Concepts of Customer Services and Customer Satisfaction: Introduction

By John Dudovskiy

Customer SatisfactionJohnson and Clark (2008) define service concept as a shared understanding of the service nature provided and received. They also state that service concept has to provide information about the essence of the service, service experience, and service outcome.

“The terms customer satisfaction and perception of quality are labels we use to summarize a set of observable actions related to the product or service” (Hayes, 2008, p.33)

The most comprehensive definition of satisfaction has been offered by Kotler and Keller who define satisfaction as “person’s feeling of pleasure or disappointment which resulted from comparing a product’s perceived performance or outcome against his/ her expectations” (Kotler and Keller, 2006, p.144). “Perception is defined as consumer’s belief, concerning the service received or experienced” (Rai, 2008).


Categorisations of Customer Satisfaction and Service Perception

Parasuraman et al (1991) divide customer service expectations into two levels: desired and adequate. Desired level of service expectations is a state of service the customer desires to receive, whereas adequate level of customer expectation is the level of service the customer can only “accept” without being too satisfied with it.

If desired and adequate levels of service expectations are to be explained in case of London Underground and National Rail Services customers, desired level of customer expectation would be to go from one destination to the other with no crowded train as quick as possible, whereas, adequate level of customer expectation would be just to go to destination even if the train carriage is crowded, and the train is not moving too fast.

Walker (1995) offers conceptualised service encounter model that is divided into three disconfirmation stages:

First stage is evaluation stage in which peripheral service is offered before the consumption of the core service.

Second stage involves intensive anticipation of core service by consumer.

Third stage is the final in which delivery interaction is undertaken.


Levels of Customer Satisfaction

When discussing categories of customer satisfaction levels, Williams and Buswell (2003) refer to Oliver’s theory that divides potential customer satisfaction levels into three categories:

First, negative disconfirmation happens when the level of service turns out to be worse than expected by the customer.

Second, Positive disconfirmation, is the case where the service is better than expected by the customer.

Third, simple disconfirmation, happens when the level of service matches the level of service expectations.

A range of authors have offered explanations about differences between service quality and customer satisfaction from the viewpoint of customers. The most notable work in that aspect belongs to Oliver (1997) as mentioned by Williams and Buswell (2003) as presented on the following table:

Service Quality

Customer Satisfaction

Evaluated using specific clues

Evaluation more holistic

Based on perceptions of “excellence”

Based on needs




 Main Theories of Customer Satisfaction and Service Perception

Rai (2008) draws the basic formula of customer satisfaction as:

Customer satisfaction = Customer Perception of the Service Received  – Customer Expectation of Customer Service

In this way it is easy to generalise that if the perception of the service received has exceeded the expectations of the service customer satisfaction will be positive; on the other hand, if the perception of the of the service received is less than the level of expectation of the service it would lead to customer dissatisfaction.

A set of earlier studies on the topic of customer satisfaction and service perceptions were mainly undertaken on the basis of studying the relationships between three or four variables (Dodds et al,(1985), Zeithaml (1988) and Lee and Cunningham (1996)).

The main shortcomings of such studies are that they rely on qualitative aspects increasingly
and at the same time do not take into account psychological aspects of customer experiences. When related to the current research such customer experience psychological aspects will be stress associated with the longer waiting times in London Underground and National Rail Services terminals and stress and pressure caused by train carriages being overcrowded. This, study, on the other hand addresses the psychological aspects of service sector organisation customer experiences as well.

Yi (1989) mentions confirmation/disconfirmation framework when discussing the issues of customer satisfaction. According to the framework customers have a set of pre-established standards in their mind when they are about to purchase a product or a service. The level of customer satisfaction is a result of comparison of this standard to the perception of the product bought or the service received.
If the level of perception of product  or service bought does match the established customer standards this will result in customer satisfaction, and if it fails to meet customer standards customers will be left dissatisfied.

Czepiel et al (1974) maintain the validity of two factor theory   in relation to analysing customer satisfaction. Two factor theory states that customers can be satisfied and dissatisfied with a product or a service at the same time, because satisfaction and dissatisfaction will be about different aspects of the product or service, thus, they will be unrelated.

The dual factor theory was further developed by Swan and Combs (1976) to change the names of the factors to instrumental performance and expressive performance. According to this theory instrumental performance relates to physical aspects of the product or service, whereas expressive performance refers to psychological aspects. The theory specifies expressive performance as a necessary component of customer satisfaction. Customers will be left unsatisfied if they are not satisfied with expressive performance of products and services, regardless of the fact that their instrumental performance have been satisfactory or not.


  • Hayes, BE, 2008, Measuring Customer Satisfaction and Loyalty, ASQ Quality Press
  • Johnson, R & Clark, G, 2008, “Service Operations Management”, third edition, Prentice Hall
  • Kotler, P & Keller, K, 2006, “Marketing Management”, twelfth edition, Prentice-Hall
  • Parasuraman, A, Berry, LL & Zeithaml, VA, 1991, “Understanding Customer Expectations of Service”, Sloan Management Review, Issue: 32(3)
  • Rai, AK, 2008, Customer Relationship Management: Concepts and Cases, PHI Learning
  • Walker, JL, 1995, “Service Encounter Satisfaction: Conceptualized”, Journal of Service Marketing Issue: 9(1)

Category: Customer Services