Service Quality and Satisfaction in Business to Business Service

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Service quality and satisfaction inbusiness-to-business services

Richard A. Spreng

Eli Broad College of Business, Michigan State University, East Lansing, Michigan, USA

Linda Hui Shi

Faculty of Business, University of Victoria, Victoria, Canada, and

Thomas J. Page

Eli Broad College of Business, Michigan State University, East Lansing, Michigan, USA

AbstractPurpose The purpose of the paper is to investigate the effects of service quality and service satisfaction on intention in a business-to-businesssetting.Design/methodology/approach This research addresses three unanswered questions regarding satisfaction and service quality: the distinctionbetween customer satisfaction and perceived service quality; their causal ordering; and their relative impact on intentions. The data were collectedusing a large survey of buyers in a business setting.Findings The data were analyzed using structural equation modeling. The results show that service quality has a larger impact on intentions than

does customer satisfaction. The results also show that the effects of individual transactions on intentions are mediated by corresponding cumulativeconstructs.Research limitations/implications The primary implications for theory include demonstrating the distinction between satisfaction and servicequality; specifying, based on theory and logic, the causal ordering between transaction constructs and cumulative constructs, and between servicequality and satisfaction; and assessing their relative impact on behavioral intentions.Originality/value The results show that one negative transaction outcome may not be sufficient to cause the customer to switch if the cumulativelevels are sufficiently positive. Thus, a negative outcome may be discounted by the user if it is seen as a unique occurrence. However, a series ofsuccessive negative transaction outcomes may cause the cumulative constructs to become less positive, resulting in lower intentions to repurchase fromthe same supplier.

Keywords Customer satisfaction, Customer services quality, Business-to-business marketing

Paper type Research paper

An executive summary for managers and executive

readers can be found at the end of this article.

Introduction

The fundamental proposition in customer satisfaction and

service quality research is that high customer satisfaction (CS)

and perceived service quality (PSQ) lead to high customer

repurchase intention (e.g. Heskett et al., 1994; Rust et al.,

1995; Oliver, 1997). Although PSQ and CS to retention links

have been studied extensively, the vast majority of PSQ and

CS research has been done in the business-to-consumer

(B2C) context (Paulssen and Birk, 2007). It is crucial to

determine whether the CS and PSQ to intention links are alsorelevant in business-to-business settings because these

linkages may directly influence economic return (Anderson

et al., 1994; Luo and Bhattacharya, 2006). Previous research

has shown that the findings in a consumer setting may be able

to be translated into an organizational setting (Cooper and

Jackson, 1988; Durvasula et al., 1999). In this study, we

investigate the relative impacts of CS and PSQ in a business-

to-business setting. While we acknowledge that marketing

researchers have paid increasing attention to PSQ and CS in

the business-to-business setting (Chandrashekaran et al.,

2007; Lam et al., 2004; Liu et al., 2003; Gounaris, 2005;

Rauyruen and Miller, 2007; Jayawardhena et al., 2007;

Patterson and Spreng, 1997; Patterson et al., 1997), the exact

nature of the relationship between PSQ, CS, and behavioral

intentions in a business-to-business context leaves several

questions unanswered.

The extensive research on PSQ and CS in a consumercontext provides some understanding of these constructs.

Research has examined:. the conceptual distinction between CS and PSQ (for a

review, see Oliver, 1997);. the causal ordering between them (e.g. Teas, 1993); and. the relative impact of the two on behavioral intentions

(e.g. Cronin and Taylor, 1992).

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

www.emeraldinsight.com/0885-8624.htm

Journal of Business & Industrial Marketing

24/8 (2009) 537548

q Emerald Group Publishing Limited [ISSN 0885-8624]

[DOI 10.1108/08858620910999411]

Received: April 2008Revised: August 2008Accepted: October 2008

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Furthermore, both PSQ and CS have been conceptualized as

episode (transaction) specific and as cumulative (global)

evaluations that result from a number of transactions. In spite

of these studies, much confusion remains. In addition, this

research has not generally been applied to business-to-

business settings.

The purposes of this paper are:.

to review the conceptual distinctions and causal orderingbetween PSQ and CS both at the transaction specific and

cumulative levels;. to develop an integrative model that includes behavioral

intentions as well as PSQ and CS; and. to test the proposed relationships in a business-to-business

context.

The paper is organized as follows. First, we review relevant

literature in both the service quality and satisfaction areas.

Second, the proposed model linking PSQ, CS, and intentions is

developed. Next, themethod used to test themodelis described.

Finally, the results of the test of the proposed model are

presented, followed by a discussion of the results. Our research

possesses both theoretical and managerial implications.

Review of PSQ and CS literature

The first task is to distinguish between PSQ and CS. To do

this, we adopt the accepted proposition that PSQ is primarily

a cognitive concept, while CS is more affective in nature

(Parasuraman et al., 1988; Bolton and Drew, 1991a, b;

Boulding et al., 1993; Yi, 1990).

