9.

Introduction

This concluding chapter attempts to delineate and summarise the significant contributions of this study and examine their general implications for the postconsumption literature, particularly the Expectancy Disconfirmation Paradigm (EDP), which is the theoretical foundation for the current study. As acknowledged earlier, this study also envisages that the findings should be significantly useful and actionable for the industrys practitioners. Importantly, as to date no research pertaining to customer satisfaction with the direct sales channel has been undertaken and reported, it is therefore believed that the findings of this research could shed new light to the existing marketing literature and enlighten the industry practitioners as to direct sales consumers postconsumption behaviours. This is followed by recommendations for potentially fertile future research directions. Finally the overall conclusion of this study will be drawn.

9.2

Contributions and Implications for Marketing Theory

This thesis provides several contributions in the challenge to add new insights and understandings to the existing knowledge, specifically in the field of customer satisfaction theory. It is important to note that some of the major contributions have been identified and discussed simultaneously in the preceding chapter when addressing the research questions. This section focuses on the studys principal contributions which were derived from the research questions and discusses their implications for the marketing literature. In fact, several important contributions, which have not been acknowledged in the preceding chapter, will be discussed here.

First, this thesis extensively explores the literature pertaining to the direct selling distribution system (see review of the industry in Chapter 2). The effort to bring to light the nature and structure, facts and statistics with regard to this hidden industry should not be undervalued. Direct selling is a business activity which is familiar to most people, reported to have significant economic and social impacts to most countries, used as a distribution strategy to capitalise on international markets, and yet is scarcely documented publicly. This study responds to the calls for advanced research on the direct selling context made by various scholars in the marketing disciplines such as Brodie et al. (2002a, 2002b), Barnowe and McNabb (1992), Camey (1997), Ingram (1992), Peterson and Wotruba (1996) and Raymond and Tanner (1994). 357

Second, the study has offered several methodological contributions; the most significant is the development of robust measures for the study enabling empirically testing a hypothesised structural model which was developed based on theory, findings of previous research and exploratory enquiry. Given the paucity of advanced research into post-purchase consumer behaviour in the direct sales context, the measures of the core constructs (e.g. direct selling product, direct seller and direct selling firm performance/disconfirmation) had to be developed (see Section 5.6). In order to purify the measures, the author stringently adhered to guidelines suggested by Churchill (1979), and in turn, the resulting measures were refined and validated according to Anderson and Gerbings (1988) suggestions by using the SEM analytical technique. The measure validation process is illustrated explicitly in chapter 5 (see Section 5.6.4) and chapter 7 (see Section 7.4). It is worthwhile to note that in assessing the measures validity and reliability, all established methods were used as suggested in the SEMrelated literature. For example, four methods were used to evaluate reliability and four techniques were employed to assess the scales discriminant validity. It could be argued that the current investigation is among the very few to have done this, with the notable exception of De Wulf (1999) and Koufteros (1999).

The conceptual ideas and supporting empirical evidence revealed in these two streams of research (customer satisfaction and direct sales industry) serve as guiding parameters for selecting and developing the customer satisfaction constructs which were integrated and rationalised to formulate a comprehensive and justifiable model. This allows for further investigation and utilisation of the scientific approach in testing the hypothesised model. This attempt was in line with VanScoyoc (2000), who acknowledged that theory formulation and model development and verification are paramount in the pursuit of academic research. Ultimately, through rigorous model testing and validation, this study was successfully able to model the determinants and outcomes of customer satisfaction at the subsystem and global levels.

The measures that have been assessed rigorously were found to have adequately achieved measurement quality such as unidimensionality, validity and reliability, and the model achieved adequate overall fit. Therefore, it is believed that this thesis could impart both essential SEM procedural steps and fundamental knowledge, the first will be particularly useful for the novice researcher, and the second for researcher who is 358

contemplating the adoption of this advanced analysis technique. In addition, it should be noted that the scales used in the current study were context-specific; hence, this could prevent chameleon effects which can cause the meanings of items to vary according to study context (Giese and Cote 2000). Therefore, this indicates that if any replication study was to be carried out beyond the direct sales context, some refinement to the indicators used for the constructs must be considered carefully.

Third, unexpectedly, the results of the current study contravene the basic theoretical literature of the EDP. Disconfirmation, which has been found to be significantly related to customer satisfaction in several studies (Bearden and Teel 1983; Churchill and Surprenant 1982; Oliver and Bearden 1983; Oliver and DeSarbo 1988), was revealed to be non-significant in the present study (see Research Question 2 in Section 8.3). However, the performance-satisfaction link at each subsystem level was found to be congruent with the EDP theory. The effect of performance on satisfaction variables at the subsystem levels (see Figure 8.1(a), p. 340, Figure 8.1(b), p.341 and Figure 8.1(c), p.342) were found to be the strongest compared to other determinant variables, as postulated in the hypothesised conceptual model (see Figure 4.2, p.134). These findings provide empirical evidence that performance holds a pre-eminent role in the formation of customer satisfaction in the direct sales environment, which lends credence to VanScoyoc (2000), who examined satisfaction formation for consumers engaging in Internet purchasing, and Kassim (2001) who investigated customer satisfaction in the cellular phone market.

