Based on research and theories on justice, it was predicted that customer service would be as important as, or even more important than perceived product value in determining customer loyalty and purchase behavior. This general hypothesis was tested by surveying 324 respondents who had just patronized several retail outlets. Results indicated that customer service was indeed more important than perceived product value in predicting customer loyalty, the amount of money spent in the visit, and the range of products purchased. In addition, customer service was a significant predictor of all 3 variables, whereas perceived product value was able to predict customer loyalty only. It was also found that for females and respondents with a higher income, customer loyalty was more influenced by customer service.

The Impact of Customer Service and Product Value on Customer Loyalty and Purchase Behavior

Decision analysis in management science employs concepts from economics such as utility functions and indifference curves. A utility function U models the “satisfaction” that a customer obtains from logistics service. Here U depends on two attributes (lead time, fill rate) whose values more directly represent customer service. The shipper can, at additional cost, improve either or both of these attributes. Constructs and maximizes various utility functions U given a total budget B for distribution service. Finds that without increasing the budget overall logistics service can often be improved from the customer’s point of view. Whether U is additive or multiplicative, a customer’s utility resulting from the optimal lead time and fill rate is typically 20 per cent higher than when those attribute levels are set intuitively (without reference to customer preferences and tradeoffs expressed by U). Gives some introduction to decision analysis (certainty equivalent, risk aversion, …) to aid in understanding the functional forms employed for U and methods of solution, rendering the paper more self‐contained.

Customer service in physical distribution: a utility‐function approach

This paper presents a theoretical framework for estimating the functional form of the relationship between sales and service performance for transportation providers. We introduce a method of improving model performance by utilizing a concept of human behavior that has never been incorporated into the models of sales–service relationships. This concept, called the loss aversion property , claims that customers (shippers) react more strongly when they experience service performance below their reference point (expectation) than when they experience service performance above their reference point. Using this concept, we posit that a one unit decrease in service quality from the customer’s reference point would decrease a carrier’s sales more than an equivalent-sized increase in service quality would increase sales. To incorporate an asymmetric pattern of the sales–service relationship, we develop a model that makes a key distinction between sales response to service increase and to service decrease. The model is demonstrated using hypothetical data. The discussion addresses multiple service quality measures as well as data implementation issues.

A theoretical framework for modeling sales-service relationships in the transportation industry

Article history: Received December18, 2017 Accepted March 28 2018 Available online March 28 2018 This study investigates the role played by service quality at manufacturer-distributor junction in small-medium manufacturing units, and presents a model that proposes and validates that contribution towards service quality on behalf of both the distributor and manufacturer leading to satisfaction as well as loyalty. The research design for this study includes a combination of literature review, exploratory interviews and a questionnaire survey conducted through interview schedule from 101 respondents working in different small-medium manufacturing units (SMEs) of North India. The study uses Structural Equation Modeling (SEM) to develop dual directional scales to measure service quality at manufacturer-distributor junction besides testing a set of propositions related to service quality. A model showing linkages of manufacturing organization’s service quality with distributor service quality leading to mutual satisfaction and loyalty is developed. The model is empirically tested and is found to be fit. This study would be of interest to SME practitioners interested in improving service quality w.r.t. distributors. This study finds support for strengthening relationships with distributors to achieve a win-win situation. Future researchers may validate this scale, and empirically test the proposed model in similar settings. Insights derived from this study may be transferred to other junctions of a manufacturing supply chain such as suppliers, retailers, employees and end customers. ensee Growing Science, Canada © 2018 by the authors; lic

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Distributor service quality in Indian SMEs: A bi-directional customer perspective

The implementation of supply chain initiatives (SCI) often requires specific
investments in technology, material, organization and staff. However, the assessment of the economic viability of such inter-organizational activities is not a trivial issue. Philip Wessely supports managerial decision-making in the forefront of a potential implementation by introducing a quantification approach for the value contribution of SCIs. The resulting approach combines different innovative modeling techniques and considers the individual integration of companies in inter-organizational networks. As a result, it has a broad field of application.

Value Determination of Supply Chain Initiatives: A Quantification Approach Based on Fuzzy Logic and System Dynamics

Before distribution managers can effectively manage customer service, they must be able to determine how sales respond to various levels of service. The potential for customer service to contribute to a company's sales is generally acknowledged and has received considerable attention in the literature over the past several years. Much of the work, however, has been of a theoretical nature. Empirical studies have been confined largely to analyses of data collected by surveys which measure respondents' opinions regarding varying levels of logistics service. Hence, conclusions are based on sales expectations or purchase intentions of sellers and buyers, respectively. It is not suggested that respondents would misrepresent their concern for service levels, but little work has been done to confirm the proposed sales‐service relationships through analysis of historical data. If expectations and/or intentions indeed become actions, the impact should be observable in sales patterns over time.

Douglas N. Chard

Papers

Effects of Customer Service on Sales: An Analysis of Historical Data