Perceived service quality

Parasuraman et al. (1988) defined PSQ as a global judgment

or attitude relating to the superiority of the service (p. 16).

Similarly, Oliver (1997, p. 27) defined PSQ as a judgment of

performance excellence. More specifically, Oliver (1994)

suggested that quality is largely a performance assessment and

it relies on evaluation of performance excellence criteria. Also,de Ruyter and Wetzels (1998) implied that PSQ is a

mathematical evaluation or judgment. Thus, it appears that

PSQ is conceptualized as either a judgment or an appraisal

variable (Cronin and Taylor, 1992; Gotlieb et al., 1994).

Customer satisfaction

In contrast, CS is usually considered to be a more affective

concept. Many customer satisfaction researchers have defined

CS as an affective response (e.g. Cadotte et al., 1987; Oliver,

1989; Spreng et al., 1996; Westbrook and Reilly, 1983). For

example, Westbrook (1987) argued that both positive and

negative affect are directly related to the favorability of

customer satisfaction. This belief is further affirmed by the

affective-processing mechanisms proposed by Cohen and

Areni (1991), in which they propose that emotions will leave

strong affective traces in consumers memory which can be

retrieved w hen a consumer evaluates the relevant

consumption experience. Finally, Oliver (1989 p. 1) states

that CS is an affective, or emotional response.

Conceptual distinctions

There are empirical findings supporting the view that PSQ is

primarily a cognitive concept while CS is more affective in

nature. For example, Oliver (1994) found that PSQ was

influenced by performance (cognitive judgments) but not by

affective constructs (negativeor positive affect), whereas CS was

affected by both cognitive (disconfirmation) and affective

antecedents.

Other distinctions between PSQ and CS have also been

proposed. While these distinctions are still being debated in

the literature, they are worth highlighting here. First, some

researchers have suggested a difference in temporalfocus, with

PSQ being primarily a long-term, cumulative concept, while

CS is more episode-specific or transactional (Bitner, 1990;Boulding et al., 1993; Cronin and Taylor, 1992). In other

words, CS refers to an evaluation of a specific service

transaction (transaction CS), while PSQ refers to a judgment

made after multiple transactions over time, and is cumulative

in nature (cumulative PSQ). However, criticisms of this

argument have emerged from both the service quality

literature and the customer satisfaction literature. In the

service quality literature, Teas (1993, p. 30) challenges this

t emp ora l fo cu s v ie w b y s ta ti ng t ha t P SQ c an b e

operationalized as either transaction specific quality or

relationship quality. Consistent with Teass (1993)

contention, Parasuraman et al . (1994) also argue that

service quality can be operationalized as either a transaction

or as a cumulative construct. Similarly, in the customer

satisfaction literature, researchers maintain that CS can be

treated as either a transaction specific concept or a cumulative

evaluation after multiple transactions (Anderson et al., 1994;

Fornell, 1992). Empirically, CS has been operationalized as

transaction CS (Cadotte et al., 1987; Oliver, 1980; Spreng

et al., 1996; Tse and Wilton, 1988; Westbrook, 1987) and as

cumulative CS (e.g. Anderson et al., 1994; Fornell, 1992).

Thus, it is difficult to argue that temporal focus is a means of

distinguishing between CS and PSQ.

A second distinction that has been suggested is that the

standard of comparison is different in each case (Bitner, 1990;

Oliver, 1993, 1997; Parasuraman et al., 1988; Zeithaml et al.,

1993). This perspective argues that the standard for CS is

predictive expectations, while the standard for PSQ is the

consumers belief about what a service provider shouldprovide(Parasuraman et al., 1988). However, Spreng and Mackoy

(1996) challenged the comparison standard view based on

their empirical finding that desires congruency influences

both CS and PSQ. In addition, a great deal of research in

customer satisfaction has challenged the view that CS is

formed solely through the disconfirmation of predictive

expectations, and has found support for competitive-based

norms (Cadotte et al., 1987) and desires (Spreng and

Olshavsky, 1993) as a basis for CS. Thus, as with temporal

focus, it is difficult to argue that the standard of comparison can

reliably distinguish between PSQ and CS.

In summary, we support the argument that PSQ is a

judgment of performance, while CS is an affective construct.

Specifically, transaction PSQ is defined as a judgment of

performance excellence based on the customers last

experience (Oliver, 1997). Cumulative PSQ is a judgment

of performance excellence based on all of the customers

experience with a particular product or service (Oliver, 1997).

Transaction CS is an affective state that is the emotional

reaction to the customers last product or service experience

(Oliver, 1980). Cumulative CS is an affective state that is the

emotional reaction to all of the customers experience with a

particular product or service (Oliver, 1980).

