Technology-Based Service and Customer Satisfaction in Developing Countries (2005)

Technology has become an integral part of the marketplace. Customers are increasingly given the option or are being asked to provide for themselves through the use of self-service technologies. It is important for providers of self-service technologies (SSTs) to understand how customers evaluate SSTs so that firms can improve their performance. This article provides a view of the relationships between service quality and customer satisfaction based on technology-based service encounters. Results shows that at the very basic level, criteria for evaluation appear to be different between employee dependent and technology dependent service delivery. However, with the use of the critical incident technique (CIT) and attribution techniques, criteria can be developed that are applicable to SSTs and when utilized in employee based services, provide a deeper understanding of the customers' evaluation process. With the fast pace of modern-day living, utilization of services has increased tremendously. In developing countries like the Philippines, self-service technologies called SST's among marketing practitioners, are now starting to change the way customers interact with firms to create service outcomes. Literature defines self-service technologies (SST's) as technological interfaces that enable customers to produce a service independent of direct service employee involvement (Meuter, Ostrom, Roundtree, and Bitner 2000). Cited as examples include automated teller machines, banking by telephone and services over the Internet. To date, in the Philippines, almost half of all retail banking transactions are now conducted without the assistance of a bank teller, a situation almost similar to the scenario of the Lawrence and Karr (1996) and more innovative application are being introduced (e.g. payment of purchases directly deducted from savings using the ATM cards during check-out). It is now also possible to transact routine banking needs using the phone and computers. Internet enables shoppers to purchase wide variety of products without having to visit a retail outlet or converse with a service employee. Dabholkar (1996), Gibson (1999), and Merrill (1999) reported that electronic self-ordering is currently being developed by fast-food restaurants, and self-scanning at retail stores has been tested and is projected to become widely available in the future. Considering the business relationship between the United States and the Philippines, there is no doubt that soon it will also be tested and made operation in the latter's business environment. These technological innovations and advances has reached a stage that they became a critical component of customer-firm interactions in Philippine business. It is expected that by now it has become a key criterion for long-term business success. From the academic viewpoint, the list importance of self-service as a fundamental shift in the nature of services is growing. To the service-marketing practitioners in the Philippines, time has come for greater understanding about how interactions with these technological options affect customer evaluations and behavior. This is the motivation behind this study. Efforts are concentrated in the identification of the sources of satisfaction and relate them to customer acquisition, retention and loss (to other option and/or other service provider). Review of Literature and Development of Hypothesis Previous studies on service customer acquisition, retention and loss were based on the service quality construct made operational by two divergent tracts, the Nordic perspective and the American perspective. Gronroos's Nordic perspective (1982, 1984) viewed service quality in global terms of functional and technical quality. In contrast the American perspective of Parasuraman, Zeithaml, and Berry (1988) zeros in reliability, responsiveness, empathy, assurances, and tangibles, all related to or dependent upon the service encounter process. …