Customer Satisfaction in Apple - Essay Example

Satisfaction in Apple Satisfaction in Apple A. Definition and Justification Satisfaction The contemporary business environment is characterised by rapid globalisation, which has, as a result, intensified competition among businesses in similar industries. Owing to the heightened level of competition, multinational companies (MNCs), among other global-spanning organisations have been prompted to look for ingenious ways to operate successfully and profitably. One of the most outstanding changes in business operation has been significant increase in customer awareness. Companies such as Apple, Inc. are increasingly acknowledging the importance of customer satisfaction in determining the profitability and eventual organisation survival (Chen and Liou, 2002; Beatson et al., 2007). According to Kotler (1995) customer satisfaction can best be defined as an individual’s pleasure or displeasure resulting from comparing the outcome or performance of a product, with prior expectations about performance of the same product. Another definition which exemplifies customer satisfaction is provided by Stank et al. (2007). The scholars posit that customer satisfaction refers to consumers’ evaluation and perception of a specific service or product after purchasing and utilising it. Earlier definitions denote that customer satisfaction constitutes feedback provided by buyers about a service or a product after consuming it (Fornell, 1992; Oliver, 1981). As can be discerned from these definitions, customer satisfaction stems from a customer’s perception of the suitability of a product in comparison to actual experience after consumption. Cochran (2003) emphasises that customer satisfaction is a high subjective concept, since consumers derive pleasure from commodities on the basis of various variables such as the price of the service/product, availability, and reliability, among other attributes. Judging from the various definitions and explanations of customer satisfaction, it is apparent that this concept bears immense significance to companies like Apple, which are currently competing within the global context. For instance, recognising customer preferences and product expectations ensures that the Company manufactures computers and computer peripherals that satisfy buyers. Accounting for customers’ taste and preference in computerised gadgets partially explains Apple, Inc.’s success internationally. This is because customer satisfaction paves way for repeat purchases and heightened customer loyalty. B. Factors Affecting Customer Satisfaction Allbal (2011) points out that there is a wide variety of factors that influence customer satisfaction, since satisfaction arises from a customer’s comprehensive impression of a supplier and the services or products provided. The author mentions several factors likely to affect customer satisfaction with Apple, Inc., its products, and services. Key among these elements is the perceived capability of the Company to avail high quality products. Customer satisfaction within Apple, Inc.’s context could also be influenced by the technological aspects of the Company’s products or services. The technological dimension is particularly important given the Company’s orientation towards production of the latest computerised devices. Other potentially influential factors include the efficacy and promptness of organisational response to customers’ concerns, available customer service, and the quality, efficiency, as well as, affordability of products. In support of the preceding assertions, there are other researchers who indicate that customer satisfaction is principally a factor of overall service/product quality (Shamdasani et al. 2008; Swaid and Wigand, 2007). Johnstone (1997) also points out the mood with which services are delivered also plays a significant role in determining customer satisfaction. Humby et al. (2009) also outline some factors likely to affect consumer satisfaction including the mode of product retailing opted for by MNCs like Apple, Inc., cooperation and coordination with other players in the value chain thus facilitating timely response to customers, as well as, loyalty programmes that act as incentives for the company’s customers. In further emphasis of factors affecting consumer satisfaction, Hallowell (1996) notes that it results from consumers’ perception of received product/service value, where this value is equivalent to perceived quality of the product/service in relation to price. The latter, therefore, suggests that determinants of customer satisfaction include perceived quality and value. C. Measurement of Customer Satisfaction Given the capability of customer satisfaction to foster business profitability and potentially guarantee