As mentioned earlier, there has been little research

examining PSQ and CS in a business-to-business setting.

There are reasons to believe, however, that the relationships

Service quality and satisfaction in business-to-business services

Richard A. Spreng, Linda Hui Shi and Thomas J. Page


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among the constructs may be different in a business-to-

business versus consumer setting, and even between different

functional areas within a given firm (Chakraborty et al.,

2007). Fern and Brown (1984) advocate the industrial/

consumer dichotomy in that there are significant differences

between organizational versus consumer marketing. Others,

however, argue that there are more similarities than

differences between organizational versus consumermarketing (Andrus and Norvell, 1990; Coviello and Brodie,

2001; Dawes and Patterson, 1988). Miciak and Desmarais

(2001) found support for both propositions, but generally

supported the industrial/consumer dichotomy. This difference

might manifest itself, for example, in the impact of PSQ.

Since organizational buying often involves more face-to-face

contact between buyers and sellers, this increased interaction

may increase the overall importance of PSQ. However, given

the limited guidance from B2B research, the model

development below will be based primarily on research in

B2C settings, except where relevant B2B research exists.

Model development

Causal ordering of PSQ and CS

There is considerable debate concerning the causal ordering

of PSQ and CS. Table I summarizes research since 1992 that

has looked at both constructs. Among those studies that have

examined the ordering, some researchers contend that CS!

PSQ based on the assumption that CS is an effect of

disconfirmation of a single transaction and quality perception

(PSQ) is an effect of multiple satisfactory/dissatisfactory

service transactions (CS) (Bitner, 1990; Bolton and Drew

1991a, b). Note that this argument relies on the temporal

order perspective in distinguishing between PSQ and CS.

That is, based on the contention that CS is a transaction

evaluation and PSQ is a cumulative evaluation, this ordering

suggests that the transaction construct (claimed to be CS)

leads to the cumulative construct (claimed to be PSQ). Asstated above, however, both PSQ and CS can be either a

transaction or a cumulative evaluation.

Others, however, contend that PSQ!CS. Oliver (1997,

p. 184) stated thatquality is one of thekey dimensions that are

factored into the consumers satisfaction judgment, and based

this in part on the definition of quality from the International

Organization for Standardization that states: Quality is the

totality of features and characteristics of a product or service

that bear on its ability to satisfy stated and implied needs. In a

conceptual model that integrates PSQ/CS research streams,

Oliver ( 19 93 ) suggests that CS is a f unction of the

disconfirmation of predictive expectations regarding both

quality and non-quality dimensions, and therefore specifies

PSQ as an antecedent of CS. Spreng and Mackoy (1996) tested

this model and found that PSQ was an antecedent of overall

satisfaction. As shown in Table I, there are a number of

empirical findings supporting this ordering. Forexample, Brady

and Robertson (2001) empirically tested two models

(PSQ!CS and CS!PSQ) and found better fit and higher

explained variance for a model specifying PSQ!CS.

Finally, several studies proposed a reciprocal relationship

between CS and PSQ such that PSQ!CS and CS!PSQ,

but all found only the PSQ!CS path to be significant (e.g.

Cronin and Taylor, 1992; de Ruyter et al., 1997; Gotlieb et al.,

1994). Note that Cronin and Taylor (1992) and de Ruyter

et al. (1997) operationalized both constructs as cumulative,

while Gotlieb e t al . (1994) operationalized both as

transaction-specific. In each case only the PSQ!CS link

was significant.

Model to be tested and hypotheses

Figure 1 shows the model to be tested. After briefly describing

the overall model, each of the linkages will be discussed. There

are two overriding rationales for the proposed model. First,transaction constructs come before the cumulative constructs,

because cumulative constructs are based on a series of specific

transactions (Holmlund, 2004; Oliver, 1997). Oliver (1997)

suggested a model in which transaction constructs lead to

cumulative constructs. However, this logic does not require

either PSQ or CS to come first. That is, either PSQ or CS can

come first, but the transaction construct is an antecedent of the

cumulative construct. Thus, transaction PSQ has to be an

antecedent of cumulative PSQ and transaction CS has to be an

antecedent of cumulative CS.

