However, the work of Dawar and

Pillutla (2000) suggests that role of expectations is amplifiedwhen consumers are presented with ambiguous stimuli. As

the present studys experimental manipulation was designed

to present material in an unambiguous manner, the

methodology used may have resulted in an underestimate of

the impact of expectations on service quality perceptions.

Thus, a survey methodology may result in data that suggest

the role of expectations is more significant than implied by the

present data.

Operationally, the confirmation conceptualization suggests

that PSQ should not be measured as the arithmetic difference

between performance and expectations. Rather, perceived

performance and expectations should be averaged to measure

PSQ. While this change is theoretically significant, it is

computational from a measurement point of view. Traditional

administration of existing instruments (e.g. SERVQUAL) can

be used to effectively measure perceptions of quality.

However, expectations and perceived performance should

be measured separately (as opposed to a direct measurement

of disconfirmation) and their scores should be averaged rather

than subtracted.

Notes

1 Measuring the disconfirmation directly avoids the

problems associated with difference scores (for a

thorough discussion of the limitations of difference


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13/14

Speng, R.A., MacKenzie, S.B. and Olshavsky, R.W. (1996),

A reexamination of the determinants of consumer

satisfaction, Journal of Marketing, Vol. 60, July, pp. 15-32.

Swan, J.E. and Trawik, I.F. (1980), Satisfaction related to

predictive vs desired expectations, in Hunt, H.K. and Day,

R.L. (Eds), Refining Concepts and Measures of Consumer

Satisfaction and Complaining Behavior, School of Business,

Indiana University, Bloomington, IN, pp. 7-12.Teas, K.R. (1993), Expectations, performance evaluations,

and consumers perceptions of quality, Journal of

Marketing, Vol. 57, October, pp. 18-34.

Tse, D.K. and Wilton, P.C. (1988), Models of consumer

satisfaction formation: an extension, Journal of Marketing

Research, Vol. 25, May, pp. 204-12.

Voss, G.B., Parasuraman, A. and Grewal, D. (1998),

The roles of price, performance, and expectations in

determining satisfaction in service exchanges, Journal of

Marketing, Vol. 62, October, pp. 46-61.

Wells, W.D. (1993), Discovery-oriented consumer research,

Journal of Consumer Research, Vol. 19, March, pp. 489-504.

Winer, R.S. (1999), Experimentation in the 21st century:

the importance of external validity, Journal of Consumer

Research, Vol. 27 No. 3, pp. 349-58.

Zeithaml, V.A., Berry, L.L. and Parasuraman, A. (1993),

The nature and determinants of customer expectations of

service, Journal of the Academy of Marketing Science, Vol. 21,

Winter, pp. 1-12.

Zeithaml, V.A., Berry, L.L. and Parasuraman, A. (1988),

Communication and control processes in the delivery of

service quality, Journal of Marketing, Vol. 52, April,

pp. 35-48.

Zeithaml, V.A., Parasuraman, A. and Berry, L.L. (1990),

Delivering Quality Service: Balancing Customer Perceptions

and Expectations, The Free Press, New York, NY.

Corresponding author

Lawrence O. Hamer can be contacted at: [email protected]

Executive summary and implications formanagers

This summary has been provided to allow managers and executives

a rapid appreciation of the content of the article. Those with a

particular interest in the topic covered may then read the article

in toto to take advantage of the more comprehensive description of

the research undertaken and its results to get the full benefit of the

material present.


If you dont expect too much youll never be disappointed

may be a pessimistic approach to life, but it is one which some

firms seem to have adopted as part of their business strategy.

The basic idea being that if you deliberately lower the

expectations of your potential customers youll give them a

pleasant surprise when it turns out your service is better than

they thought.

A clever marketing ploy? Well, many people seem to think

so, and service literature does advise practitioners to make

sure the service perform ance exceeds customers

expectations. However, Lawrence O. Hamer says that

f ollowing such advice w il l ensure that consumers

perceptions will not, in fact, be maximised as it is based on

a faulty conceptualization of the service quality formation

process. He argues that service firms strategy should be to

encourage consumers to expect the highest level that the

company can deliver, and that advertising campaigns,

company brochures and salespeople should attempt to

communicate accurately to customers the level of service

the company delivers.

High evaluations of service are thought to result fromconsumers perceiving the delivered service as being better

than expected, and low evaluations from perceptions of the

service being worse than expected with the consequent

temptation to under-promise and over-deliver.

Different types of consumer expectations have been

identified including normative, predictive and minimal

and all have their different characteristics. The normative

standard is generally defined as the level at which the

customer wants the product to perform or the service to be

delivered a sort of wished for result.

However, these tend to have a negative effect on

perceptions of the received service or product performance.

In other words people are wishing for more than they can

realistically expect. Predictive expectations are of the level of

service consumers expect to receive from a given service

provider in a given situation (and tend to be lower than

normative expectations) and have been found to have a

positive relationship with the service evaluations. In other

words many people have a pretty good idea of what service

theyre likely to get in given circumstances. Minimal

expectations represent the consumers perceptions of the

lowest acceptable level of service.

Lawrence O. Hamer says that rather than being a function

of the gap between expectations and performance, service

quality perceptions result from a process of confirmation.

Th e ma na ge ri al i mp li ca ti on s o f a c on fir ma ti on

conceptualization suggest that lowering consumers

expectations will result in lower quality perceptions and high

expectations of service performance will be associated withhigh perception of service quality. Consequently, rather than

trying to maximize the gap between the delivered service and

expectations, practitioners should attempt to eliminate this

gap by raising expectations.

If a firm delivers a level of service that exceeds consumers

initial expectations, consumers will revise their expectations

upwards and those revised expectations become their starting

point for quality perceptions of the next encounter. If, in the

following encounter, the same delivery of service is

perceived, it will be associated with higher levels of

perceived quality than the first encounter. In this manner,

over time, expectations will be raised to levels that meet the

level of service a company delivers and quality perceptions

will be maximized at that point. However, under-

promising interferes with the expectation revision process

and prevents expectations from being raised to the level that

is most beneficial to a firm. Therefore under-promising is

likely to result in lower levels of perceived service quality

(PSQ).

The confirmation conceptualizations view of the

relationship between expectations and PSQ has clear

implications for services marketing practitioners.

Practitioners who are attempting to maximize service quality

perceptions should remember that it is better to meet high

expectations than to exceed low ones. Promising less than the

company will deliver will unnecessarily limit the level of


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service quality customers will perceive. Promising more than

the company will deliver will result in sharply downgraded

perceptions of service quality. So, instead of under-

promising and over-delivering, service practitioners should

seek to realistically promise and consistently deliver.

In highlighting the significant role played by expectations in

the formation of service quality perceptions, the author

concludes: Managerially, the confirmation conceptualization

suggests that service practitioners should place increased

focus on raising their customers expectations in order to raise

their customers perceptions of quality. To accomplish this

objective, research is needed to determine effective ways to

increase consumers expectations.

(A precis of the article A confirmation perspective on perceived

service quality. Supplied by marketing Consultants for Emerald.)


Lawrence O. Hamer



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