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Proceedings of ISER-Science Plus International Conference, Bangkok, Thailand, 22

March 2015, ISBN: 978-93-84209-99-5

DETERMINANTS OF CUSTOMER EXPECTATIONS OF SERVICE:

IMPLICATIONS FOR FOSTERING CUSTOMER SATISFACTION

VU VAN THAI

EF, USSH, VNU-HCM

E-mail: vuvanthai@gmail.com

Abstract- This conceptual paper aims to identify the key determinants of customer expectations of service

(CEOS), which serves as the basis for fostering customer satisfaction. The literature review of customer

expectations of service is mainly based on the theories by Kotler (2002); Buttle (2004, 2008); Miller (1997);

Oliver (1997); Parasuraman, Zeithaml, and Berry (1985, 1988, 1991, 1994); and Zeithaml, Berry, and

Parasuraman (1993). Literature on the classification, levels, and determinants of CEOS is synthesized, which is

followed by the presentation of the significance of identifying the determinants of CEOS in enhancing customer

satisfaction. The paper comprises three main sections: (1) Features of service and service quality, (2) Concept

and types of customer expectations of service, and (3) Implications for fostering customer satisfaction.

Keywords- Determinants, Customer Expectations, Service, Customer Satisfaction.

I. INTRODUCTION

The term “customer expectations” has received

increasing treatment among researchers in the service

sector. Customer expectations have been explored in

various research contexts, but have been most

thoroughly investigated in the customer satisfaction

and dissatisfaction, and service quality research

studies (Zeithaml et al., 1993). There has been a

consensus in the related literature that “expectations

serve as standards with which subsequent experiences

are compared, resulting in evaluations of satisfaction

or quality” (op. cit., p. 1). Service quality entails

customer expectations, customer perception, and

customer satisfaction. This highlights the significance

of this study, which is intended to identify the key

determinants of customer expectations of service as

an essential step to enhance customer satisfaction.

When customers are satisfied with the service

performance, there will be a high probability of their

repurchase intention.

This paper may be of interest to those involved in

service quality management, and may inspire

empirical research in the area.

II. FEATURES OF SERVICE AND SERVICE

QUALITY

“A service is any act or performance that one party

can offer to another that is essentially intangible and

does not result in the ownership of anything. Its

production may or may not be tied to a physical

product,” defines Kotler (2000, p. 200). According to

Kotler, “services are often part of a company’s total

offering in the marketplace”, and he distinguishes

categories of service mix as follows:

 Pure tangible good: The offering is a tangible

good.

 Tangible good with accompanying services: The

offering consists of a tangible good accompanied by

one or more services.

 Hybrid: The offering consists of equal parts of

goods and services.

 Major service with accompanying minor goods

and services: The offering consists of a major service

along with additional services or supporting goods.

 Pure service: The offering consists primarily of a

service.

(op. cit., p. 200)

1. Features of service

Kotler (2000) identifies four features of services:

 Intangibility: Different from tangible goods,

services cannot be perceived via human five senses

before purchase. Therefore, customers are unsure of

what they are going to buy, and tend to search for

concrete signs of evidence in the physical

environment.

 Inseparability: Services are typically produced,

delivered and consumed simultaneously. It is notable

that both the provider and the customer are part of the

service, and there is a provider-customer interaction

during the process of service delivery. That is, the

customer really takes part in producing the outcome

of the service.

 Variability: Services are variable in that they

depend on who provides them, who receives them,

when and where they are delivered. The

heterogeneity results in various customers’ needs,

demands, expectations, tastes, moods, perception and

preference.

 Perishability: Services cannot be stored, resold or

returned.

In addition to the four features mentioned above,

services possess the following characteristics

http://abeuk.com/content/docs/syllabuses/L6_Travel_Tourism_a

nd_Hospitality_Operations_Management_dec11.pdf

Determinants of Customer Expectations of Service: Implications For Fostering Customer Satisfaction

Proceedings of ISER-Science Plus International Conference, Bangkok, Thailand, 22

March 2015, ISBN: 978-93-84209-99-5

 Delivery of services requires some degree of

human contact.

 Services quality control requires the monitoring

of processes and the attitudes of all staff.

 Bad services cannot be replaced or repaired.

 It is both difficult and undesirable to attempt to

standardize services.

2. Service quality

Quality is defined as the “totality of features and

characteristics of a product or service that bear on its

ability to satisfy stated or implied needs” (ISO 8402:

1986, 3.1).