survival, it has become necessary for companies to measure this crucial business concept. According to Shaw and Reed (1999), measurement of customer satisfaction is one of the most extensively utilised non-fiscal indices in the modern business environment. These scholars are also emphatic that improvement of consumer satisfaction index can be a fundamental undertaking in the effort to promote business performance, just like profitability and sales targets. One of the important implements of measuring customer satisfaction is the customer relationship management (CRM) tool. Ederer et al. (2000) justify the use of CRM as a customer satisfaction measurement approach by outlining several advantages of this tool. It is imperative to note that these advantages are rooted in the idea that customer satisfaction ultimately leads to elevated consumer loyalty to a company. The benefits of CRM, therefore, include the fact that each satisfied buyer introduces the company to three or more new customers. In addition, the rate of repeat customer purchases rises with increased customer satisfaction of supplier performance and reliance on supplier products or services. Another advantage of measuring customer satisfaction on the basis of customer relations is that loyal hence frequent buyers are not as highly sensitive to product/service prices, as new customers. This implies that CRM based measurements are highly likely to be accurate owing to reduced price-based volatility of values. Finally, suitability of CRM as a measurement tool emerges from the idea that a displeased customer is likely to communicate the negative experience to ten additional potential buyers. For these reasons, CRM not only provides means of measuring customer satisfaction, but also lays the foundation for determining the factors likely to enhance consumer pleasure hence loyalty to a supplier and their services/products. Hill et al. (2007) go a step further to propose techniques that can be applied to determine consumer satisfaction within a company. Though not explicitly, these techniques are derivatives of various dimensions of customer satisfaction. For instance, the authors suggest that customer satisfaction can be measured from the loyal tendencies of customers, as noted from repeat purchases. Another potent approach to customer satisfaction measurement entails formulation and execution of market research. Such research could take the form of surveys using applicable questionnaires, target market interviews, and focus groups, among other research methods, in an effort to monitor the level of customers’ satisfaction with products or services availed by a specific supplier. In support of the loyalty hence repeat purchases examination, Raab et al. (2008) state that after using a given product or service, a consumer may question the level of pleasure they derived from it. If the customer realises that he or she was happy with the product of service, there is a high likelihood of buying it again repeatedly. High satisfaction is also directly associated with further recommendations to prospective customers. As a result, a satisfied customer not only becomes a regular buyer, but also introduces additional buyers, demonstrating high levels of satisfaction. SERVQUAL model could be utilized in measuring client’s satisfaction in a company as developed by Parasuraman et al., (1988). The model is therefore based on the discernment gap which is based on expected service quality, as well as, service quality. The SERVQUAL has been extensively adopted in explaining customer perception in the quality of service as well as the level of client fulfilment. There are ten originally covered dimensions in service quality. The proposed dimensions are access, reliability, responsiveness, credibility, competence, courtesy, communication, tangibles, security, and, understanding the consumer. The SERVQUAL model however, reduces these dimensions to five which are empathy, reliability, responsiveness, tangibles, and assurances). Nevertheless, scholars like (Finn and Lamb, 1991; Cronin and Taylor, 1992; as well as, Rust and Oliver, 1994) argue that the SERVQUAL model does not have the necessary aspects for appropriately measuring customer satisfaction by properly identifying expected and perceived quality. For instance, as stated by Cronin and Taylor (1992) and Finn and Lamb (1991), the mechanisms of SERVQUAL cannot fully be used in evaluating consumer perception in service quality especially in some of the industries. Additionally Rust and Oliver (1994), elaborates another example by providing a three-component model that explains service quality by enhancing service product, service delivery as well as, service environment. However, Brady and Cronin (2004), also make a suggestion of incorporating three service quality dimensions. These dimensions are service-outcome, interaction between consumer and employees, as well as, service environment. This clearly shows that the SERVQUAL model cannot be not solely utilized in measuring client satisfaction in any an organization.  