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CHAPTER 2LITERATURE REVIEW2.1.1 Customer satisfactionCustomer Satisfaction is a term used by the companies that the products or services offered meet orsurpass the expectation of their customers. Greenwell describes customer satisfaction as the postpurchase, judgment, connected with the purchase decision and tends to return again back for thepurchase (2002). In addition to that, Oliver argued that customer satisfaction as a psychologicalbehavior and in action.Customer satisfaction has shown itself to be an increasingly important determinant of a business'ssuccess and this is arguably more so in relation to the cafe industry. Studies have been undertakenwhereby it was concluded that satisfied customers are central to the long term success of a business.It should be mentioned that the linkage between customer satisfaction and customer behavior
(return customer patronage) has been well documented in marketing literature. Customersatisfaction is defined in Oliver’s (1997) study as the consumer’s fulfillment response. It is ajudgment that a product or service feature, or the product or service itself, provides a pleasurablelevel of consumption related fulfillment. In other words, it is the overall level of contentment with aservice/product experience (Andaleeb & Conway, 2006).Anderson and Fornell (2000) assume businesses exist and compete to create satisfied customers.Investors are attracted to companies that can perform well at satisfying their customers. Itemphasizes that business prosperity would not be able to bloom without increasing customersatisfaction. It is not the amount of goods and services a company can produce that leads to itssuccess but how well the business satisfies its customers so they will return and keep the businessgrowing. The early study on customer satisfaction emphasized that achieving high customer satisfaction cangenerate more new and repeat purchases and favorable word-of-mouth communication, which inturn will lead to higher revenue and profits (Tam, 2011). At early studies, researchers have alsofound a strong relationship between satisfaction and loyalty as shown by study by Bearden and Teelin 1983 (Andaleeb & Conway, 2006). Study by Szymanski and Henard in 2001 in their meta-analysis, also indicated 15 positive and significant correlations between the two constructs.However, in fact Jones et al. in 1995 argue that this relationship is not a simple linear one butaccording to several cause-related attributes. More recent studies place more focus in exploring more attributes surrounding the customersatisfaction and its impacts on the former. Service quality has been found to be able to predictcustomer satisfaction more than what customer perceived value does. The study also emphasizedthat customer value has an indirect effect on customer relationship management performance andbrand loyalty mediated by customer satisfaction. Price and quality is an important factor forcustomer satisfaction which leads to marketing managers’ decisions complexity nowadays asmarkets are becoming more and more complex and overloaded. In another words, in this