Second, based on the arguments above, we specify PSQ as

an antecedent of CS. As stated above, research has generally

supported a PSQ!CS order over a CS!PSQ order. The

causal ordering, however, must be based on logical or

conceptual grounds rather than empirical findings. Given our

earlier argument that PSQ is a cognitive evaluation while CS

is an affective reaction, we adopt the view that PSQ is an

antecedent of CS. The basic rationale for this is based on

cognitive appraisal theories of emotions. A number of

emotion theorists have developed and tested cognitive-

appraisal theories of emotions (for reviews, see for example

Omdahl, 1995; Nyer, 1997; Bagozzi et al., 1999). These

theories claim that emotions are the result of cognitive

processing that follows exposure to a stimulus. That is, the

cognitive appraisal of the situation evokes an individuals

emotional response (Lazarus, 1991). Bagozzi (1992) utilized

this perspective and suggested a causal chain of a cognitive

appraisal which leads to an emotional response which then

leads to behavioral intentions. The Bagozzi (1992) frameworkcan be applied to PSQ/CS context because, as discussed

above, PSQ is an appraisal construct (Parasuraman et al.,

1988; Bolton and Drew 1991a, b), while CS is an affective

construct (e.g. Cadotte et al., 1987; Oliver, 1989; Spreng

et al., 1996; Westbrook and Reilly, 1983). Therefore, the

sequence proposed by Bagozzi (1992) i.e. a cognitive

appraisal! emotional response! coping behavior, can be

translated into PSQ!CS! intentions. The rationale for the

remaining linkages is presented below.

Antecedents of behavioral intentions

Both cumulative PSQ (Path A) and cumulative CS (Path B)

are proposed antecedents of behavioral intentions. The more

satisfied the customer is with a series of transactions, and the

higher the perceived level of service quality over a series of

transactions, the higher the level of intentions to repurchase

from the same source. Taylor and Baker (1994) found in four

customer service industries that CS had a stronger effect on

intentions in each industry, and for two of the industries the

effect of PSQ was non-significant. Cronin and Taylor (1992)

operationalized both constructs as cumulative evaluations and

in four customer service industries found that cumulative CS

had a stronger effect on behavioral intentions than did PSQ.

Similarly, Cronin et al. (2000) tested several competing

models for CS/PSQ, and found the model fit was best when

direct paths from bothPSQ andCS to intentions were included,




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andalso found thatthe effectof CSon intentionwas stronger. In

addition, some theoretical studies suggest that affect will serve

as a primary motivator of future behaviors (e.g. Woodruff,

1993; Abelson et al., 1982). For example, Allen et al. (1992)

found that emotions serve as a better predictor of intentions

than did cognitive evaluations. However, in a recent

longitudinal study, Homburg e t a l. (2006) empirically

supported the notion that as experience accumulates, the

impact of affective constructs on customer evaluation decreases

and the impact of cognitive constructs increases.

The studies discussed above were all carried out in a setting

in which the individual consumer was the beneficiary of the

service rather than in a business-to-business setting. The

studies that have looked at this relationship in a business-to-business setting have found mixed results. Patterson and

Spreng (1997) and Patterson et al. (1997) found that CS has a

strong positive effect on intention, but did not include PSQ in

their model. In a business-to-business setting, it seems logical

to expect that the more rational cognitive aspects of the

decision may outweigh the affective aspects, particularly in

cases where the purchasing agent is not the end user, as is

often the case in a business-to business setting (Chakraborty

et al., 2007). This would result in cumulative PSQ having a

stronger effect on intentions than cumulative CS. This has

been confirmed in a business-to-business study done by

Wathne et al. (2001). They tested empirically how cognitive

and affective constructs influence choice in the context of

business-to-business services. They found that the cognitiveconstruct of service is more important than the affective

construct of interpersonal relationship satisfaction in

influencing choice. Since the relative effects of CCS and

CPSQ are not totally clear, we will base our hypothesis on the

majority of the literature and propose that CCS will have a

stronger effect on behavioral intentions than CPSQ. This

leads to our first three hypotheses:

H1a. Cumulative PSQ will have a positive effect on

behavioral intentions. Path A.

H1b. Cumulative CS will have a positive effect on behavioral

intentions. Path B.

H1c. Cumulative CS will have a stronger relationship with

behavioral intentions than will cumulative PSQ.

Antecedents of cumulative CS and cumulative PSQ

As noted above, Oliver (1997) proposed a model in which

transaction PSQ has an effect on cumulative PSQ, and

transaction CS has an effect on cumulative CS. Several other

customer satisfaction researchers have suggested a similar set

of relationships (e.g. Teas, 1993; Oliver, 1997; Parasuraman

et al., 1994). While it may seem tautological to propose that

transaction based constructs are antecedents of cumulative

based constructs, it is not necessarily clear how this process

occurs. Holmlund (2004) suggested that transaction-basedconstructs (i.e. episodes) are antecedents of cumulative-based

construct (i.e. sequence), but it is not necessarily a simple

additive process and the cumulative effects will depend

heavily on how the individual transactions are aggregated.

Holmlund (2004, p. 282) states that [I]nterrelated episodes

can in turn be correspondingly grouped into a sequence,

which forms a still larger and more extensive entity on a

higher interaction level. Thus, some episodes may be

weighted much more heavily than others while others may

be completely ignored in arriving at cumulative responses.

