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Critique of the service-profit chain - Essay Example

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The opposite is also true. Unsatisfied customers will still tell others which will lead to loss of customers meaning a loss in revenue. The relationship between services and profits is mainly pegged on the quality of the service, the customer satisfaction and ultimately customer loyalty. There is a major difference between customer satisfaction and quality. Parasuraman claims that while customers usually decide whether they are satisfied after an experience, the quality has to be decided way before the experience (1991). This means that there is no precedent to quality. Customers can learn about the level of service offered by a service provider from a number of sources. However, for them to decide whether the service quality they have learned about meets their standards, they have to experience it themselves. Marketing is a very important concept in the success of any business. Many marketers have realized the role that service quality plays in the overall satisfaction that results from that service (Valerie et al 1996). Service quality and the resultant satisfaction have been described as being “indices of competitive benefit” (Ruyter 1997). The major point of focus is on the service quality rather than the product quality. This is because while the quality of a product can be predetermined and standardized, the same does not hold true for a service. When service quality has been determined, the customer is then satisfied. This leads to the customer being loyal to that service. Loyal customers usually make the basis for a successful business (Caruana 2002). The loyal customers with their repeat business together with the...
The paper tells that the service-profit chain is a good theory that assisted and continues to assist many organizations to make profit through the satisfaction of its employees and in turn its customers. In many sectors like in banking, hospitality and retail, the overall profitability is in most cases pegged on the satisfaction of customers. This is because in these sectors, competition is usually very stiff and many customers who are not satisfied by one operator usually find satisfaction in the competition. However, the service-profit chain is not applicable to the sale of essential products like prescription drugs or in the case of monopolies where there are single products in the market. While arguments and counterarguments have been presented that have been aimed at establishing the viability and validity of the service-profit chain, it is important to recall some simple facts. First, in cases of single business units, there has been evidence of a relationship between the job satisfactions of employees with the satisfaction of customers. Second, in the researches that have been cited on the validity of the service-profit chain, there has been evidence that the companies that are most focused on the satisfaction of customers are the ones that attract loyalty from customers. Third, there has been no numerical fact that have been cited by all researchers (for or against of the service-profit chain) that suggests whether it hold true or not and all assertions have been hypothetical and lastly, there has been evidence that the service-profit chain does not hold true for all business models. ...Show more
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Summary

According to the research findings the service-profit chain is still very much relevant into the business environment today although studies have to be further done on the topic to establish and attempt to measure the variable that determine to what extent it is relevant. …
Critique of the service-profit chain
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