In the service industry, service quality is recognized

as the degree of difference between customer

expectations and their perceptions of the service they

receive (Parasuraman, Zeithaml and Berry, 1985;

Bebko, 2000). Nicolaides (2008) specifies that

service quality is obtained in the following situations:

 Employees deliver a service which they are

proud of and are willing to put their name to.

 The service is delivered timely.

 The customer needs are met immediately and

appropriately right at the first time.

 The service delivered exceeds the customer

expectations.

 Service providers or employees are readily

accessible when needed.

II. DETERMINANTS OF CUSTOMER

EXPECTATIONS OF SERVICE

“Customer expectations are pretrial beliefs about a

product (Olson and Dover 1979) that serves as

standards or reference points against which product

performance is judged” (Zeithaml et al., 1993, p. 1).

Customer expectations are also defined as beliefs

about service delivery that serve as standards for the

judgment of the actual service delivered to the

customer (Zeithaml, Bitner & Gremler, 2009; Hill,

2000; Buttle, 2004; and Pizam, 2010).

1. Types of customer expectations of service

Zeithaml et al. (1993) identify two main approaches

to CEOS classification: “expectations-as-predictions

standard” and “expectations-as-ideal standard”.

Expectations-as-predictions standard

Zeithaml et al. (1993) mention researchers taking this

approach to customer satisfactions identification,

including Miller (1977), Swan and Trawick (1980),

Oliver (1981), and Prakash (1984). The concept

shared by these researchers is that “expectations are

consumer-defined probabilities of the occurrence of

positive and negative events if the consumer engages

in some behavior” (Oliver, 1981, p. 33; cited in

Zeithaml et al., 1993). Some related terms have been

accordingly coined:

 “expected standard” (devised by Miller, 1997)

referring to “an objective calculation of probability of

performance”, and

 “predictive expectations” (named by Swan and

Trawick, 1980; and Prakash, 1984) addressing

“estimates of anticipated performance level”.

Zeithaml et al. (1993) state that this approach has not

received total agreement by such researchers as Gilly

(1979); Gilly, Cron, and Barry (1983); and Swan and

Trawik (1980) themselves. These authors argued that

there a consideration of alternative standards should

be taken into consideration.

Expectations-as-ideal standard

Authors identifying this kind of CEOS include Miller

(1977), Swan and Trawick (1980), and Prakash

(1984). These authors concur that CEOS play the key

role in service quality evaluation by customers, and

that CEOS are viewed as desires or wants (Zeithaml

et al., 1993). Three related terms have been circulated

within the literature of this type of CEOS:

 “ideal expectations” (proposed by Miller, 1977)

meaning the “wish for” level of performance,

 “desired expectations” (generated by Swan and

Trawick, 1980) defined as “the level at which the

customer wanted the product to perform” (Zeithaml

et al., 1993, p. 2), and

 “normative expectations” (termed by Prakash,

1984) addressing the way performance is taken for

customer complete satisfaction.

In addition to the two approaches above, Zeithaml et

al. (1993) list other expectations standards as

elaborated below:

Other expectations standards

Zeithaml et al. (1993) describe a list of other types of

customer expectations standards proposed by Miller

(1977); Woodruff, Cadotte, and Jenkins (1983); and

Prakash (1984):

 “minimum tolerable expectations” (proposed by

Miller, 1977) referring to “the lowest level of

performance acceptable to the customer”,

 “deserved expectations” (proposed by Miller,

1977) “reflecting the consumers’ subjective

evaluation of their own product investment”,

 “experience-based norms” (devised by

Woodruff, Cadotte, and Jenkins, 1983) capturing not

only the ideal but also the realistic aspects of

customer expectations,and

 “comparative expectations” (named by Prakash,

1984) denoting “consumer expectations from other

similar brands”.

2. Levels of CEOS

Pizam (2010) shares the same view with Zeithaml et

al. (1993) that there have been two common

approaches to the nature of standards conveyed in

CEOS:

Determinants of Customer Expectations of Service: Implications For Fostering Customer Satisfaction

Proceedings of ISER-Science Plus International Conference, Bangkok, Thailand, 22

March 2015, ISBN: 978-93-84209-99-5

 predictive expectations, defined as the

predictions made by customers about their

experience, and

 ideal/desired expectations, defined as the level at

which customers want the service provider to

perform.

In an attempt to conceptualize the levels of CEOS,

Zeithaml, Berry, and Parasuraman (1993)

differentiate three kinds of service:

 “predicted service”: the level of service

customers believe they are likely to get;

 “desired service”: the level of service

representing a blend of what customers believe “can

be” and “should be” provided; and

 “adequate service”: the minimum level of service

customers are willing to accept.

