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Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction

Author

Listed:
  • Vikas Mittal

    () (University of Pittsburgh, 360 Mervis Hall, Pittsburgh, Pennsylvania 15260)

  • Eugene W. Anderson

    () (University of Michigan, 701 Tappan Street, Ann Arbor, Michigan)

  • Akin Sayrak

    () (University of Pittsburgh, 364 Mervis Hall, Pittsburgh, Pennsylvania 15260)

  • Pandu Tadikamalla

    () (University of Pittsburgh, 258 Mervis Hall, Pittsburgh, Pennsylvania 15260)

Abstract

This paper draws on the quality profitability emphasis framework of Rust, Moorman, and Dickson (2002) (Rust, Roland T., Christine Moorman, Peter R. Dickson. 2002. Getting returns from service quality: Revenue expansion, cost reduction, or both. (October) 7–24.) to examine the association between customer satisfaction and long-term financial performance among firms that a dual emphasis (focusing on both revenue-expansion and cost-reduction simultaneously, rather than solely emphasizing one over the other). Using a longitudinal data set of 77 firms from the United States, we test this hypothesis and find that the association between customer satisfaction and long-term financial performance is positive and relatively stronger for firms that successfully a dual emphasis. We build on the work of Rust, Moorman, and Dickson (2002), who investigated the financial impact of engaging in the process of achieving a dual emphasis. Collectively, these studies show that while a dual emphasis is desirable for long-run financial success, the a dual emphasis may not be as financially rewarding in the short run. Firms pursuing a dual emphasis need to consider both short- and long-term consequences of their strategy.

Suggested Citation

  • Vikas Mittal & Eugene W. Anderson & Akin Sayrak & Pandu Tadikamalla, 2005. "Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction," Marketing Science, INFORMS, vol. 24(4), pages 544-555, August.
  • Handle: RePEc:inm:ormksc:v:24:y:2005:i:4:p:544-555
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    File URL: http://dx.doi.org/10.1287/mksc.1050.0142
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    References listed on IDEAS

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    Cited by:

    1. Vikas Mittal & Lawrence Feick & Feisal Murshed, 2008. "Publish and Prosper: The Financial Impact of Publishing by Marketing Faculty," Marketing Science, INFORMS, vol. 27(3), pages 430-442, 05-06.
    2. repec:eee:jbrese:v:82:y:2018:i:c:p:19-30 is not listed on IDEAS
    3. Patterson, Paul & Yu, Ting & Kimpakorn, Narumon, 2014. "Killing two birds with one stone: Cross-selling during service delivery," Journal of Business Research, Elsevier, vol. 67(9), pages 1944-1952.
    4. Alexandar Grubor & Nikola Milićević & Nenad Djokic, 2016. "The Effect of Inventory Level on Product Availability and Sale," Prague Economic Papers, University of Economics, Prague, vol. 2016(2), pages 221-233.
    5. Rust, Roland T. & Espinoza, Francine, 2006. "How technology advances influence business research and marketing strategy," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1072-1078, October.
    6. Ringle, Christian M., 2006. "Segmentation for path models and unobserved heterogeneity: The finite mixture partial least squares approach," MPRA Paper 10734, University Library of Munich, Germany.
    7. repec:bla:stratm:v:38:y:2017:i:2:p:384-394 is not listed on IDEAS
    8. Lun, Y.H. Venus & Shang, Kuo-chung & Lai, Kee-hung & Cheng, T.C.E., 2016. "Examining the influence of organizational capability in innovative business operations and the mediation of profitability on customer satisfaction: An application in intermodal transport operators in ," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 179-188.
    9. Steven M. Shugan, 2007. "The Editor's Secrets," Marketing Science, INFORMS, vol. 26(5), pages 589-595, 09-10.
    10. Daniel H. Simon & Miguel I. Gómez & Edward W. McLaughlin & Dick R. Wittink, 2009. "Employee attitudes, customer satisfaction, and sales performance: assessing the linkages in US grocery stores," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(1), pages 27-41.
    11. repec:kap:mktlet:v:28:y:2017:i:4:d:10.1007_s11002-017-9429-2 is not listed on IDEAS
    12. Feng, Zhi-Yuan & Wang, Ming-Long & Huang, Hua-Wei, 2015. "Equity Financing and Social Responsibility: Further International Evidence," The International Journal of Accounting, Elsevier, vol. 50(3), pages 247-280.
    13. Anna Torres & Josep A. Tribó, 2007. "Ownership structure, customer satisfaction and brand equity," Economics Working Papers 1016, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2007.
    14. Robert W. Palmatier & Srinath Gopalakrishna & Mark B. Houston, 2006. "Returns on Business-to-Business Relationship Marketing Investments: Strategies for Leveraging Profits," Marketing Science, INFORMS, vol. 25(5), pages 477-493, September.
    15. Cruz-Cázares, Claudio & Bayona-Sáez, Cristina & García-Marco, Teresa, 2013. "You can’t manage right what you can’t measure well: Technological innovation efficiency," Research Policy, Elsevier, vol. 42(6), pages 1239-1250.
    16. Gerard J. Tellis & Joseph Johnson, 2007. "The Value of Quality," Marketing Science, INFORMS, vol. 26(6), pages 758-773, 11-12.
    17. Orr, Linda M. & Bush, Victoria D. & Vorhies, Douglas W., 2011. "Leveraging firm-level marketing capabilities with marketing employee development," Journal of Business Research, Elsevier, vol. 64(10), pages 1074-1081, October.
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