Customer delight and market segmentation: An application of the three-factor theory of customer satisfaction on life style groups
Introduction
Academics and practitioners have recognized that merely satisfying customers is not enough and that delighting customers is necessary to produce exceptional behavioural consequences such as loyalty or positive word-of-mouth (Oliver, Rust, & Varki, 1997). Customer delight has been defined as a positive emotional state resulting from having one's expectations exceeded to a surprising degree (Rust & Oliver, 2000). It is argued that only product or service perceptions that fall outside the “zone of tolerance” (Parasuraman, Berry, & Zeithaml, 1993) and exceed the customer's expectations lead to loyalty-driven profit. Some empirical studies found that the loyalty curve is relatively flat within the zone of satisfaction (fulfilment of expectations) and climbs rapidly as a result of delight or exceptionally high satisfaction (Dick & Basu, 1994; Matzler & Pechlaner, 2001; Oliva, Oliver, & MacMillan, 1992). It is argued that a company whose customers are in the zone of satisfaction is not able to differentiate itself from its competitors (Berman, 2005).
Customer delight differs from customer satisfaction in that it relates to extraordinarily high satisfaction coupled with an emotional response such as joy. Not all product or service attributes are able to lead to customer delight (Berman, 2005; Matzler, Hinterhuber, Bailom, & Sauerwein, 1996). Product or service attributes that add utility beyond that which is expected and are unexpectedly and surprisingly pleasant are often called excitement factors, satisfiers, or value-enhancing attributes. A high level of novelty and exceptional entertainment in a ski resort or exceptionally good service in a restaurant can be such excitement attributes. They differ from product or service attributes that customers consider a “must” and which are not able to elicit satisfaction but merely prevent dissatisfaction. The cleanliness of a room or the freshness of the food in a restaurant can be examples of such basic requirements. Finally, some product or service features increase overall satisfaction linearly when performance improves. Such features have been labelled performance factors, hybrids or bivalent factors.
Hence, it is important to identify which product or service attributes increase satisfaction or lead to delight when their performance is improved and which attributes can only dissatisfy through their absence as their presence is expected by the customer.
According to the dominating expectation-disconfirmation paradigm (Oliver, 1980) satisfaction is formed by way of a cognitive comparison of perceived performance of a product or service and the expectations the customer had before the purchase. As expectations differ from customer to customer the product attributes that generate delight (as not expected) and those that merely prevent dissatisfaction (core benefits or basic criteria) should not be the same across market segments.
Providing product or service features that delight customers requires extra effort on the firm's part (Rust & Oliver, 2000), companies must carefully evaluate how to spend scarce resources on product or service improvements. What for one customer group might be a basic factor (e.g. transportation to the ski resort for tourists travelling without their own car), could be irrelevant to others. The health spa offer could be a must for one segment and an excitement factor for another one. Hence, it seems to be important to analyse the contribution of the single product or service features to overall satisfaction or customer delight on a segment level rather than on an aggregate level. In literature, this issue has not been addressed to date. Therefore, we intend to fill this gap by investigating whether basic, performance and excitement factors differ between market segments.
We first briefly review the literature on the three-factor theory of customer satisfaction and argue that differences between market segments need to be taken into account. Then, an empirical study is presented that investigates the differences in the satisfaction driver's contribution to overall satisfaction between five lifestyle groups. In the final section of the paper we discuss the implications of our findings.
Section snippets
Three-factor theory of customer satisfaction
Although customer satisfaction has an extensive research tradition of over three decades (Oliver, 1997), consensus on the three-factor structure of satisfaction has only recently been reached (Anderson, Fornell, & Mazvancheryl, 2004; Berman, 2005; Füller, Matzler, & Faullant, 2006; Oliver, 1997). The idea of three independent satisfaction factors that influence satisfaction in different ways was first formulated by Kano (1984) in the quality management literature, referring to Herzberg,
Lifestyle market segmentation
The concept of lifestyle was first intensely researched by the psychologist Alfred Adler in the 1960s, who stressed the uniqueness of the individual but also recognized similarities among individuals and their lifestyles (Matzler, Bailom, Hinterhuber, Renzl, & Pichler (2004), Matzler, Fuchs, & Schubert (2004), Matzler, Pechlaner, & Hattenberger (2004)). In 1964, Lazer introduced the lifestyle concept to marketing and consumer research. Since then researchers have been developing instruments to
Sample
This study uses data from the “Tourism Quality Check” (TQC) study. Data collection took place between November 2004 and February 2005. The TQC study is an annual online customer satisfaction study where more than 10 leading Alpine ski resorts e.g. Lech/Zürs, St. Moritz, and Dolomiti Superski in Austria, Switzerland and Italy benchmark against each other on customer satisfaction. Participants of this online study were recruited by placing banners on the ski resort webpages. As an incentive,
Discussion and implications
As expected, the results on a segment-level analysis show clear differences between the lifestyle groups. Table 5 includes the factor classification for each segment and highlights the differences.
“Party” is an excitement factor for two segments (Cluster 3 “Sporty” and cluster 4 “Demanding”), a performance factor for cluster 5 (Settled) and a basic factor for the other clusters. If a ski resort wants to delight the “sporty” and “demanding” lifestyle segment, Après Ski, Night-life and
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