Social Interaction Service Performance as Solution for Marketing

SMEs of Social Interaction Service Provider

Arief Adhy Kurniawan

, Kartawan

and Sri Murni Setyawati

Economic Faculty Jenderal Soedirman University Purwokerto, Indonesia

Economic Faculty Siliwangi University Tasikmalaya, Indonesia

Keywords: Social interaction service performance.

Abstract: Research on the quality of service has been done, but research on the variable quality of services that

specifically provide services for social interaction has not been done. The selection of social interaction

service performance variables is a solution for a research gap between image variables, environment quality,

interaction quality, service standardization and service customization with customer satisfaction. Social

interaction service performance is a synthesis of the grand theory of service marketing theory and social

identity theory. The research was conducted on consumers who are doing social interactions in restaurants,

cafes or other traditional stalls. The results of this study are expected to provide solutions to the problems of

research gap and identify the effect of social interaction service performance on customer satisfaction and

interest to make repurchase and the intention to recommend purchases to others. These two intentions are

keys to marketing success in small and medium-sized micro businesses.

1 INTRODUCTION

Given the importance of consumer satisfaction in

marketing management of SMEs, it is necessary to

identify the variables that affect the consumer

satisfaction. Tse and Wilton (1988) who conducted

research on potential consumers in a trial of a new

electronic test market, stated that subjects in a good

performance will make consumers feel more

satisfied. Ladhari, Souiden, and Dufour (2017) stated

that one of the variables that affect consumer

satisfaction is the quality of service. Kandampully

(2000) stated that a company's competitive advantage

can be preceded by the quality of service. Quality of

service makes the products sold become more

valuable.

A study by Skalpe and Sandvik (2002) explained

the importance of service quality, this research

supported research (Bernhardt, Donthu, & Kennett,

2000), which found that overall customer satisfaction

is associated with sales growth and profitability in

restaurants. Both studies found evidence to support

the fact that the long-term effects of service quality

are more important than short-term strategies.

Soriano (2003) stated that the most prepared

restaurants are restaurants that anticipate consumer

expectations and build services that offer different

qualities. This will make the company most likely to

survive and become a profitable company in the

future. Augustyn (1998) stated that the majority of

SMEs accept the service quality importance to

maintain a competitive advantage, they primarily pay

attention to their facilities or products.

It shows how important the quality of service in the

business, so quality service makes consumers feel

satisfied (Patterson & Spreng, 1997). The research

that supports the influence of service quality on

customer satisfaction of banking company customer

(Mosahab, Mahamad, and Ramayah, 2010).

Mosahab et al. (2010) examined the perception of

service quality consisting of reliability,

responsiveness, assurance, empathy, and tangibles.

This shows that SMEs whose employees have

reliability have responsiveness in providing services,

the guarantee, individual attention and physical form

can potentially provide a sense of satisfaction in the

consumer banking companies. The positive influence

of the perception of service quality on customer

satisfaction shows that the better the service quality

the more satisfied the feeling of a consumer

(Rajaguru, 2016; Ratanavaraha, Jomnonkwao,

Khampirat, Watthanaklang, & Iamtrakul, 2016; Ryu

Adhy Kurniawan, A., Kartawan, . and Murni Setyawati, S.

Social Interaction Service Performance as Solution for Marketing SMEs of Social Interaction Service Provider.

DOI: 10.5220/0009947704370445

In Proceedings of the 1st International Conference on Recent Innovations (ICRI 2018), pages 437-445

ISBN: 978-989-758-458-9

437

& Han, 2010; Su, Swanson, & Chen, 2016; Yoo &

Park, 2016).

Making consumers feel satisfied is not as easy as

imagined. Oliver (1977) stated that the model used to

describe the occurrence of satisfaction is known as

the disconfirmation model of hope. This model shows

that satisfaction depends on customer expectations.

Their performance perceptions are related to those

expectations. One implication of this model is to

ensure satisfaction, management is unnecessary (and

should not) focus exclusively on improving

performance. Resources must also be devoted to

managing customer expectations. Achieving

satisfaction can be a complicated and critical process.

