۱- Introduction

۲- Background and hypotheses

۳- Methods

۴- Results

۵- Discussion

۶- Conclusions and limitations

References

Abstract

The basic objective of this study is to analyse the direct and indirect impacts of standardization and customization on customer satisfaction and loyalty through service quality. The service quality has two dimensions: technical quality and functional quality. A framework is developed by extending Grӧnroos’ model of service quality by including the antecedents of service quality. A questionnaire-based survey collected data from 315 customers of three service industries: healthcare, hospitality, and education. The data was analysed and the model validated using PLS-SEM. The findings show that: (1) integration of standardization and customization of service offerings is critical for improved service quality; (2) standardization has higher impact on service quality when compared to customization; (3) functional quality has higher impact on customer satisfaction when compared to technical quality; and (4) customer satisfaction has a significant effect on customer loyalty. The contribution of this study is the development of an integrated framework to analyse the roles of standardization and customization on service quality.

Introduction

Effectively managing customer service satisfaction and enhancing customer loyalty have been addressed by marketing practitioners and researchers (Blut et al., 2015; Rust and Chung, 2006; Zeithaml et al., 1996). Various studies have found that higher level of customer satisfaction ultimately leads to a greater customer loyalty and word of mouth recommendations (Yoo et al., 2015; Guo et al., 2009; Lai et al., 2009). The increase in competition in the marketing of products has forced companies to think about differentiating strategies for the purpose of attracting and retaining customers. Among the differentiation strategies that have been used by companies is the personalization of products to meet customer needs (Beatty et al., 2015; Tam and Ho, 2005). Customization, in particular, has become increasingly popular in comparison to standardization because customization allows consumers to specify the products that are suited to their desires (Jin et al., 2012). For example, Jin et al. (2012) demonstrate in their study how package-tour operators often tailor trips to fit travellers’ personal requirements. Standardization has been used to increase the comparability and credibility of economic evaluations and as a means of decreasing costs and increasing productivity (Krol et al., 2013). Traditionally, it has been viewed that standardizing a service while at the same time customizing it is somehow simply impractical (Almodóvar, 2012). This is because customization attempts to meet the needs and preferences of the individuals while standardization attempts to meet the needs and preferences of the masses (bus and transportation services). The traditional strategic options of service design view standardization to be suitable for focusing on many customers with low or no contact and customers are faced with onesize-fits-all services. At the same time, this traditional strategic option views customization to be suitable for focusing on specific customer characteristics and intensive customer contact with information from specific customers for one-of-a-kind service. This dichotomy has led many researchers to believe that any attempt to improve service quality by merging customization and standardization is impossible. However, this dichotomy is believed to be reconcilable based on Grӧnroos’ (۱۹۸۴) Service Quality model, where a possible window to integrate customization and standardization into a single framework exists. The degree of product customization has become higher in recent years and is likely to continue in the future.