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CHAPTER II

REVIEW OF LITERATURE

Last chapter deals with the introduction part. Now the researcher is going to include the

review of literature he has collected during his studies

Review of literature includes, the current knowledge including substantive findings, as

well as theoretical and methodological contributions to particular topic. The researcher has

collected as many literatures as possible, related to customer satisfaction, client satisfaction,

shipping and logistics.

Moritz Fleischmann, Jacqueline M. Bloemhof-Ruwaard, and Rommert Dekker in their

article Reverse logistics, published in the International logistic journal, vol.16 on 2012 surveys

the recently emerged field of reverse logistics. The management of return flows induced by the

various forms of reuse of products and materials in industrial production processes has received

growing attention throughout this decade. Many authors have proposed quantitative models

taking those changes in the logistics environment into account. However, no general

framework has been suggested yet. Therefore the time seems right for a systematic overview

of the issues arising in the context of reverse logistics. In this paper we subdivide the field into

three main areas, namely distribution planning, inventory control, and production planning. For

each of these we discuss the implications of the emerging reuse efforts, review the

mathematical models proposed in the literature, and point out the areas in need of further

research. Special attention is paid to differences and/or similarities with classical forward

logistics methods

Brooks M R in his research paper, Sea Change in Liner Shipping. Regulation and

Managerial Decision-making in a Global Industry published in International maritime

journal, vol.24, discusses the following

Transport policy is undergoing major changes which transcend national boundaries.

Meanwhile, strategic alliances and mergers are changing the face of the liner shipping business.

A re-examination of competition policy as it relates to liner shipping is underway. This research

not only examines the changing regulatory climate for the liner shipping industry but also

explores managerial thinking about cooperation and competition within the industry. Using

comparisons from the rail and aviation industries, the research paper develops guiding

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principles for a common regulatory policy for liner shipping while proposing a framework for

shipping managers to guide strategy formulation and implementation in this new business

environment. This explores the issues of national regulation of liner shipping in three legal

jurisdictions: the US. Europe and Canada.

In the paper A study on bunker fuel management for the shipping liner services,

published in Computers & Operations Research, 2012 Elsevier the researcher Zhishuang Yao

consider a bunker fuel management strategy study for a single shipping liner service. The

bunker fuel management strategy includes three components: bunkering ports selection (where

to bunker), bunkering amounts determination (how much to bunker) and ship speeds

adjustment (how to adjust the ship speeds along the service route). As these three components

are interrelated, it is necessary to optimize them jointly in order to obtain an optimal bunker

fuel management strategy for a single shipping liner service. As an appropriate model

representing the relationship between bunker fuel consumption rate and ship speed is important

in the bunker fuel management strategy. They first studied in detail this empirical relationship

and found that the relationship can be different for different sizes of containerships and provide

an empirical model to express this relationship for different sizes of containerships based on

real data obtained from a shipping company. The research further highlight the importance of

using the appropriate consumption rate model in the bunker fuel management strategy as using

a wrong or aggregated model can result in inferior or suboptimal strategies. The research also

suggest a planning level model to determine the optimal bunker fuel management strategy, i.e.

optimal bunkering ports, bunkering amounts and ship speeds, so as to minimize total bunker

fuel related cost for a single shipping liner service. Based on the optimization model, they

studied the effects of port arrival time windows, bunker fuel prices, ship bunker fuel capacity

and skipping port options on the bunker fuel management strategy of a single shipping liner

service.

Eugene W Andreson in his paper Customer satisfaction market share and profitability

published in the Journal of Marketing , Vol. 58, No. 3 (Jul., 1994), pp. 53-66 says that, Many

firms that are frustrated in their efforts to improve quality and customer satisfaction are

beginning to question the link between customer satisfaction and economic returns. The

researcher investigate the nature and strength of this link. They discuss how expectations,

quality, and price should affect customer satisfaction and why customer satisfaction, in turn,

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should affect profitability; this results in a set of hypotheses that are tested using a national

customer satisfaction index and traditional accounting measures of economic returns, such as

return on investment. The findings support a positive impact of quality on customer

satisfaction, and, in turn, profitability. The researcher demonstrate the economic benefits of

increasing customer satisfaction using both an empirical forecast and a new analytical model.

In addition, they discuss why increasing market share actually might lead to lower customer

satisfaction and provide preliminary empirical support for this hypothesis. Finally, two new

findings emerge: First, the market's expectations of the quality of a firm's output positively

affects customers' overall satisfaction with the firm; and second, these expectations are largely

rational, albeit with a small adaptive component.

A study on the topic The Impact of Customer Satisfaction and Relationship Quality on

Customer Retention conducted by Thorsten Hennig-Thurau and Alexander Klee submitted to

the University of Hanover describes the following

Customer satisfaction with a companys products or services is often seen as the key to a

companys success and long-term competitiveness. In the context of relationship marketing,

customer satisfaction is often viewed as a central determinant of customer retention. However,

the few empirical investigations in this area indicate that a direct relationship between these

constructs is weak or even nonexistent. The overall purpose of this article is to develop a

conceptual foundation for investigating the customer retention process, with the use of the

concepts of customer satisfaction and relationship quality. The article involves a critical

examination of the satisfactionretention relationship, and the development of a more

comprehensive view of the customers quality perception.