The roles played in-service meetings by service

personnel and consumers contribute to this. A truly

satisfied customer is hard to find, a truly disgruntled

customer is also an elusive creature. One should

understand the level of customer satisfaction, it may

also be more important to understand the cause of

satisfaction or dissatisfaction (Mudie & Pirrie, 2006).

Consumer satisfaction becomes one of the

marketing orientations of SMEs because with the

creation of consumer satisfaction it will make

consumers come back to do the transaction. This is in

accordance with the results of the research of Su,

Swanson, and Chen (2016), which stated the positive

influence of overall consumer satisfaction on the

intention to repurchase. This shows the more satisfied

a consumer will be the stronger intention to make

repurchase (Han & Hyun, 2017, Kim, 2012; Ryu,

Lee, & Gon Kim, 2012; Su, Swanson,

Chinchanachokchai, Hsu, & Chen, 2016; Tsai &

Huang, 2007).

In addition to growing intent to repurchase,

consumer satisfaction also raises the willingness of

consumers to recommend transactions to others.

Recommending purchases to others is an efficient

promotion because SMEs do not spend expensive

promotional costs with various existing promotional

media. Reduced cost of this promotion will be able to

increase competitiveness in the selling price, or can

also increase operating profit. Consumer satisfaction

positively affects the intention to recommend

purchases to others, meaning the more satisfied a

consumer the stronger the intention to recommend

purchases to others (Altunel & Erkut, 2015; Finn,

Wang, & Frank, 2009; Han & Hyun, 2017; Kim,

2012; Su, Swanson, Chinchanachokchai, et al., 2016;

Zhu, Sun, & Chang, 2016).

The quality of good service will encourage a

consumer to intend in behaving (Rajaguru, 2016).

Such behavior can be either repurchase and also

recommend to others. The better the quality of service

will make the stronger the intention to make a

repeated purchase. Cho's (2015) shows a positive

influence of the perception of quality in order

fulfillment has a positive effect on the intention to

repurchase at online store companies. Quality of

service also determines a consumer to express his

shopping experience to others, so that others also feel

the quality of service perceived. This shows the

positive effect of the quality of service on

communication from mouth to mouth, that is, the

better the service quality the stronger the intention to

convey the experience of transacting with the hotel

company to others (Alexandris, Dimitriadis, &

Markata, 2002; Liu & Lee, 2016).

The company provides quality services because

the company already has a certain image. The overall

image is general perception reflected in the

relationships that exist in the customer's memory

(Keller, 1993). The image as a whole perception of a

product or company developed based on information

obtained and processed Assael (1984). The definition

of the overall image refers to consumer beliefs,

impressions, and ideas about a company, brand,

product, service, or purpose (Rein, Kotler, & Haider,

1993).

The image is a vital variable that plays an

important role in the formation of intent along with

customer satisfaction, which is often considered to

have the strongest relationship with intention. The

image is shaped by the customer's overall evaluation

of the firm and its offerings, or even assessed the

image projected by a particular product category

(LeBlanc & Nguyen, 1996). It is often suggested that

images along with other important variables need to

be incorporated into the theoretical framework of

customer decision making (Brunner, Stöcklin, &

Opwis, 2008). So that the image is not lost when the

company trying to improve the quality of service, in

other words, the stronger the image of a company

then the better the quality of service provided. Han

and Hyun's (2017) showed the positive effect of the

company's image on the quality of service, it showed

that companies that have a good image will provide

quality services so that the image is stronger inherent

in the minds of consumers.

In addition to the environmental quality, the

image can also affect the quality of service. The

concept of atmospherics as a marketing tool and

defined it as the design of the purchasing environment

to generate certain emotional effects on buyers that

increase their purchasing opportunities Kotler (1973).

Baker (1987) discussed how the physical

environment affects customer perceptions of service.

Bitner (1992) coined the term servicescape to

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describe the man-made physical environment in

which a service product is delivered. Bitner (1992)

stated that the physical environment stimulates the

internal responses of customers and employees and

shapes behavior. This phenomenon is an important

component of customer satisfaction with service.