One possible speculative interpretation of these results is that upon examination of the descriptive findings of respondents purchasing patterns (see Section 6.4), it was unveiled that the majority of respondents were experienced buyers of the direct sales channel. Hence, it is believed that the specific purchase transaction which was examined by this study might be based on repeat purchase. As such, their evaluations of the product, direct seller and company were based on performance rather expectation (McQuitty et al. 2000). In this regard, respondents presumably did not make their judgements based on disconfirmation (i.e. discrepancy between perception and expectation). As noted by McQuitty et al. (2000) if experienced customers based their satisfaction judgements on expectation, this clearly implies that they never learn from their prior experience. Furthermore, when customer expectations have become passive 359

(not actively processed), such as in the case of continuously consumed products/services, the disconfirmation process will not operate unless performance is obviously outside acceptable norms (Oliver 1989; Oliver 1997). As such, inclusion of the disconfirmation process as a mediator variable seems to be unnecessary.

Alternatively, another possible explanation is that the focal product category investigated in this study might contribute to these results. Several scholars (e.g. Bolfing and Woodruff 1988; Churchill and Suprenant 1982) suggest that when consumers evaluated a low involvement-type product, disconfirmation was the strongest influence on satisfaction. On the contrary, with a high involvement product it was generally found that performance was the most important determinant of customer satisfaction. Presumably, in high situational involvement, consumers might be sensitive to the actual performance experience rather than certain perceived standards retrieved from their memory because they are so concerned about the current consumption, which might entail risks and unfavourable outcomes (Antil 1984; Churchill and Suprenant 1982; Hong and Rucker 1995). Therefore, consumers probably evaluate the product's current performance as if it was their first time using the product. As such, any satisfaction or dissatisfaction which develops would be influenced much more by performance than by disconfirmation. On the other hand, consumers who were experiencing low situational involvement probably do not want to be bogged down by their current consumption; hence, expectation standards developed from prior experience may be utilised as a benchmark to evaluate a focal brand's performance (Hong and Rucker 1995).

Overall, there was little support for the disconfirmation model; it appears that the results of this study are inclined to support the performance-satisfaction paradigm, which was strongly advocated by Cronin and Taylor (1992) and supported by Halstead et al. (1994), Swan and Trawick 1981, Boulding et al. (1993), Yuskel (2000) and Yuskel and Remmington (1998). Notably, this framework is widely used in the service quality studies. Notwithstanding the EDPs limitations, the author of this thesis concurs with Parasuraman et al.s (1994) argument that while the use of performance-onlymeasures is straightforward and convenient, this approach may not provide sufficient diagnostic advantage, particularly to industry practitioners. To recapitulate, it could be argued that the EDP which has been adopted as the underlying theoretical foundation for this study is considered partially supported, as the relationships between 360

performance and disconfirmation at each subsystem level were moderately significant. Potentially, future research should attempt to re-conceptualise the current model by adopting the performance-satisfaction framework as a theoretical basis (Cronin and Taylor 1992).

Fourth, it is worthwhile to highlight that in this study two relationship-marketing constructs (perceived equity and relational commitment) were introduced and examined within the traditional EDP framework as suggested by Grisaffe (2000) and Woodruff (1993). This allowed the author to examine, test, and ultimately generate knowledge on the effects of these constructs on the formation of customer-seller relationship satisfaction. Interestingly, the research findings confirmed that perceived equity has a significant impact on commitment toward the direct seller and in turn, this significantly influenced customer behavioural intentions (see Figure 8.7, p.351). Unexpectedly, there was no evidence found to support the perceived equity - direct seller satisfaction path (see Figure 8.5, p. 349). This finding is a marked deviation from Oliver and Swans (1989) often cited empirical evidence on the equity (fairness) satisfaction link and other studies such as Johnson et al. (2001) and Patterson et al. (1997). This implies that perceived equity has no significant predictor bearing on customer satisfaction with the direct seller in the direct sales consumption setting. The result strongly suggests that the judgement of the direct sellers performance is the dominant determinant of customers satisfaction with them. The precursor path (i.e. direct seller performance-perceived equity) was also found to be non-significant. However, it is surprising to discover that the link between perceived value and perceived equity was supported by this study. It should be emphasised here that this link has been unexplored by previous studies; thus, it is strongly recommended that future research should validate this link in other study settings.

