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Customer satisfaction now represents a central strategic focus for customer-oriented firms
across diverse industries (Szymanski and Henard, 2001). In recent years, researchers have
focused their attention on measuring levels of customer satisfaction (Tse and Wilton, 1988;
Myers, 1991; Peterson and Wilson, 1992; Tom and Lacey, 1995; Hackl, Scharitzer and Zuba,
2000) and on the cues that signal services quality to customers (Carman, 1990; Parasuraman
et al. 1988, 1991, 1994). There has also been an attempt to better understand the dynamics of
the relationship that exists between satisfaction and service quality and the impact on
customer purchase intentions (Bolton and Drew, 1991; Cronin and Taylor, 1992; and Taylor
and Baker, 1994).
Australian supermarkets and grocery stores contributed AUD$38.3 billion and 26% of total
retail sales to June 1999 (IBIS, 1999) The supermarket sector of the retail industry is highly
competitive and stores operate in a mature market with slow growth opportunities and vie
fiercely for market share. Any factor which might influence profit in such conditions is critical
(Anderson and Mittal, 2000). Customer satisfaction has become a primary point of
differentiation in a market where consumers typically make a weekly trip to their preferred
supermarket and spend more on this trip than at other times (Kahn and McAlister, 1997).
Against this background of fierce competition in a mature Australian marketplace, a study
was designed to investigate customers¶ satisfaction levels with a range of key elements, which
contribute to the retail offer presented by ane Australian supermarket chain. Factors of
particular interest in a retail supermarket environment are ambience, friendliness of staff,
specialised foods on offer, merchandise variety, prices, check out procedure and accessibility.
The servicescape is describe ascovering such elements as physical layout of the service facility,
ambience, background music and that the servicescape can also affect customer¶s impressions of
and satisfaction with service´ (Lovelock, Patterson and Walker, 2001). Service quality or desired
expectations are defined as a blend of what the customer believes can be and should be (Zeithaml
and Bitner (1996).
The results for satisfaction indicate that customers are most satisfied with reputation quality of
service and accessibility. However, since these figure are based on a 10-point scale, there is a
lot of room for improvement since these figures suggest barely satisfying customers. An
important observation, however, is that the retailer seems to meet the needs of the customers
in those areas the customers consider important. There are differences across the postal
districts but these are not many. Postal Code area B seems to have the most satisfied
customers.
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These findings point to several implications for managers. Reputation is important whether it
is for quality, for cleanliness or for freshness of produce. People care about reputation as a
differentiator since most retailing is otherwise very similar. Access to the retail is important.
This might refer to availability of parking and the associated costs. Some factors indicated as
not important are possibly taken for granted. Businesses need to go beyond satisfaction to
attract and retain customers. Customers have become very demanding; hence the low scores
on most satisfaction measures. Large self-service retail chains cannot ignore the importance
placed by customers on the attribute of service quality. Customers value friendliness and
caring treatment and to succeed there is need to provide these especially in competitive
market. The results suggest customer service, might be an important antecedent to customer
loyalty and future patronage. In addition to gaining feedback on attributes of customer
satisfaction further work needs to be undertaken in the retail industry to better understand the
relationship between the store preference, perceived satisfaction and service quality. The retail
outlets chosen were representative of the retail landscape of Australia, the sample sizes were
large, and the measurements exhibited high reliability, and hence the results could be
generalisable.
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