These authors then devised the term “zone of

tolerance”, referring to the gap between the desired

service and the adequate service, which is illustrated

in Figure 1. They also distinguished “customer

satisfaction” from “service quality assessments” as

follows (Pizam, 2010):

 customer satisfaction resulting from customers’

comparison between predicted service and perceived

service, and

 Service quality assessments resulting from

customers’ comparison between desired service and

perceived service.

Johnston (1995) and Kotler (2000) clarify three levels

of customer satisfaction feelings created by the gap

between customer expectations and customer

perceptions, explaining that customers feel:

 Satisfied when their perceptions align with their

expectations;

 Delighted when their perceptions are better than

their expectations; and

 Dissatisfied when their experience does not meet

their expectations.

“These feelings of satisfaction influence whether the

customer buys the product again and talks favorably

or unfavorably about the product to others,”

concludes Kotler (2000, p. 101).

The heterogeneous nature of the service industry

leads to a variety of customer expectations of the

same service at the same time. Miller (1997) presents

a four-level scale of customer expectations:

 The ideal level (‘what can be’),

 The predicted level (‘what will be’),

 The minimum tolerable level (‘what must be’),

and

 The deserved level (‘what should be’).

Oliver (1997) integrates the “zone of tolerance”

proposed by Zeithaml et al. (1993), and the levels

above to form a framework below (Buttle, 2004):

Figure 1: Oliver’s customer expectations hierarchy (Source:

Buttle, 2004)

As described in Figure 1, CEOS range from the

“minimum tolerable level” to the “ideal level”,

constituting the “zone of tolerance” defined earlier.

The level below this zone is called “intolerable” at

which the delivered service is believed to result in

customer frustration and decrease their loyalty. The

“zone of indifference”, in which customers are

willing to accept the service delivered indubitably,

comprises three levels: “needed” to “deserved” and

“desired”.

“What the customer wants” capture five levels listed

in descending order here: “ideal”, “excellent”,

“desired”, “deserved”, and “needed”. “What the

customer predicts” embraces six levels, ascending

from “intolerable” to “desired”. The sharing zone

between “What the customer wants” and “What the

customer predicts” consists of three levels “needed”,

“deserved” and “desired”. This sharing zone is the

“zone of indifference” explained earlier.

3. Determinants of CEOS

In 1985, Parasuraman, Zeithaml and Berry proposed

the Gaps Model of Service Quality, which can be

used to measure service quality by identifying five

gaps below:

 Gap 1: between what customers expect and what

managers think customers expect

 Gap 2: between what managers think customers

expect and service quality specifications

 Gap 3: between service quality specifications and

actual service delivery

 Gap 4: between actual service delivery and the

promises communicated to customers

 Gap 5: between customers’ perceived service and

expected service

Determinants of Customer Expectations of Service: Implications For Fostering Customer Satisfaction

Proceedings of ISER-Science Plus International Conference, Bangkok, Thailand, 22

March 2015, ISBN: 978-93-84209-99-5

Zeithaml et al. (1993) develop the following model,

describing the nature and determinants of customer

expectations of service:

Figure 2: Nature and determinants of customer expectations of

service (Zeithaml et al., 1993)

This figure illustrates gap 5 in the Gaps Model of

Service Quality proposed by Parasuraman et al.

(1985), focusing on the nature and determinants of

customer expectations of service. The terms in Figure

2 are explained as follow

The determinants of desired service expectations

comprise endurance service intensifiers (derived

service expectations and personal service philosophy)

and personal needs:

 Derived service expectations: when customer

expectations are driven by another person or group of

people

 Personal service philosophy: underlying generic

attitude about the meaning of service and the proper

conduct of service providers

 Personal needs: the physical or psychological

well being of the customer - pivotal factors that shape

what customers desire

These are the key determinants of adequate service

expectations: predicted service, perceived service

alternatives, and situational factors:

 Predicted service: level of service that customers

believe they are likely to get

 Perceived service alternatives: other providers

from whom the customer can obtain service

 Situational factors: service performance

conditions that customer view as beyond the control

of the service provider

http://www.easynotecards.com/notecard_set/27606

Determinants of both desired and predicted service

expectations include explicit service promises,

implicit service promises, word-of-mouth

communication, and past (personal) experience:

 Explicit service Promises: personal and non-

personal statements about the service made by the

organization

 Implicit service promises: service related cues

that lead to inferences about what service should be

 Word-of-mouth communication: social

networking sites, very important in services that are

difficult for customers to evaluate before purchase

 Past (personal) experience: the customer's

previous exposure to service that is relevant to the

focal service

III. IMPLICATIONS FOR FOSTERING

CUSTOMER SATISFACTION

1. CEOS and customer satisfaction

Customer satisfaction is defined as “the customer’s

evaluation of a product or service in terms of whether

that product or service has met the customer’s needs

and expectations” (Zeithaml et. al., 2009, p.104).