Fifth, the current research findings demonstrate the critical role of the direct seller in the direct sales channel, and therefore confirm that the salesperson acts as relationship manager for the organisation he/she represents (see Research question 3 in Section 8.3). Unique to the direct sales industry, the personal interaction between the customers and the direct seller provides an opportunity for social interaction (Frenzen and Davis 1990; Ingram 1992). This finding clearly implies that the influence of the direct seller on customers overall satisfaction judgements is stronger than the influence of the product 361

itself (see Figure 8.2, p. 344). Interestingly, even though direct sales and the insurance industry share some similarities, there was compelling evidence that in the latter, the core product (policy) was a stronger predictor of customers overall satisfaction compared to the contact person or agent/firm. It is logical to speculate that the insurance industry typically involves intangible products; therefore, the continual availability of the insurance agent to provide after-sales service or personal consultation is relatively unnecessary. Hence, the relational element plays a small role in this post-purchase environment. These intriguing results deserve additional insights; therefore, it would be potentially promising to replicate and validate the current research model in the insurance industry context.

Sixth, one of the significant implications to be drawn from this study was revealed when the proposed model was re-specified by incorporating one additional parameter; a direct path between perceived valuebehavioural intentions. The current investigation implies that perceived value does not have a direct significant effect on behavioural intentions. This means that the effect of perceived value on behavioural intentions is completely mediated by overall satisfaction (see Research question 4 in Section 8.3). Therefore, it presents strong empirical evidence that overall satisfaction is the most influential predictor of behavioural intentions (McDougall and Levesque 2000; Eggert and Ulaga 2002; Fornell et al. 1996; Kassim 2001; Kristensen et al. 1999; Mittal et al. 1999; Patterson et al. 1997). This finding sharply contradicts the empirical evidence provided by Tam (2000) and Schlentrich (2001), which demonstrates that perceived value has a significant positive direct effect on behavioural intentions/ intentional loyalty. It should be emphasised that the perceived value overall satisfaction link was the strongest path in the hypothesised model (see Figure 8.3, p.346), which is consistent to Schlentrichs (2001) finding. Hence, this result supports the theory that customer perceived value is the driving force of customer satisfaction (Gale 1994; Reichheld 1996a). Seventh, it should be noted that the results of this study also illustrate that customers overall satisfaction (standardised coefficient of 0.78) is the strongest driver of behavioural intentions, but not the only one (see Research question 5 in Section 8.3). Relational commitment (standardised coefficient of 0.27) has also been demonstrated to have a significant moderate effect on consumer behavioural consequences (see Figure 8.4, p. 347). Therefore, the results elucidate that satisfaction is not the sole determinant 362

of behavioural intentions and imply that focusing on satisfaction alone may result in overlooking other important predictors of customer future behaviour (Jones and Sasser 1995; Reichheld 1996b; Schlentrich 2001; Tam 2000). Clearly, this finding lends support to the notion that customer satisfaction is a necessary but insufficient condition in the development of customer loyalty (Jones and Sasser 1995; Reichheld 1996b), specifically in the direct sales context. The relational commitment behavioural intentions link has received very little attention by prior research compared to the trust-commitment link; therefore, it deserves additional scrutiny.

Eighth, when the proposed model was modified to include a direct path between perceived value and relational commitment, it was discovered that this link is highly significant. As mentioned before, this link has not been explored by previous empirical research, but its contribution to explaining customer satisfaction and behavioural outcome appears to be decisively important. This new finding illuminates the imperative role of perceived value in the relational marketing paradigm. This phenomenon has been acknowledged by Crosby et al. (2002, p. 10), who point out that, A value-enriched experience is something that happens to the customer through the marketing and management interventions of the seller. The sellers offering is what brings value to the customer. However, this emerging issue has not been empirically validated. This is perhaps due to the elusiveness of the value concept itself; researchers have experienced difficulty in conceptualising this construct (see Day 2002; Day and Crask 2000). The results of this study further underline the fact that not only trust should be examined when trying to capture the relationship commitment; it clearly shows that perceived value is of comparable important construct in understanding customer satisfaction evaluation process (Day 2002; Woodruff 1997; Woodruff and Gardial 1996). In addition, another unexplored link was also unveiled by this study; that is, the perceived value perceived equity path. It is envisaged that future research on buyer-seller relationships could benefit from consistently incorporating this link in the research framework, especially when customer value has been identified as the next source for competitive advantage in this century (Baker et al. 2002; Crosby et al. 2002; Parasuraman and Grewal 2000; Woodruff 1997; Woodall 2003) In conclusion, the findings of this study enable us to clarify the structural relationships among core constructs as postulated in the EDP literature. Importantly, the key findings of this study enhance the understanding of the interrelationships among other constructs 363

which were incorporated in the hypothesised model. It is believed that the new findings drawn by the current study will be of relevance to the development of marketing theory, specifically in the emerging literature of value to the customer (Woodall 2003). Broadly speaking, this research has advanced the understanding of the post-purchase phenomenon, which leads to more meaningful key constructs and measures and consequently translates into its usefulness in the customer satisfaction framework specifically.