Apple’s Service Quality within its retail units is crucial for improving satisfaction among customers. This has not only enhanced their retainment, but also created loyalty among the consumers. Therefore, the organization utilizes the SERVQUAL model in analyzing the gap between expectation and perceptions of the target consumers thus reflecting loyalty and satisfaction (Naik et al., 2010). Apple as an organization has proposed the use of SERVQUAL model in different areas that are related to customer satisfaction as well as consumer loyalty: 1. How it can satisfy its consumers by utilizing service quality (SERVQUAL) dimensions 2. How SERVQUAL dimensions are supposed to act as an imperative aspect in influencing consumer satisfaction. On the other hand, there is the SERVPERF model developed in 1992 by Cronin and Taylor that can also be utilized in measuring performance in an organization. This implies that there will be an improvement in customer satisfaction in Apple if properly utilized. This model is model evaluates quality service by looking at the perceptions of services delivered. The SERVPERF model assumes different ratings by comparing performance perceptions with its expectations and t measuring expectations directly is unnecessary. According to Babakus and Boller, 1992; Brady et al, 2002; and Carrillat et al., 2007 the SERVPERF should be utilized in Apple because it is a better alternative in measuring service quality. This is because of the fact that it clearly leads to measuring satisfaction of any organization.   Customer loyalty in Apple, UK A. Definition and explanation of customer loyalty at Apple: Apple has been described as one of the most consumer -orientated business. The organization has a good reputation as a tech company with most loyal clients. This is because of its aim in developing products that are client oriented and encouraging innovation in order to fully satisfy the clients. Additionally, the organization is aimed at offering products which are valuable to the consumers and adding value to their money. Therefore, there main focus is to maintain high-quality products and offer excellent services to their clients. Based on their need to increase the number of clients throughout the world, there is need for Apple to make sure that their clients are still satisfied. Therefore, building consumer loyalty is one of their cost-effective strategies that they are utilizing in expanding their consumer base. According to Times 100 (2012), already satisfied consumers are a good in advertising by word of mouth. Based on Lovelock and Wirtz, (2011) definition, consumer loyalty is the willingness of any client to continue to use an organization’s products without using products from other organizations. B. Factors affecting customer loyalty:  According to Blokdijk (2008), consumer loyalty has become one of the principal concern for numerous organizations especially Apple. Therefore, Apple has put in place several aspects affecting consumer loyalty. For instance, the organization has made sure to enhance the quality of their products. This is an aspect that has been mentioned and discussed by Blokdijk (2008). Additionally, Blokdijk (2008) bonuses as well as incentives offered by organizations are crucial factors that have been utilized in improving consumer satisfaction. Apples consumers have been influenced by difference aspects. As stated by Ndubisi (2007), some of the most important factors are: commitment, trust, communication as well as, conflicting handling. Cronin et al (2000), on the other hand states that consumer loyalty is affected by service quality which encourages patronage thus increasing satisfaction that is associated with any organization. Therefore, Apple’s products have been manufactured in a way that they will satisfy their customers. Therefore, product, service quality as well as customers attitude among others have played a huge significance in influencing customer loyalty in Apple.Inc. Relationship between satisfaction and loyalty According to Shaw and Reed (1999), customer satisfaction has a sequential structure that impacts busying thus influencing loyalty. Additionally, consumer satisfaction is a factor that influences the profitability as well as its success. This is because it leads to the success of any organization. Positive word from the clients is an aspect that clearly shows there is satisfaction in any company. Therefore, consumer satisfaction is considered as a fundamental aspect in the modern markets (Ranjbarian and Barari, 2009). Rashid (2003) on the other had describes the importance of creating the best relationships with the consumers. This is because it benefits the organization in many aspects especially in making profits. This means that the organization is able to achieve competitive advantage. This is influenced by the fact that customers respond with their loyalty to the company (Rashid, 2003). Therefore, it is clear that customers react to value added to them by buying Apple’s clients thus increasing consumer satisfaction, as well as, the approach of earning loyalty in the organization. Therefore, Apple has achieved consumer loyalty by making sure that they have explored the consumer trends in the UK and other areas that they have clients. Additionally, they have made sure to establish ways of communicating to the target marked in order to accurately measure their levels of promotion. Ensuring that they are competing properly with their rivals, they have made sure to take their products to the right place and also given consumers that power to negotiate. All these aspects as discussed by Benady (2006) have shown that there is improvement in Apple’s consumer satisfaction. For instance, the improvement in the quality of their products and service has helped immensely in improving customer satisfaction and thus creating customer loyalty. There are reduced customer complaints as mentioned by Fornell and Wernerfelt (1987). Additionally, there is improved communication between clients and employees. This has improved service in the immediate services and this has led to improved consumer satisfaction and loyalty. Reichheld and Schefter (2000) have also mentioned that customer satisfaction should also lead to a decrease the number of complaints. Therefore, a clear framework should be established as mention tined by Fornell et al (1999) in order to clearly define the link between customer satisfaction and customer loyalty. Therefore, it is clear that overall consumer satisfaction could lead to consumer loyalty and reduce customer complaints. Nevertheless, it is unclear if customer satisfaction might always lead to customer loyalty. This is because of the facts presented by Leverin and Liljander (2006), stating that consumer satisfaction forms a good basis for loyalty, despite the fact that it does not guarantee it. This because even satisfied consumers can switch to another product because of factors like price or availability. However, Leverin and Liljander (2006) concludes that effective loyalty programs have significant, as well as, positive impact on consumer loyalty. Bibliography Aaker, D. (2004). Leveraging the corporate brand. California Management Review, 41(3), pp. 102-24. Aaker, D. and Joachimsthaler, E. 2000. Brand Leadership. Free Press, New York, NY. Bain & Co. 2005.The new rules of luxury, Financial Times, 18 May, available at: www.bain.com/publications/articles/the-new-rules-of-luxury.aspx [accessed 8 June, 2015] Baines, P. Fill, C. and Page, K. (2013). Essentials of Marketing. Oxford: Oxford University Press Baines, P., Fill, C. and Page, K. 2010. Marketing. 2e., Oxford University Press: Oxford. Beatson, A., Lee, N., and Coote, L. V. 2007. Self-Service Technology and the Service Encounter. The Service Industries Journal, 27(1), pp. 75–89. Blythe, J 2012. Essentials of Marketing (5th Edition). Pearson Education: Harlow, UK. Boone, L. E and Kurtz, D. L. 2013. Contemporary Marketing, International Edition, 16e, Cengage Learning. Brown, M. (2015). The Brand Pyramid. Available at: http://www.mindtools.com/pages/article/brand-pyramid.htm [accessed 8 June, 2015] Bryman, A. and Bell, E. 2011. Business research methods. 3rd ed. Oxford University Press. Chen, M. and Liou, Y. I. 2002. Building a Knowledge-Enabled Electronic Commerce Environment. Journal of Computer Information Systems, 42(5), pp. 95-101. Choo, H.J., Moon, H., Kim, H. and Yoon, N. 2012, Luxury customer value, Journal of Fashion Marketing and Management, 16(1), pp. 81-101. Chowdhry, A. 2015. Apple Surpassed Samsung As Global Phone Market Leader, Says Report. Available at: http://www.forbes.com/sites/amitchowdhry/2015/03/04/apple-passes-samsung/ [accessed 8 June, 2015] Clark, K. McNeilly, M. 2004. IBMs Think strategy melding strategy and branding. Strategy & Leadership, 32 (2) pp. 44 – 48 Fornell, c and B, wernerfelt 1987. Defensive marketing strategy bu customer complaint management. Kotler, P. 1995. Meeting the Supervalue Challenge, in the Marketing Encyclopedia: Issues & Trends Shaping the Future, In J. Heilbrunn (ed.) Marketing encyclopedia : issues and trends shaping the future, Chicago: American Marketing Association: pp. 25-30. Kotler, P., and Keller, K. L. 2009. Marketing management. Upper Saddle River, N.J., Pearson Prentice Hall. Read More