Consequently, an appropriate physical environment

produces good behavioral intentions (Ryu et al.,

2012). In a good environment and supporting a

business, a consumer will feel better served. Ali, Kim,

and Ryu (2016) conducted research on aviation

service consumers. The results showed that the

quality of physical brilliance can affect consumer

satisfaction. El-Adly and Eid (2016) who examines

consumers in a modern shopping venue stated that the

quality of physical pleasure can affect customer

satisfaction. Likewise with research by Han and Hyun

(2017) stated the quality of physical harm can affect

the satisfaction of restaurant consumers. The quality

of the physical environment also determines the

quality of service of the airlines (H.-C. Wu & Cheng,

2013). This means that the better the physical

environment then the consumer will have a better

perception of the quality of service.

There are times when the waiter of a company has

a good relationship with the consumer. Employees

are trying to the maximum to not disappoint

consumers already familiar. Some researchers stated

the importance of the service delivery process

because people have a major impact on the perception

of overall service quality (Grönroos, 1982; LeBlanc,

1992). The quality of interaction in providing services

includes several things, including interpersonal skills,

staff usefulness, staff friendliness, staff knowledge,

fast troubleshooting, service performance, and

ordering accuracy (Clemes, Gan, & Ren, 2011). This

shows the better the quality of interaction between

waiters with consumers then the waiter will provide

the best quality of service to consumers. This is in

accordance with the results of the research that there

is a positive effect of interaction quality on service

quality (Clemes et al., 2011; H.-C. Wu & Cheng,

2013).

Quality of service will also be good if the

company provides services in accordance with the

needs, therefore required customization services.

Customization is necessary because customers

express their needs according to their specific needs

and this can help marketers to truly meet customers'

specific needs (Wind & Rangaswamy, 2001). The

services offered by the company range from one

measure of conformity to all full standards, to be fully

personalized, called customization. The advantages

of service customization include greater perceived

control and higher consumer satisfaction (Kasiri,

Cheng, Sambasivan, & Sidin, 2017). Customization

improves perceived service quality, customer

satisfaction, customer trust, and ultimately customer

loyalty to service providers. Customization has an

immediate and mediated effect on customer loyalty

and interacts with the effects of customer satisfaction

and customer trust on loyalty (Coelho & Henseler,

2012). This means that the company oriented to

provide services according to the needs of consumers

will improve the quality of service. It also means a

company oriented to provide unique services i.e

services that are not provided by other companies will

try to provide better service quality. The influence of

service customization on service quality is also

explained by Kasiri et al. (2017).

In addition to customization in service, there is

also standardization in the service. Standardization is

a process of arranging common characteristics that

are uniform for certain goods or services.

Standardization is used to help control management,

predict and minimize errors, and reduce deviations

among employees (Jones, Nickson, & Taylor, 1994).

Standardization also provides a means to maintain

reliability and free from defects. Other benefits

associated with standardization include contract

facilitation, execution monitoring, and pricing in

service delivery, enhanced consumer protection, and

consumer trust and satisfaction. In contrast,

customized products or services are defined in the

context in which new products are provided with

variations in the existing configuration (Kasiri et al.,

2017; Tsaur, Wang, Yen, & Liu, 2014).

Standardization in marketing strategy is not new, but

researchers have not agreed that which strategy is

better to serve the international market. However,

local and traditional markets need to be further

identified. Standardization strategies are used to

achieve economies of scale and are used when the

target market has the same needs and wants (Hussain

& Khan, 2013). In the study of Kasiri et al. (2017)

service standardization variables affect the quality of

service, even standardization more affect the quality

of service when compared with customization. Kasiri

et al., (2017) also resulted in the influence of

customer satisfaction on customer loyalty. According

to Tsaur et al. (2014) improvement of work,

standardization can affect the improvement of service

quality.

There are five variables that are identified positively

affect the quality of service they are an image,

environment quality, interaction quality, service

standardization, and service customization. Variable

quality of service is also influenced by consumer

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439

satisfaction, intention to repurchase and also the

intention to recommend purchasing to others. Last is

the influence of consumer satisfaction on the

intention to repurchase and the intention to

recommend to others. So, the relationship among

these variables places the quality of service as a

mediation variable between image, environment

quality, interaction quality, service standardization

and service customization with customer satisfaction.