9.3

Contributions and Implications for Industry Practitioners

The findings and conclusions derived from this research offer many potential implications for direct sales industry practitioners, which are largely comprised of direct sellers and the management of the direct selling firms. Customer satisfaction knowledge has proliferated remarkably over the past decade, as a consequence of companies' growing commitment to compete in creating and delivering value to customers (Woodruff 1993). Industry practitioners have a growing need for knowledge about customer satisfaction that can be applied to managerial decision making, however it appears that the majority of customer satisfaction research has very little concern for practical applicability or usefulness (Westbrook 1997; Woodruff 1993). This study attempts to shed some insights and understanding on the post-purchase phenomenon to the industry practitioners, in response to calls made by several scholars (see, for example, Piercy 2002; Westbrook 1997; Woodruff 1993), besides its theoretical contribution as described in the preceding section. It was argued that improved understanding of the satisfaction phenomenon should also improve its application (Woodruff 1993). The significance of this empirical research to industry practitioners, particularly to direct sellers and direct sales firms is undeniably important. This section seeks to accentuate the key contributions of this study and discuss their implications to the direct sales practitioners as follows: First, by employing the Importance-Performance Analysis (IPA) approach, this study able to identify the key drivers of customer satisfaction at the attribute and subsystem levels. IPA acts as a guide for plans, which clearly focus on improving those critical attributes which contribute toward customer satisfaction (Allen and Rao 2000). Furthermore, this analysis could precisely suggest to the direct seller or the direct selling organisation which critical features or attributes need immediate attention. The 364

priority area lies within the area of high importance and low performance, which is the Focus Here quadrant (see Section 6.5.6). This implies that these attributes are important but have been evaluated as performing relatively poorly by the respondents. For instance, with regard to the product aspect (subsystem), effectiveness of product and product guarantee and product performed as claimed should be given priority for improvement in order to increase customer satisfaction with the product. Whilst for the direct seller aspect (subsystem), have customer interest at heart and trustworthy were found to be the critical personal characteristics of the direct seller that need to be improved in order to enhance customer satisfaction with the direct seller. Whilst for the direct selling company aspect (subsystem),reliable and trustworthy, enquiry service responsiveness, handle complaints promptly, and concern about customers were the crucial factors to be improved in order to gain higher customer satisfaction with the organisation.

Therefore, the above findings implicitly provide insights which are useful for industry practitioners in developing plans to enhance customer satisfaction, which in turn could influence favourable behavioural intentions (Zeithaml et al. 1996). In contrast to theoretical models of the satisfaction process, business managers require models of satisfaction content (Westbrook 1997) and they need a measurement mechanism that could delineate key attributes or specific dimensions of products or services that could be improved (Westbrook 1997; Westbrook 2000). Johnson and Gustafsson (2000) argue that most measurement systems can only provide information; they cannot help managers to make decisions. Hence, by using IPA, the author could help practitioners to make a transition from information (data) to strategic decisions. Furthermore, the integration of performance and importance data could produce a strategic map with remarkable justification (Allen and Rao 2000). Therefore it is anticipated that the Satisfaction Gap Analysis/Graph and Quadrant Charts which were employed in this study (see Section 6.5.6) could benefited the industry practitioners. Additionally, the descriptive analysis that is comprised of calculation of percentages and mean values could also be used, as they are easy to understand and interpret by practitioners (Dutka 1994). Second, as an alternative to IPA, industry practitioners could optimise overall satisfaction by maximising performance on attributes that have the largest weight in 365

determining overall satisfaction. For example, this study has clearly identified that the most influential determinant of overall satisfaction is perceived value, followed by direct seller satisfaction and finally product satisfaction. On the other hand, attributelevel performance on each factor has been explicitly described in Section 8.3. The findings derived from research question 2 provide empirical evidence that implies that performance is the most influential determinant of product, direct seller and company satisfaction within the direct sales consumption system. These findings also suggest that the ability of the direct selling company or distributors to fulfil consumer needs or desire will translate into customer satisfaction at the subsystem level and subsequently overall satisfaction with the direct sales system, except for company satisfaction.

The most important implication that can be drawn from these results is that customers will be satisfied as long as the performance lives up to or surpasses their expectations. It is critical for the industry practitioners to develop a realistic expectation, as the disconfirmation paradigm implies that high customer expectation is as harmful as low product/service performance to the satisfaction process (Fu and Perkins 1995). This suggestion is in line with Peter (1987), who urges firms to promise less and deliver more (cf. Spreng and Drge 2001). However, sellers may choose to be aggressive by promising what can be achieved, but should avoid promising unreachable claims to hook customer and then disappointing them. Accordingly, Spreng and Drge (2001) maintain that sellers should convey accurate information to customers rather than trying to generate customer satisfaction through manipulation of expectation. Interestingly, this issue has been included as one of the indicators in product performance (i.e. product performed as claimed), and it was found to be the most important predictor of product satisfaction (see Research question 1 in Section 8.3). Additionally, these results also suggest that the direct sales firms should embark on continuous improvement of their products and services, because this could surprise customers and increase and maintain customer satisfaction. It was noted by McQuitty et al. (2000) that if the customer is not experiencing some degree of surprise, this may in turn influence their propensity to indulge in favourable behaviours (loyalty). They further add that diminishing satisfaction is a good reason for the customer to try products from other sellers, especially when the market is very competitive like the direct sales industry, which consists of almost 230 companies in Malaysia in 2003 (see Table 2.2, p. 48) 366

