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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
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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
Service quality and satisfaction in business-to-business services
Richard A. Spreng, Linda Hui Shi and Thomas J. Page
Journal of Business & Industrial Marketing
Volume 24 Number 8 2009 537 548
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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
Service quality and satisfaction in business-to-business services
Richard A. Spreng, Linda Hui Shi and Thomas J. Page
Journal of Business & Industrial Marketing
Volume 24 Number 8 2009 537 548
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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-
Service quality and satisfaction in business-to-business services
Richard A. Spreng, Linda Hui Shi and Thomas J. Page
Journal of Business & Industrial Marketing
Volume 24 Number 8 2009 537 548
547
8/3/2019 Service Quality and Satisfaction in Business to Business Service
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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.)
Service quality and satisfaction in business-to-business services
Richard A. Spreng, Linda Hui Shi and Thomas J. Page
Journal of Business & Industrial Marketing
Volume 24 Number 8 2009 537 548
548
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