The following illustration by Oliver (1980) highlights

the role of customer expectations as the cornerstone

for customer satisfaction which leads to customer

repurchase intention.

Figure 3: A model of expectation confirmation theory (Oliver,

1980)

Following are the reasons Buttle (2004) mentions to

explain the significance of the identification of

customer expectations in order to enhance customer

satisfaction:

 Customer expectations of service quality are

variable over time.

 Not all service quality attributes are subject to

customer expectations.

 Customers usually have certain expectations of a

number of service quality attributes, and not all of

these attributes are equally important.

 Customer expectations act as the basis for

customer satisfaction judgment.

 There are limits to each customer’s tolerance

zone.

Determinants of Customer Expectations of Service: Implications For Fostering Customer Satisfaction

Proceedings of ISER-Science Plus International Conference, Bangkok, Thailand, 22

March 2015, ISBN: 978-93-84209-99-5

2. Determinants of CEOS and customer satisfaction

A full awareness of the determinants of customer

expectations is the precursor to the identification of

customer expectations. Zeithaml et al. (1993, p. 6-10)

generate seventeen propositions which should be

taken into consideration in the effort to raise customer

satisfaction. These propositions fall under four

categories illustrated in Figure 2: the expected service

component, antecedents of desired service,

antecedents of adequate service, and antecedents of

both desired and predicted service:

The expected service component

 P1: Customers assess service performance based

on two standards: what they desire and what they

deem acceptable.

 P2: A zone of tolerance separates desired service

from adequate service.

 P3: The zone of tolerance varies across

customers.

 P4: The zone of tolerance expands or contracts

within the same customer.

 P5: The desired service level is less subject to

change than the adequate service level.

Antecedents of desired service

 P6: Enduring service intensifiers elevate the level

of desired service.

 P7: A positive relationship exists between the

level of personal needs and the level of desired

service.

Antecedents of adequate service

 P8: In the presence of transitory service

intensifiers, the level of adequate service will increase

and the zone of tolerance will narrow.

 P9: The customer's perception that service

alternatives exist raises the level of adequate service

and narrows the zone of tolerance.

 P10: The higher the level of a customer's self-

perceived service role, the higher the level of

adequate service.

 P11: Situational factors temporarily lower the

level of adequate service, widening the zone of

tolerance.

 P12: Two types of service quality assessments

are made by consumers: perceived service

superiority, which results from a comparison between

desired service and perceived service; and perceived

service adequacy, which results from a comparison

between adequate service and perceived service.

 P13: The higher the level of predicted service,

the higher the level of adequate service and the

narrower the zone of tolerance.

Antecedents of both desired and predicted service

 P14: The higher the level of explicit service

promises, the higher the levels of desired service and

predicted service.

 P15: Implicit service promises elevate the levels

of desired service and predicted service.

 P16: Positive word of mouth communication

elevates the levels of desired and predicted service.

 P17: A positive relationship exists between

levels of past experience with a service and the levels

of desired service and predicted service.

3. Scales for measuring customer service

expectations

Parasuraman, Zeithaml, and Berry (1994b)

incorporate the expanded conceptualization of

customer expectations in their three alternative

service quality measurement formats in which there

are applicable scales for identifying CEOS.

 Three-Column Format: This format generates

separate ratings of desired, adequate, and perceived

service with three identical, side-by-side scales.

 Two-Column Format: This format generates

direct ratings of service-superiority and service-

adequate gaps ... with two identical, side-by-side

scales.

 One-column Format: This also generates direct

ratings of the service-superiority and service-

adequate gaps

(op cit., p. 204-205)

CONCLUSION

Customer expectations play the key role in

customers’ evaluation of service quality (Zeithaml et

al., 1993; Gronroos, 1982; Lehtinen and Lehtinen,

1982; Parasuraman, Zeithaml, and Berry, 1985, 1988;

and Brown ans Swartz, 1989). In the service sector, to

increase customer repurchase intention, it is crucial to

enhance service quality. Enhancing service quality

requires fostering customer satisfaction. In order to

foster customer satisfaction, it is essential to be aware

of customer perception of service experience. A deep

awareness of customer perception cannot be obtained

without identifying customer expectations. It has

been recognized via the discussion in this paper that a

full understanding of customer expectations results

from a deep knowledge of the key determinants of

customer expectations.

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