Moreover, these findings accentuate important implications, particularly to the direct selling company, for coordinating and managing their resources and effort towards improving their corporate image and customer service with an aim of enhancing customer satisfaction judgements. Apparently, in the eyes of todays sophisticated consumers, a healthy corporate image has become an important criterion in their decision-making, and for companies that want to build a long-term relationship with their customers, this critical issue cannot be ignored (Andreassen and Lindestad 1998; Barich and Kotler 1991; Nguyen and LeBlanc 1998). Hence, by improving all three subsystems, this could produce synergy toward global satisfaction with the direct sales channel, as the existence of the crossover effects phenomenon among these subsystems was established in Hypotheses 1, 2 and 3 (see Section 7.6.2.1, p. 316). Third, the findings of this study make it possible to identify that what customers value in their consumption experience within the direct sales consumption system, as compared to conventional in-store retailing. This appears to be a critical competitive advantage for the direct sales channel (see Table 7.4(b), p. 300). Although perceived value has been suggested as an important determinant of customer satisfaction and behavioural intentions, little empirical evidence has been reported by previous satisfaction frameworks; however, recently it seems that conceptual and theoretical frameworks have been published. It should be noted that the conceptualisation of perceived value, which was fine tuned to align with the direct sales context, provides deeper insight into the value enhancing strategy for sustaining and expanding market growth and acts as a competitive advantage in this fierce business environment. The results of regression analysis indicate that the most important predictor of perceived value is time value, which implies that the respondent highly values their time spent in purchasing the product from the direct seller. This is particularly true because it has been noted that among upper and middle class consumers, time impoverishment will be a critical problem in the 21st century (Bartlett 1994). Therefore, the direct selling industry should recognise this time short society by offering excellent products and services, as by so doing, they are providing time value. The second key indicator is value for money, which means that the respondents felt that the benefits they received from the product were worth the money spent. In addition, enjoyment value was found to be the third important determinant of perceived value. Presumably, this is in line with the emerging practise of mixing business with 367

pleasure, which was highlighted in Section 2.4.2.4. However, contrary to expectation, convenience value, which was frequently found to be the advantage for purchasing from direct sellers (e.g. Raymond and Tanner 1994), was not among the top three important indicators of perceived value (see Table 7.4 (b), p. 300). Clearly, these results indicate that direct selling companies and direct sellers should enhance the perceived value of purchasing via direct sales channels by promising time, money and enjoyment value.

Fourth, by reflecting upon the descriptive results of the open-ended question (see Section 6.6), clearly two key theme emerged namely, price and product quality. When asked for reasons why they did not repurchase from the direct selling channel, the three most popular answers were: product was expensive, product was ineffective and product did not performed as claimed. The second question posed concerned factors that influenced repeat purchase; again, the three most popular answers were effectiveness of product, reasonable price and availability of product. The last question requested respondents to propose areas of improvement in the present direct selling system; interestingly, the top three responses were control price and quality, good promotion, reduce price. In brief, these findings imply that direct selling companies should carefully formulate their pricing strategy (Reese 1999) so that it is commensurate with their product quality, because as mentioned earlier, customers are willing to pay more for acceptable quality (Bartlett 1994).

Fifth, the current research contributes to the direct selling industry by helping to identify the determinants of customer satisfaction at the attribute, subsystem and overall satisfaction levels, and their impacts on behavioural intentions. Prior research has provided evidence that satisfied customers are crucial for customer retention and subsequent profitability. Most importantly, the findings of this study precisely suggest that investment in perceived value and performance at each subsystem level is likely to be a rewarding activity for the direct sales industry, because performance was found to be the most important predictor of customer satisfaction at each subsystem level, whilst perceived value significantly influenced overall satisfaction. In turn, customers overall satisfaction with the direct sales channel was found to strongly influenced their subsequent behavioural outcomes. It is noteworthy that in this study, nine drivers of favourable behavioural intentions and three indicators of 368

unfavourable intentions were revealed to be statistically significant (see Table 7.5(b), p. 305). The most important driver for the favourable intentions factor is say favourable things about product to others, and for the unfavourable behavioural intentions factor is complain to direct seller. These results indicate that when customers are satisfied they will recommend the product to others, and on the other hand, when they encounter problems they will complain first to the direct seller. In fact, complaining to the direct seller is considered an advantageous action to the industry generally, rather than disseminating negative views to their friends or switching to another product. The direct sellers who typically meet their customers personally are in a good position to handle queries and complaints, and this information might be valuable for the firms. Clearly, these findings suggest that direct selling firms should train their sales force in how to handle and manage complaints and encourage them to attend product and service seminars, as this study has also revealed that, product performed as claimed is the prominent driver of product quality.

