Impact Of Perceived Service Quality On Customer Satisfaction And Brand Loyalty
[A CASE STUDY OF HONEYWELL FLOUR MILLS PLC]

CHAPTER TWO
LITERATURE REVIEW
2.0    Introduction
This chapter introduces a text of a scholarly paper, which includes the current knowledge and substantive findings, as well as the definition, theoretical and methodological contributions of customer satisfaction, brand loyalty and perceived quality service.
2.1    Definitions of Customer Satisfaction, Brand Loyalty and Service Quality
2.1.1     Customer Satisfaction
The definition of consumer satisfaction has been divergent ever since Cardoso (1965) introduced this concept into the marketing field. Perceived service quality and satisfaction assessment depends on the function of the variation between consumer's perception and expectation of service levels. Therefore these two terms were interchangeable in some previous studies until Parasuraman, Zeithaml, &Berry (1990) provided clear definitions for consumer satisfaction and service quality.
Howard &Sheth (1969) first denoted consumer satisfaction as a related psychological state to appraise the reasonableness between what a consumer actually gets and gives. Churchill & Surprenant (1982) suggested consumer satisfaction resulted from purchasing and using a certain product, which was made by a consumer to compare the expected reward and the actual cost of the purchase. Oliver (1997) defined satisfaction as a total psychological state when there is an existed discrepancy between the emerging emotion and expectation and such an expectation is a consumer's feeling anticipated and accumulated from his or her previous purchases. On the other hand in a study of durable goods, the main factor for consumers' satisfaction was not the gap between "the product performance" and "expectation" or the initial expectation (Churchill &Suprenant 1982). The major factor was the "production performance" that determined the consumers satisfaction. The understanding of satisfaction implies that satisfaction is particularly incurred towards a particular purchase. A consumer compares the actual benefit and cost level in the purchasing behavior and the expected level of benefit. After this appraisal process, positive or negative feelings and emotions occur.
Parasuraman, Zeithaml &Berry (1990) suggested that service quality, product quality and price all influence satisfaction. Voss (1998) indicated satisfaction results from the function of price, expectation and performance.
Companies with a deserved reputation for `impeccable service' generally have more loyal customers than those that do not and not because they are so perfect, but they do one thing far better than their competitors. They demonstrate they care - not just when things `go right' but, more importantly, when things `go wrong'. Jo Anna Brandi: Fix problems..Fix Relationship... Build Loyalty, highlighted that creating a loyal customer depends on satisfying two different kinds of customers' expectations.
1.    Business Expectation, and
2.    Relationship Expectations
To achieve this, the under listed action should be taken –
•    The company must understand what the customer is expecting from the business. Customers have expectations about both how you operate and how you interact with them, personally. You probably know how to operate your business but are you equally skill at managing the experience you create for your customers - the kind that makes them `raving fans?' if not, find out or pay the price!
•    The company must design a problem recovery process to turn upsets into loyalty. Problem will happen at some point, even in the best run businesses but organisation must be ready to respond to them before they happen and practice them like fire drills to get them right.
•    The company must train/motivate/empower the employees to resolve problems as soon as possible. To a customer, the person they are talking to is the company. Organisation should not prevent the staff from being able to resolve problems and build valuable relationships with customers for lack of training and authority to act.
•    Organisations must monitor the relationship constantly using customer feedback. Regularly and frequently, the company should constantly ask the question how are we doing?