Based on the above empirical findings and our argument that

transaction constructs come before cumulative constructs,

and PSQ leads to CS, we propose that:. transaction PSQ is an antecedent of cumulative PSQ

(Path D);. transaction CS is an antecedent of cumulative CS

(Path E);. cumulative PSQ is an antecedent of cumulative CS

(Path C); and. transaction PSQ is an antecedent of transaction CS

(Path F).

H2a. Transaction PSQ will be positively related to

cumulative PSQ. Path D.

H2b. Transaction CS will be positively related to cumulative

CS. Path E.

Figure 1 Proposed Model and Hypothesis




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H2c. Cumulative PSQ will be positively related to

cumulative CS. Path C.H2d. Transaction PSQ will be positively related to

transaction CS. Path F.

Method

Study design

Data were collected from internal customers of the

distribution center of a large state agency using a written

survey. The distribution center is responsible for purchasing,

inventory management, and distribution of a wide variety of

equipment and supplies for the agency. A major responsibility

of the center is that of purchasing, processing nearly 2,000

purchase orders a year and maintaining numerous contracts

for the state agency. The data consisted of evaluations by

employees of 26 different departments of the state agency

concerning their experiences with the distribution center. It

should be noted that for some items, purchases were

constrained to be made from the distribution center but for

other items there were no such constraints. In fact, a primary

reason for conducting the study was to enable the distributioncenter to retain its internal customers in the face of increasing

pressure on its customers to reduce purchasing costs by

purchasing from other sources. As suggested by Day and

Barksdale (2003), organizations and businesses are

increasingly seeking external service providers to increase

service quality and reduce organizational cost. The list of

potential respondents was obtained by job title and

classification. A total of 517 surveys were sent out through

inter-organizational mail, and 296 usable responses were

received, resulting in a 57 percent response rate. Part of the

explanation for this high response rate is that the culture of

this branch of state government requires obedience to

hierarchical authority, and the survey instruction letter came

from the head of the organization.

Sample characteristics

The sample was 77 percent male, and respondents ranged

from 22 to 60 years old, with a mean age of 40. About two

thirds (64 percent) of the respondents used the distribution

center once per year, while 31 percent used it monthly and 5

percent used it weekly. Twenty-four percent of the

respondents were high school graduates, 30 percent were

technical or community college graduates, 37 percent had a

Bachelors degree, and 9 percent had a graduate degree.

Measures

Transaction PSQ (TPSQ) was measured with two items:

1 The level of service quality I received during my last

experience was excellent, using a five-point scaleanchored strongly disagree and strongly agree; and

2 T he level of service quality I received f rom the

Distribution Center during my last experience was . . . ,

using a five-point scale anchored inferior to superior

(Brady and Robertson, 2001).

Cumulative PSQ was measured with two items:

1 The distribution center provides excellent overall service

quality, using a five-point scale anchored by strongly

disagree and strongly agree; and

2 Thinking about all of your experiences, would you say

that the quality of service you receive f rom the

Distribution Center is . . .?, using a five-point scale

anchored by poor and excellent (Cronin and Taylor,

1992).

To measure transaction CS, respondents were asked How

did you feel about the service you received during your last

experience with the distribution center? and used two

commonly employed scales (Spreng et al., 1996). The first

scale was anchored by dissatisfied/satisfied and the second

scale was anchored by terrible/delighted. Cumulative CS

was assessed by the same anchors (i.e. dissatisfied/satisfied

and terrible/delighted), but asked the respondents to think

about all of their experiences with the distribution center

(Bitner, 1990). Behavioral intentions were operationalized

with one item: How likely is it that you will use the

Distribution Center in the future, with a five-point scale

ranging from definitely not to definitely will. While it is

desirable to have multiple measures for most constructs, as

Bergkvist and Rossiter (2007) point out, for concrete

attributes such as intentions, this is not necessary, and in

order to avoid respondent fatigue, every attempt was made to

keep the number of measures as low as possible.

Results

Measurement model

We used structural equation modeling to test the hypothesized

relationships presented in our model (Bentler, 1995). Table II

reports the results of a confirmatory factor analysis of the

measures using the covariance matrix. The fit was good

(x2 39:96; df 18; NFI 0:99, NNFI 0:99,CFI 0:99, IFI 0:99, GFI 0:96, RMR 0:01,RMSEA 9:06). The measurement parameters and all thecoefficients linking the indicators with their latent constructs

were significant (t-values ranged from 14.40 to 17.54). Table

II also shows that the construct reliabilities were very good

(0.89 to 0.98) and the average variance extracted (AVE) for

each construct was far above the 50 percent cut-off suggestedby Fornell and Larcker (1981). To demonstrate discriminant

validity the factor correlations were constrained (one at a

time) to be equal to 1.0. In each case this produced a

significant increase in x2, indicating that the constructs are

distinct. As suggested by Fornell and Larcker (1981), the

AVE, which shows the amount of the variance that is captured

by the construct in relation to the amount of variance due to

measurement error, was also used as a test of discriminant

validity. The AVE can be compared to the shared variance

between any two constructs (the squared correlation between

the constructs) in that the AVE should be higher for each

construct than the squared correlation between that construct

and any other construct. This test holds for all constructs, and

thus there is evidence of discriminant validity among theconstructs.