2 RESEARCH GAP

The concept of the relationship among variables from

several studies can result in the conclusion of the

relationship among variables that differ from one

research to other research. In this study, there are

several variables that are identified affect the

consumer satisfaction, and there is no effect on

customer satisfaction. These variables include an

image, environmental quality, interaction quality,

service standardization, and service customization.

Several research results that state that there is a

relationship and no relationship can be seen in the

research gap table as listed in Table 1.

Based on Table 1 there is influence between

influential corporate image variables and consumer

satisfaction. There are several studies that have been

identified and show the influence of corporate image

on customer satisfaction (Albaity & Melhem, 2017;

Lahap et al., 2016; Lai et al., 2009; Loi et al., 2017;

Lombart & Louis, 2014).

Although there are several identifiable studies that

resulted in the impact of the corporate image on

customer satisfaction, there are also studies that result

in the conclusion that corporate image has no effect

on future beliefs, behaviors and behavioral intentions

(Lombart & Louis, 2014). San Martín et al. (2018)

identified that the cognitive image has no effect on

the perception of quality, but the perception of quality

affects consumer satisfaction.

Consumer satisfaction is also influenced by the

physical environment. A good physical environment

will make consumers feel more satisfied (El-Adly &

Eid, 2016; Han & Hyun, 2017). There are research

results that stated the environment does not directly

affect the satisfaction, i.e research conducted by (Xie

et al., 2017). Han and Ryu (2009) examined the effect

of the environment on three variables namely

decoration, spatial and surrounding conditions.

Among the three variables studied two variables did

not affect the satisfaction of the spatial and the

surrounding conditions. Xie et al. (2017) formulated

a research model consisting of eight models of

regression analysis. Among these models connect the

environment with satisfaction and make the

environment a moderating variable. One of the results

of the study is that the institutional environment does

not moderate the relationship between corporate

social responsibility efforts and customer satisfaction

so that an established institutional environment does

not enhance the positive relationship between

corporate social responsibility efforts and customer

satisfaction. The result of regression analysis shows

that the environment has no direct effect on

satisfaction.

The quality of the interaction between the company

and the consumer also affects consumer satisfaction

(Joon Choi & Sik Kim, 2013; Srivastava & Kaul,

2014; T. Wu et al., 2018). The results of this study

show that the better the interaction of the company

through its employees in interacting with consumers

will make consumers more satisfied. The quality of

interaction does not always affect consumer

satisfaction as research conducted by (Kurucay &

Inan, 2017).

Standardized service is also one of the variables

that affect consumer satisfaction. This is in

accordance with research (Chiang & Wu, 2014;

Karatepe et al., 2004; Lynch & LeFort, 2016; Wang

et al., 2010). This shows a standardized service to

keep consumers satisfied. Nevertheless, there is a

study that states that standardization does not affect

consumer satisfaction, namely research Chiou and

Droge (2015). Other studies linking standardization

with company performance, the result of

standardization did not affect the performance of

Samiee and Roth (1992). This shows that

standardization does not always have a good impact

on the company. In addition to standardization, there

is also a customization of service, the service is more

flexible in adjusting to the environment or with the

culture where consumers do the transaction. These

customizations can affect customer satisfaction. This

is in accordance with research

3 ORIGINALITY RESEARCH

Social interaction service performance is derived

from the results of the theory of social identity theory.

In theory, it is said to be part of an individual self-

concept derived from his knowledge of his

membership of a social group along with the

emotional significance attached to the membership

(Fielding, McDonald, & Louis, 2008; Tajfel, 1974).

People in one group tend to behave similarly to their

group members.

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Table 1: Research gap

No Exogenous-Endogenous

Variables

Supportive research Unsupportive research

1 Image - Satisfaction (Lai, Griffin, & Babin, 2009)

(Lahap, Ramli, Said, Radzi, &

Zain, 2016)

(Loi, So, Lo, & Fong, 2017)

(Albaity & Melhem, 2017)

(Lombart & Louis, 2014)

(San Martín, Herrero, & García

de los Salmones, 2018)

2 Environmental Quality-

Satisfaction

Ali et al. (2016)

El-Adly and Eid (2016)

Han and Hyun (2017)

Xie, Jia, Meng, and Li (2017)

3 Quality of interaction -

Satisfaction

(Srivastava & Kaul, 2014)

(T. Wu et al., 2018)

(Joon Choi & Sik Kim, 2013)

(Kurucay & Inan, 2017)

4 Service standardization -

Satisfaction

(Lynch & LeFort, 2016)

(Wang, Wang, Ma, & Qiu, 2010)

(Karatepe, Avci, & Arasli, 2004)

(Chiang & Wu, 2014)

(Samiee & Roth, 1992)

(Chiou & Droge, 2015)

5 Service customization-

Satisfaction

(Kasiri et al., 2017).

