Knowledge that Transforms

For consumers, evaluation of a service firm often depends on evaluation of the “service encounter” or the period of time when the customer interacts directly with the firm. Knowledge of the factors that influence customer evaluations in service encounters is therefore critical, particularly at a time when general perceptions of service quality are declining. The author presents a model for understanding service encounter evaluation that synthesizes consumer satisfaction, services marketing, and attribution theories. A portion of the model is tested experimentally to assess the effects of physical surroundings and employee responses (explanations and offers to compensate) on attributions and satisfaction in a service failure context.

Salespeople involved in the marketing of complex services often perform the role of “relationship manager.” It is, in part, the quality of the relationship between the salesperson and the customer that determines the probability of continued interchange between those parties in the future. A relationship quality model is advanced and tested that examines the nature, consequences, and antecedents of relationship quality, as perceived by the customer. The findings suggest that future sales opportunities depend mostly on relationship quality (i.e., trust and satisfaction), whereas the ability to convert those opportunities into sales hinges more on conventional source characteristics of similarity and expertise. Relational selling behaviors such as cooperative intentions, mutual disclosure, and intensive followup contact generally produce a strong buyer-seller bond.

Marketing academicians and practitioners have been observing for more than three decades that business performance is affected by market orientation, yet to date there has been no valid measure of a market orientation and hence no systematic analysis of its effect on a business's performance. The authors report the development of a valid measure of market orientation and analyze its effect on a business's profitability. Using a sample of 140 business units consisting of commodity products businesses and noncommodity businesses, they find a substantial positive effect of a market orientation on the profitability of both types of businesses.

Two studies were conducted to obtain insights on how consumers form attitudes toward brand extensions, (i.e., use of an established brand name to enter a new product category). In one study, reactions to 20 brand extension concepts involving six well-known brand names were examined. Attitude toward the extension was higher when (1) there was both a perception of “fit” between the two product classes along one of three dimensions and a perception of high quality for the original brand or (2) the extension was not regarded as too easy to make. A second study examined the effectiveness of different positioning strategies for extensions. The experimental findings show that potentially negative associations can be neutralized more effectively by elaborating on the attributes of the brand extension than by reminding consumers of the positive associations with the original brand.