Model and hypothesis tests

We then tested the full model, which consisted of the

structural model and the measures of each construct

(Figure 1). The fit for the proposed model is acceptable

(x2 64:98; df 22; NFI 0:98, NNFI 0:98,CFI 0:99, GFI 0:93, RMR 0:03, RMSEA 0:08).All six paths were significant at p 0:05. H1a stated thatcumulative PSQ will have a positive effect on intentions, and

this was supported. H1b predicted that cumulative CS would

have a positive effect on intentions, and this was also




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supported. H1c stated that cumulative CS would have a

stronger relationship with behavioral intentions than would

cumulative PSQ. This was not supported. A x2 difference test

in which the path between cumulative CS and intentions was

constrained to be equal to the path between cumulative PSQ

and intentions found that there was a x2 difference of 3.11,

p 0:08. This indicates that the effect of cumulative CS onintentions is not significantly different from the effect of

cumulative PSQ on intentions at a 0:05.H2a said that transaction PSQ would be positively related

to cumulative PSQ and H2b stated that transaction CS would

also be positively related to cumulative CS. Both hypotheses

were supported. H2c predicted that cumulative PSQ would

have a positive effect on cumulative CS, and H2d predicted

that transaction PSQ would have a positive effect on

transaction CS, and both of these were supported.

Model refinements and mediation tests

The proposed model makes a number of implicit mediation

predictions, such as the cumulative constructs completely

mediate the effects of transaction constructs on intentions.

These over-identifying restrictions were tested by estimating

additional paths between constructs. There are four criteria to

demonstrate complete mediation. First, we must show that

the two transaction constructs have significant simple

relationships to behavioral intentions, i.e. there are effects to

be mediated. To show this, we ran the model with the paths

from transaction PSQ to intentions and from transaction CS

to intentions, but without the paths from CPSQ to intentions

and from CCS to intentions. We found that the path from

TPSQ to intentions was significant (0.78, t 11:38), and thepath from TCS to intentions was significant (0.48, t 11:58).Thus, there are effects to be mediated. Second, we must show

that the two transaction constructs are significantly related to

the two cumulative constructs and the results of H2a and H2b

show that this is the case. Third, we must show that the

mediators (the two cumulative constructs) are significantly

related to intention. The results of H1a and H1b show that

this is also the case. Finally, we must show that when direct

paths between the two cumulative constructs on intention arepresent, the effects of the direct paths of the transaction

constructs are non-significant. These tests show that the

direct path of TPSQ on intentions is insignificant (0.04,

t 0:20) and the direct path of TCS on intentions is alsoinsignificant (0.13, t 1:22). The above tests indicatecomplete mediation of the effects of the two transaction

constructs on intentions by the two cumulative constructs.

Table III shows the standardized parameter estimates, t-

values, and fit statistics for the final model.

Discussion

Limitations

There are several limitations of our study that should berecognized. First, the setting was in a large unit of state

government, and therefore may be different from the private

sector. As stated above, however, for most products

purchasers were free to seek suppliers from the private

sector, so the purchasing and distribution center studied was

operating in a competitive environment. In addition, many

private-sector firms have constraints in their buying due to

long-term agreements, preferred/acceptable supplier lists, and

reciprocal buying arraignments. Therefore, we think that the

domain studied is similar to competitive, private-sector

environments.

Table II CFA results

Construct and measures CSPa ab AVEc

Transaction PSQ 0.91 0.83

The level of service quality I received during my last experience was excellent (anchored strongly

disagree5 1 and strongly agree5 5) 0.90

The level of service quality I received from the Distribution Center during my last experience was . . .

(anchored inferior5 1 and superior5 5) 0.92Transaction CS 0.96 0.93

How did you feel about the service you received during your last experience? (anchored

dissatisfied5 1 and satisfied5 7) 0.98

(anchored terrible5 1 and delighted5 7) 0.98

Cumulative PSQ 0.89 0.80

The distribution center provides excellent overall service quality (anchored strongly disagree5 1

and strongly agree5 5) 0.88

Thinking about all of your experience, would you say that the quality of service you receive from the

Distribution Center is . . .? (anchored ooor and excellent) 0.91

Cumulative CS 0.98 0.96

Based on all your experiences, how do you feel about the service you received from the distribution

center? (anchored dissatisfied5 1 and satisfied5 7) 0.98

(anchored terrible5 1 and delighted5 7) 0.98

Intentions

How likely is it that you will use the Distribution Center in the future? (anchored definitely

not5 1 and definitely will5 5 1.0

Notes: aCompletely standardized parameter. bCronbachs a. cAverage variance extracted (AVE), which is the proportion of variance in the construct that is notdue to measurement error (Fornell and Larcker, 1981). AVE is computed as:

Pl

2=Pl

2 P

var1




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Second, as a cross-sectional study we do not look at the initial

formation of service quality perceptions and the development,

over time, of cumulative PSQ. Similarly, we do not measure

the build-up of cumulative satisfaction from initial and

subsequent transaction satisfaction experiences. To do so

would require manipulated experiences in a laboratory

setting.