(Coelho & Henseler, 2012)

(Wang et al., 2010)

(Coelho & Henseler, 2012; Kasiri et al., 2017). Also

showing that service customization has no effect on

customer satisfaction as did Wang et al. (2010).

Based on the perspective of social identity, a specific

social identity becomes the basis of justification for

the individual. Individual behavior is based on group

behavior and guided by social or group norms. The

process of self-categorization in terms of the outcome

of a particular social identity results in similarities

between group members and other group members.

Thus, the behaviors and expectations of other group

members will act as guidelines for appropriate

behavior, especially when social identity is important

for self-concept (Fielding et al., 2008).

In addition to social identity theory, there is also

A Theory of Social Interactions (Becker, 1974). A

Theory of Social Interactions uses simple economic

theory tools to analyze the interaction between the

behavior of several people and the characteristics of

different people. Social interaction is a process of

mutual stimulation and interactivity between two or

more people (Hari & Kujala, 2009; Moulay, Ujang, &

Said, 2017). The measure of social interaction is,

among other things, the amount of time people spend

in that place, reflecting their public involvement in

the open and the intensity of contact (Carmona,

Tiesdell, Heath, & Oc, 2010). Based on the critical

components of social interaction, then this study

discussed the performance of services used to serve

social interaction (social interaction service

performance), and feelings of satisfaction felt by

members of social interaction satisfaction.

Social identity theory (Jiang et al., 2016) did

research with one of the exogenous variables that

were social identity. From the result of this

research,

social identity has a positive effect on intention.

Therefore this research tries to connect social

interaction service performance with repurchase

intention and recommendation intention.

Variable of service performance is much studied

with the name of service quality. Quality of service

was first mentioned in service marketing theory

(Rathmell, 1974). Rathmell (1974) tried to use

traditional concepts and models of consumer

marketing theory in service marketing. Furthermore,

based on service marketing theory, Grönroos (1982)

tried to formulate a model of service quality.

According to the model of service quality, the total

quality of service is a function of three components

consisting of a corporate image, technical quality, and

functional quality. Research on service quality

continues to grow until (Alhelalat et al., 2017)

introduced Functional And Personal Aspects Of

Service.

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441

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Figure 1: The synthesis process of social interaction service

performance and social interaction satisfaction variables

Parasuraman, Zeithaml, & Berry, (1985),

explained the determinants of quality perception

consisting of ten dimensions they are service quality

access, communication, competence, courtesy,

credibility, reliability, responsiveness, security,

tangibles, and understanding / knowing the customer.

(Parasuraman, Zeithaml, & Berry, 1988) classified

ten dimensions of service quality into five

dimensions: tangibles, reliability, responsiveness,

assurance, empathy. So in providing quality services

to consumers can be done by using dimension that is

tangibles, reliability, responsiveness, assurance,

empathy. However, these dimensions have not been

applied to consumers of a group nature. Therefore in

this study used variable social interaction service

performance or service performance to provide

services to a group that is doing interaction between

individual members of the group.

Synthesis process of social interaction service

performance variables and social interaction

satisfaction showed in Figure 1.

4 RESEARCH BENEFITS

4.1 Theoretical Benefits

The results of this study are expected to solve the

problems found in relation to the research gap

between image, environmental quality, interaction

quality, service standardization, and service

customization to customer satisfaction, by placing

one new variable as the mediation variable that is the

social interaction service performance variable.

4.2 Practical Benefits

The results of this study can be used by the

management of SMEs in the field of restaurant or cafe

to determine the marketing strategy by providing

services by creating space services and service

facilities for consumers in social interaction.

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