In summary, guided by the current study framework, it is strongly suggested that industry practitioners should regularly evaluate their customers satisfaction. The current model also includes performance measures, which can help the firm to identify which features or attributes need immediate attention in improving customer satisfaction. Prior research has provided evidence that satisfaction has been linked to the development of customer loyalty (Cronin and Taylor 1992; Fornell 1992), which ultimately improves the companys market share and profitability (Anderson et al. 1994; LaBarbera and Marzursky 1983; Oh and Park 1997). Therefore, this indicates that understanding the causal relationship is essential for explaining how to satisfy the customer and what factors underlie customer repurchase or other pertinent behaviours. Perhaps rather than looking at all aspects of the direct sales consumption experience, managers can concentrate on those that are of direct interest, which might need immediate action or are directly controllable. As a result, managers are able to obtain "true" consumer responses that are relevant to managerial decision-making.

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9.4

Limitations of the Research

The research findings should be interpreted with some caution in light of several limitations and they are described as follows:

Firstly, this study was conducted in Malaysia, thus the research findings was based on Malaysians people perception, whose cultural background, socio-economic and lifestyle will have influenced their consumption patterns and behaviour. These differences could hinder the generalisability of these research findings to other countries and cultures (i.e. Western cultures). Clearly, testing for external validity would require replication of the present study to other countries. Additionally, in order to maintain homogeneity of the sample, this study solicited respondents who reside or work within three urbanised districts located within Kuala Lumpur city in order to fulfil the sampling quota. Expanding the population frame to include both urbanised and rural areas in Malaysia could have produced a richer and a more representative sample of the Malaysian population generally. Recently, Mittal et al. (2004) provide empirical evidence that customer behaviours and satisfaction evaluation varies with geographic conditions.

Secondly, the current investigation was restricted to one context (direct sales industry), therefore the generalisation of findings are limited by the characteristics of the products, services and firm within this specific industry. Thus, generalisations of the findings beyond the direct sales industry must be cautiously inferred.

Thirdly, this study explicitly examined transaction-specific rather than cumulative satisfaction judgements (i.e. several encounters) with the direct sales channel. Possibly the residual satisfaction might have carry over effects from previous experiences, which could influence respondents satisfaction judgements. Given this reservation, there is clearly a need for further research to cross validate the generalisability of the research findings beyond this research condition. Fourthly, the present study focused on customers behavioural intentions only and these intentions are an incomplete proxy for actual behaviour (Bloemer and OdekerkenSchrder 2002; Keaveney 1995; Mittal and Kamakura 2001). They should be supplemented by behavioural measures in order to develop a composite index of 370

behavioural loyalty (Dick and Basu 1994). Furthermore, a study of the actual behaviour of consumers would offer implications that are more realistic to marketing practitioners.

Fifthly, the research design of the present study was cross-sectional, whereby all the constructs incorporated in the hypothesised model were assessed at a single point in time, hence no definite conclusions can be drawn concerning the causality of relationships among contructs (De Wulf 1999). Even though a longitudinal research design is relatively costly and time consuming, it could provide stronger inferences for causality and improve understanding of the consumption process dynamic and cumulative effects among hypothesised links (Parasuraman 1991). Moreover, the longitudinal study could reflect and substantiate the changes that might occur over time on the satisfaction judgement and subsequent behavioural outcomes. Therefore, it is recommended that future research to adopt the longitudinal research design.

Finally, as this study used only a single questionnaire to measure different constructs and subsequently utilised to examine the hypothesised relationships as posited in the research model, it is suspected that the strength of relationships between these constructs may be inflated by common methods variance (bias) (De Wulf 1999; Kline 1998; Sujan et al. 1994). For example, the magnitude of the effect of overall satisfaction on behavioural intentions might be influenced by such bias. This bias may well have influenced the variance of both within and between constructs, but it is highly unlikely that it accounted for all the effects. The differential strength of the relationships among constructs examined in this study suggests that any bias would be a partial, but not a determining factor (Dunning et al. 2004). Further research using multiple methods is needed to strengthen the research findings of the present study.

Despite these limitations, their important contribution to both marketing theory and practices must be acknowledged.

9.5

Suggestions for Future Research Directions

This section proposes several potentially fruitful and interesting research directions to be explored within the scope of study examined in this research. Several implications 371

for future investigations are built upon the current findings and some are identified in response to the limitations of the present study. Firstly, issues pertaining to measuring actual behaviour rather than intentions have long been debated (Mittal and Kamakura 2001). A study of the actual behaviour of consumers would offer implications that are more realistic to marketing practitioners, but this notion had to be put to rest due to time constraints, although strongly recommended as a future study. Undeniably, longitudinal studies could provide stronger inferences for causality and improve understanding of the consumption process dynamics, and cumulative effects among hypothesised links are not obvious in snapshot research design (Parasuraman 1991). In this regard, the researcher could reassess the actual behaviour based on the intentional behaviour measure. If the followup study is to be implemented, the same respondents should be studied via personal interview, as this method would allow the researcher to probe for deeper insights in understanding their motivation to the loyalty behaviours investigated in the study. Therefore, the current model could be extended by including the behavioural loyalty construct as a consequence of behavioural intentions.