Implications for theory

The primary implications for theory include:. demonstrating the distinction between CS and PSQ;. specifying, based on theory and logic, the causal ordering

between transaction constructs and cumulative

constructs, and between PSQ and CS; and. assessing the relative impact of PSQ and CS on behavioral

intentions.

First, one of our goals was to address the issue of the

distinction between PSQ and CS. A huge literature exists on

these two constructs, some of which indicates that they are

distinct, while some indicates that they are not. We found

empirical discrimination between PSQ and CS at both the

transaction and the cumulative levels. While the correlations

among the four constructs were high, the discrimination test

using average variance extracted, which is generally

considered a rather stringent test, indicated that each

construct was distinct.

Second, based on the logic of transaction constructs being

antecedents of cumulative constructs, we specified transaction

PSQ as an antecedent of cumulative PSQ, and transaction CS

as an antecedent of cumulative CS. In addition, based on

cognitive appraisal theories of emotions, we specified that the

cognitive evaluation of PSQ would be antecedent to the more

emotional construct of CS. While our method of analysis

cannot definitively establish the causal ordering of PSQ and

CS, our results do lend support to the PSQ !CS ordering.

Finally, we assess the relative impact of PSQ and CS on

behavioral intentions. Our results indicate that the four PSQ/

CS constructs can predict behavioral intentions in a single

model. It was expected that cumulative CS would have a

stronger effect on intention than cumulative PSQ (H1c).

However, our results showed this not to be the case in that the

effects were not significantly different from each other even

though the effect of CPSQ on intention was almost twice as

large as the effect of CCS on intention. This would seem to

indicate that in a typical consumer purchase situation, the

emotional aspects (CS) of the process may well outweigh the

more cognitively based evaluations (PSQ) in influencing

repurchase intentions, but in the business-to-business setting

in which this research was carried out, the more cognitively

based PSQ plays at least an equal, if not greater, role in

determining intentions. Thus, while consumers may

repurchase from the same supplier or switch to another

supplier based largely on their level of cumulative satisfaction,business decisions are likely to be less emotion based and

more cognitively based.

Implications for managerial practice and future

research

From a managerial perspective, the finding that the effects of

transaction-specific constructs on intentions are completely

mediated by the corresponding cumulative constructs is

important. It implies that one negative transaction outcome

may not be sufficient to cause the customer to switch if the

cumulative levels are sufficiently positive. Thus, a negative

outcome may be discounted by the user if it is seen as a

unique occurrence. However, a series of successive negative

transaction outcomes may cause the cumulative constructs to

become less positive resulting in lower intentions to

repurchase from the same supplier. This may occur even if

remedial action, such as repair or replacement, is taken for

each of the negative outcomes. A user is likely to tolerate only

so many negative experiences before taking some sort of

action themselves. Therefore, in the event of a negative

transaction outcome, the supplier must act to convince the

customer that it was a unique occurrence and is unlikely to

happen again. In this situation, two options are worth

exploring in future research. One option is for the supplier to

offer an excuse for the negative outcome. An excuse is an

attempt to show that the factors that caused the negative

Table III Standardized structural parameters for the final models

Final model

Parameter Completely standardized coefficient t-value

A. Cumulative PSQ! intention 0.53 4.18

B. Cumulative CS! intention 0.29 2.34

C. Cumulative PSQ! cumulative CS 0.70 9.97

D. Transaction PSQ! cumulative PSQ 0.84 17.93E. Transaction CS! cumulative CS 0.25 4.07

F. Transaction PSQ! transaction CS 0.90 17.93

x2 64.98

df 22

NFI 0.98

NNFI 0.98

CFI 0.99

IFI 0.99

GFI 0.93

RMR 0.03

RMSEA 0.08




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outcome were beyond the suppliers control (Weiner, 2000).

If the excuse is accepted as valid, then no negative

repercussions (i.e. switching suppliers) are likely. The other

option is to confess that the negative outcome was the

suppliers fault. A confession has the effect of reducing the

belief that the negative outcome will occur again (Weiner,

2000). Of course, the efficacy of either option will diminish as

the number of negative outcomes increases. Both of theseoptions need to be investigated in future research.