J. Joseph Cronin, Jr. is Professor of Marketing, College of Business, Florida State

University in his study, Assessing the effects of quality, value, and customer satisfaction on

consumer behavioral intentions in service environments, published in Journal of Retailing

Volume 76, Issue 2, discuss the following,

The study synthesizes and builds on the efforts to conceptualize the effects of quality,

satisfaction, and value on consumers behavioral intentions. Specifically, it reports an empirical

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assessment of a model of service encounters that simultaneously considers the direct effects of

these variables on behavioral intentions. The study builds on recent advances in services

marketing theory and assesses the relationships between the identified constructs across

multiple service industries. Several competing theories are also considered and compared to

the research model. A number of notable findings are reported including the empirical

verification that service quality, service value, and satisfaction may all be directly related to

behavioral intentions when all of these variables are considered collectively. The results further

suggest that the indirect effects of the service quality and value constructs enhanced their

impact on behavioral intentions.

Gilbert A. Churchill, Jr. and Carol Surprenant in their journal, An Investigation into

the Determinants of Customer Satisfaction, published in the Journal of Marketing Research

Vol. 19, No. 4, Special Issue on Causal Modeling (Nov., 1982) investigate whether it is

necessary to include disconfirmation as an intervening variable affecting satisfaction as is

commonly argued, or whether the effect of disconfirmation is adequately captured by

expectation and perceived performance. Further, they model the process for two types of

products, a durable and a nondurable good, using experimental procedures in which three levels

of expectations and three levels of performance are manipulated for each product in a factorial

design. Each subject's perceived expectations, performance evaluations, disconfirmation, and

satisfaction are subsequently measured by using multiple measures for each construct. The

results suggest the effects are different for the two products. For the nondurable good, the

relationships are as typically hypothesized. The results for the durable goods are different in

important respects. First, neither the disconfirmation experience nor subjects' initial

expectations affected subjects' satisfaction with it. Rather, their satisfaction was determined

solely by the performance of the durable good.

Taylor and Francis in their article Customer Satisfaction, Customer (Action) Loyalty and

Customer Profitability at the Individual Level published in the journal of marketing

management describes that Customer loyalty is supposed to be positively related to

profitability. The link between satisfaction, loyalty and profitability is perceived to be so self-

evident that the relationship often is taken for granted. Nevertheless, only a few studies have

examined this fundamental relationship. Here the focus is on the individual customer with

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respect to the links between customer satisfaction, customer (action) loyalty and customer

profitability. The following hypotheses are tested; H1: The more satisfied a customer tends to

be, the higher is the loyalty of the customer; H2: The more loyal a customer tends to be, the

higher customer profitability is obtained. As expected, the results provide strong support for

the hypotheses. However, the relationships between the variables seem to be non-linear

(increasingly downward sloping), and only valid beyond certain levels or thresholds. Besides,

the explanatory powers of the individual variables are rather low.

Peter C. Verhoef (2003) in his article Understanding the Effect of Customer Relationship

Management Efforts on Customer Retention and Customer Share Development published in

the Journal of Marketing: October 2003, Vol. 67, No. 4, pp. 30-45 have questioned the

effectiveness of several customer relationship management strategies. The author investigates

the differential effects of customer relationship perceptions and relationship marketing

instruments on customer retention and customer share development over time. Customer

relationship perceptions are considered evaluations of relationship strength and a suppliers

offerings, and customer share development is the change in customer share between two

periods. The results show that affective commitment and loyalty programs that provide

economic incentives positively affect both customer retention and customer share

development, whereas direct mailings influence customer share development. However, the

effect of these variables is rather small. The results also indicate that firms can use the same

strategies to affect both customer retention and customer share development.

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References

Journals:

Moritz leischmann, Jacqueline M. Bloemhof- Ruwaard, and Rommert Dekker

International logistic journal(2012) , Reverse logistics, vol.16

Brooks M R, Sea Change in Liner Shipping. Regulation and Managerial Decision-

making in a Global Industry, International maritime journal, vol.24

Zhishuang Yao, A study on bunker fuel management for the shipping liner services,

Computers & Operations Research, 2012

J. Joseph Cronin, Assessing the effects of quality, value, and customer satisfaction on

consumer behavioral intentions in service environments, Journal of Retailing Volume

76, Issue 2

Gilbert A. Churchill, Jr. and Carol Surprenant, An Investigation into the Determinants

of Customer Satisfaction, Journal of Marketing Research Vol. 19, No. 4, Special Issue

on Causal Modeling (Nov., 1982)

Taylor and Francis ,Customer Satisfaction, Customer (Action) Loyalty and Customer

Profitability at the Individual Level p, Journal of marketing management

Peter C. Verhoef (2003) Understanding the Effect of Customer Relationship

Management Efforts on Customer Retention and Customer Share Development,

Journal of Marketing: October 2003, Vol. 67, No. 4, pp. 30-45

Research papers:

Thorsten Hennig-Thurau and Alexander Klee, The Impact of Customer Satisfaction and

Relationship Quality on Customer Retention, University of Hanover 2008

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