Secondly, the present research examined direct sales as a single industry, even though it is typically characterised into single level or multi-level compensation structures (see Section 2.4.2.5). Therefore, it would be a potentially worthwhile for future research to validate the generalisability of this research model with regard to these two types of company structure.

Thirdly, the present investigation was based on aggregation of multiple firms, thus it will be interesting for future research to replicate this study to validate the generalisability of the conceptual model based on a single firm approach. It would be a promising research avenue because it is believed that all the measures used in this study are generally applicable to any direct selling firm. It is envisioned that by embarking on research in the single organisational context, areas of satisfaction and dissatisfaction can be more explicitly identified and product/service strategies can be developed and precisely utilised to stimulate the greatest overall return from the performance improvements (Chu 2002).

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Fourthly, it is worth noting that this study was the first to hypothesise the relationship between perceived value and relational commitment and provide empirical evidence that it was a highly significant link; however, this link was unexplored by previous research conceptually or empirically. Therefore, it will be a fascinating research direction to investigate the significance of this link in other marketing contexts.

Fifthly, in the prediction of the effect of perceived equity on direct seller satisfaction; perceived equity was found not to be significantly related to direct seller satisfaction. This unexpected result could be explained by the Satisfaction First Model (see Section 3.6.3), which posits that equity bridges the gap between satisfaction and loyalty which is assumed to occur as a result of the consumers cumulative satisfaction experience. Perhaps the current conceptual model could be re-specify by positing customer satisfaction as a predictor to perceived equity (Olsen and Johnson 2003). Sixthly, the current investigation suggests that Purchase Decision Involvement (PDI) was not a significant predictor of product satisfaction; however, it provides evidence that it has a significant effect on perceived value. This implies that no matter how involved the customers were with the purchase decision, they displayed similar judgements on the product satisfaction. Prior studies have suggested that involvement may affect the nature of the process leading to satisfaction (e.g. Bolfing and Woodruff 1988, Churchill and Surprenant 1982). It is reasonable to propose PDI to be a moderating variable in the customer satisfaction framework. Indeed, Bolfing and Woodruff (1988) suggest that involvement could be a mediator in CS/D determinations. Therefore, the present conceptual model should be re-assessed and validated by examining the moderating role of purchase decision involvement. Finally, advanced research should be embarked upon to replicate and validate the model in order to determine the robustness of the current findings. Since the generalisability of the model is inherently limited to the direct sales environment, the model and hypotheses should therefore be extended beyond the present context (e.g. to the insurance industry and the conventional retailing system). By doing so, these replication studies could extend the generalisability of the findings derived from the current study. In addition, comparative cross-national studies are essential in order to examine and validate the generalisability of the model globally. This research direction appears to be potentially fruitful because direct selling is considered a universal phenomenon; most 373

top companies in the world, such as Tupperware, Avon, Amway, Nu Skin and Mary Kay, have offices worldwide. Moreover, generally this industry has one global association, that is World Federation of Direct Selling Associations (WFDSA) and most of the Direct Selling Associations at the country level are members of the WFDSA.

9.6

Concluding Remarks

The analysis of customer satisfaction has become essential to marketing and postpurchase research over the couple of decades. As a result of substantial effort devoted by prior research to the understanding of the satisfaction concept and process, important findings were delineated, particularly in the satisfaction process (i.e. antecedents and consequences). However, it was recognised by several scholars that satisfaction research has paid very little attention toward providing insights pertaining to structural aspects, such as content and dimension (Oliver and Desarbo 1988; Singh 1991). Furthermore, Duhaime (1988), Johnson and Gustafsson (2000), Mittal et al. (1999) convincingly argue that in order to gain better insights and understanding of customer satisfaction and postpurchase consumption behaviour, it should be conceptualised by a system approach. In response to these assertions, this study sought to develop and empirically test a customer satisfaction model which was based on structure, process (i.e. Expectancy Disconfirmation Paradigm) and adopted the consumption system approach.

Additionally, the hypothesised conceptual model expands the traditional EDP framework by integrating new constructs such as perceived value, perceived equity, relational commitment and purchase decision involvement. As such, the proposed model clearly brings relational marketing elements into the EDP framework. This is in response to Ingrams (1992) call, as he recognised that the direct sales channel heavily relied on buyer-seller interactions (high touch) and presently no empirical research has addressed this potentially promising research area from the customers perspective. The current research endeavour clearly demonstrates that in the perspective of the customer satisfaction process, performance at each subsystem level was identified to be the most influential determinant of customer satisfaction with the product, direct seller and company. Customer overall satisfaction construct was nomologically related to behavioural intentions.