Future research could also utilize other settings to examine

the relative impact of CCS and CPSQ on intentions. In

situations in which there is less interpersonal interaction, it

may be that CPSQ has less of an effect on intentions. Or, in

cases in which failure has extremely negative consequences for

the buyer, the emotion created could increase the effect of

CCS on intentions.

Finally, our findings that the two cumulative constructs

determinate intentions indicate the need to consider history

and long-term orientation, which are fundamental in

relationship-oriented views (Holmlund, 2004). However,

additional research could examine whether transaction

constructs, in some circumstances, have direct effects onintention. It is easy to imagine situations in a business-to-

business setting in which the ramifications of even a single

negative experience are so severe that the buyer would never

again purchase from the supplier. In this case, there might be

direct effects of the transaction constructs on intentions that

are not mediated by the cumulative constructs.

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Corresponding author

Thomas J. Page is the corresponding author and can be

contacted at: [email protected]

Executive summary and implications formanagers and executives

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.

While the principle Treat them well because they wont give

us a second chance when responding to customers needs

might be commendable, the fact is you are more than likely to

get a second chance if something goes wrong. But a third or

fourth chance? Well, maybe not. Better to always get it right,

but if something does go wrong make sure you make your

excuses known or, if theres no excuse or no one else to blame,

confess, and in either event convince them it will never

happen again.

In Service quality and satisfaction in business-to-business

services, Richard A. Spreng et al. find that one negative

transaction outcome may not be sufficient to cause the

customer to switch if the cumulative levels are sufficientlypositive. Thus, a negative outcome may be discounted by the

user if it is seen as a unique occurrence. However, a series of

successive negative transaction outcomes may cause the

cumulative constructs to become less positive, resulting in

lower intentions to repurchase from the same supplier. This

may occur even if remedial action, such as repair or

replacement, is taken for each of the negative outcomes.

A user is likely to tolerate only so many negative experiences

before taking some sort of action. Therefore, in the event of a

negative transaction outcome, the supplier must act to

convince the customer that it is unlikely to happen again. One

option is for the supplier to offer an excuse an attempt to

show that the factors that caused the negative outcome were

beyond the suppliers control. If the excuse is accepted as

valid, then no negative repercussions (i.e. switching suppliers)

are likely. The other option is to confess that it was the

suppliers fault. A confession has the effect of reducing the

belief that the negative outcome will occur again. Of course,

the efficacy of either option will diminish as the number of

negative outcomes increases.

When investigating the effects of service quality and service

satisfaction in a business-to-business setting, Spreng et al. first

address the issue of the distinction between perceived service

quality (PSQ) and customer satisfaction (CS). The majority

of PSQ and CS research has been done in the business-to-

consumer (B2C) context, and even in research in a business-




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to-business setting the exact nature of the relationship

between PSQ, CS, and behavioral intentions leaves

unanswered questions.

Relationships among constructs may be different in a

business-to-business versus a consumer setting, and even

between different functional areas within a given firm. This

difference might manifest itself, for example, in the impact of

PSQ. Since organizational buying often involves more face-to-face contact between buyers and sellers, this increased

interaction may increase the overall importance of PSQ.

The authors support the argument that PSQ is a judgment

of performance, while CS is an affective construct.

Specifically, transaction PSQ is defined as a judgment of

performance excellence based on the customers last

experience. Cumulative PSQ is a judgment of performance

excellence based on all of the customers experience with a

particular product or service. Transaction CS is an affective

state that is the emotional reaction to the customers last

product or service experience. Cumulative CS is an affective

state that is the emotional reaction to all of the customers

experience with a particular product or service.

Disagreement exists about the causal ordering which

comes first, PSQ or CS? Based on the logic of transactionconstructs being antecedents of cumulative constructs,

Spreng et al. specify transaction PSQ as an antecedent of

cumulative PSQ, and transaction CS as an antecedent of

cumulative CS. In addition, based on cognitive appraisal

theories of emotions, they specify that the cognitive evaluation

of PSQ would be antecedent to the more emotional construct

of CS.

The results also indicate that the four PSQ/CS constructs

can predict behavioral intentions in a single model. It was

expected that cumulative CS would have a stronger effect on

intention than Cumulative PSQ. However, the results showedthis not to be the case in that the effects were not significantly

different from each other, even though the effect of CPSQ on

intention was almost twice as large as the effect of CCS. This

would seem to indicate that in a typical consumer purchase

situation, the emotional aspects (CS) of the process may well

outweigh the more cognitively based evaluations (PSQ) in

influencing repurchase intentions, but in the business-to-

business setting in which this research was carried out, the

more cognitively based PSQ plays at least an equal, if not

greater, role in determining intentions.

So, while consumers may repurchase from the same

supplier or switch to another supplier based largely on their

level of cumulative satisfaction, business decisions are likely to

be less emotionally based and more cognitively based.

(A precis of the article Service quality and satisfaction in

business-to-business services. Supplied by Marketing Consultants

for Emerald.)




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