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It is essential to highlight that the current investigation has unearthed two new links: perceived value perceived equity and perceived value relational commitment. Perceived value has been established to be significantly related to perceived equity. In turn, perceived value emerged to be a comparably important predictor of relational commitment. Importantly, perceived value is the most important determinant of customers overall satisfaction with the direct sales channel; consequently, it has the strongest effect on behavioural intentions via overall satisfaction. Clearly, this study demonstrates that overall satisfaction is the most influential predictor of behavioural intentions, but not the only one. Relational commitment also has a significant impact on behavioural intentions. Surprisingly, the results of the model analysis were made even more interesting by the non-significant effect of company satisfaction on overall satisfaction. It intrigued the author to discover that customers evaluate satisfaction with the direct seller as having greater impact on influencing their overall satisfaction than the product itself.

In reflecting upon the results obtained from the assessment of the measures employed in the study; the earlier stage strictly adhered to Churchills (1979) procedure, subsequently they were validated and confirmed by CFA. It could be briefly summarised that they have been scrutinised rigorously and as a result, these measures have adequately achieved measurement quality in terms of unidimensionality, reliability, convergent validity and discriminant validity. More importantly, the proposed model and its associated measures offer evidence to substantiate the importance of perceived value on customers overall consumption satisfaction with the direct sales channel, and provide empirical evidence of its significant effect on customer future behavioural outcomes.

Finally, the main goal of the study, to generate a tenable customer satisfaction model by adopting the consumption system approach, was successfully achieved after respecification (i.e. perceived value relational commitment) and deletion of nonsignificant paths. As explained earlier in term of external validity (i.e. generalisability) of the conceptual model (see Section 8.4.1), at this juncture it is reasonable to accept that its generalisability in the direct sales consumption context, particularly among the Malaysian buying population, is justified until further replication and validation is reaffirmed beyond this specific population and context by future research.

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This study has brought to light knowledge in improving the understanding of customer satisfaction and its consequences. For example, pertinent concepts such as perceived equity, perceived value and relational commitment should be integrated into the customer satisfaction framework. This study has provided empirical evidence of the critical roles of these constructs in determining customer satisfaction and its behavioural outcomes. Even though perceived value has been regarded as an emerging source of competitive advantage (Woodruff 1997), however this study revealed that perceived value does not have a direct significant impact on behavioural intentions; hence, overall satisfaction is a powerful mediator variable in linking this relationship. The finding of this study supports the notion that satisfaction may not be enough to create long-term customer loyalty (Jones and Sasser 1995), as it unveils relational commitment as having a significant impact on customers behavioural intentions. However the author disagrees with Bhotes (1996, p.31) assertion that, It is now becoming apparent that it is no longer customer satisfaction but customer loyalty that is the dominant key to business success. Further, Oliver (1999) adds his voice by recommending that a firms emphasis on satisfaction should be shifted to focus on customer loyalty.

The rationale for the disagreement is that the current study and considerable number of empirical evidence suggest that behavioural intentions/loyalty is a consequence of customer satisfaction (see, for example, Anderson and Mittal 2000; Kassim 2001; McDougall and Levesque 2000; Sderlund 2002; VanScoyoc 2000; Yu and Dean 2001; Zammit 2000). To disregard satisfaction measurement would simply means assuming that loyalty just happens without its root. If loyalty is viewed as an outcome, then investigating its antecedents is necessary to influence the desired outcome (Day 2002). Indeed, understanding what drives satisfaction and loyalty, how they are linked and how they contribute to the companys overall bottom line performance is fundamental to success (Cronin et al. 2000). Direct sales practitioners must make significant investments to acquire and maintain loyal customers. As evidenced by this study, satisfied customers are more likely to be loyal customers. Therefore, by understanding what key factors contribute to their satisfaction, industry practitioners can focus their efforts and investments on increasing satisfaction which in turn, leads to desirable behavioural intentions/loyalty.

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The author supports the line of thought of a systematic perspective in the endeavour to better understanding of customer satisfaction and its consequences, which is strongly advocated by Anderson and Mittal (2000) and Johnson and Gustafsson (2000). Moreover, the real world is not made up of a singular relationship effects but rather comprises of intertwining of several relationships of different variables and concepts. To emphasise the significance of this perspective, Johnson and Gustafsson (2000, p.xiii) argue that, many companies have moved sequentially from focusing on quality to focusing on customer satisfaction, and then loyalty, and then on relationship management as the panacea of the day. These are all important issues, but it is an error to try to address them independently, without regard to their place in a system. They actually form a chain of causes and effects that build on one another and cannot be treated or managed successfully on their own.

In closing, the author would like to reconsider the analogy presented by Neal (1999, p.23): If you are measuring and reporting satisfaction, but not value, you may be in the right woods but barking up the wrong tree.

Rather, should it be? If you are measuring and reporting value but not, quality (performance), satisfaction and intention/ loyalty you may be in the right woods but barking up one tree may spell disaster.

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