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0019-8501/98/$19.00 PII S0019-8501(97)00040-0 Industrial Marketing Management 27, 83–93 (1998) © 1998 Elsevier Science Inc. All rights reserved. 655 Avenue of the Americas, New York, NY 10010 Service Aspects of Industrial Products Lead to Future Product Purchase Intentions Kirk Smith Results from two separate mail surveys demonstrate the ef- fects of services ancillary to product offerings to generate fu- ture product purchase intentions in industrial markets. Specifi- cally, satisfaction with telephone service was found to be the most important predictor of future product purchase inten- tions—larger than either delivery service satisfaction or prod- uct satisfaction, although all three were significant predictors. Managerial implications are highlighted. © 1998 Elsevier Science Inc. INTRODUCTION Customers purchase more than just a product; they purchase a bundle of attributes, some tangible and others not [e.g., 1, 2]. Thus, an industrial supplier could attempt to differentiate his or her products by adding or improv- ing services ancillary to the physical items supplied. For example, a company might add telephone order/help lines or delivery services in an attempt to win customer loyalty. The cost of adding people and a a bank of telephones or of obtaining trucks and reliable drivers can be substan- tial in industrial markets and, since previous research has not demonstrated the ability of these ancillary services to generate future product sales, these product extensions are made on faith. Managers believe the addition of ser- vices will positively influence future product purchase behavior and hence pay “for themselves.” This research seeks to fill that gap: the power of ancillary services to generate future product purchase intentions is empiri- cally tested in two different industrial markets. Published research regarding relatively pure cusumer services and products was adapted to these ancillary ser- Address correspondence to Kirk Smith, Assistant Professor of Marketing, Department of Marketing and Finance, Boise State University, 1910 University Drive, Boise, ID 83725.

Service Aspects of Industrial Products Lead to Future Product Purchase Intentions

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0019-8501/98/$19.00PII S0019-8501(97)00040-0

Industrial Marketing Management

27

, 83–93 (1998)© 1998 Elsevier Science Inc. All rights reserved.655 Avenue of the Americas, New York, NY 10010

Service Aspects of Industrial Products Lead

to Future Product Purchase Intentions

Kirk Smith

Results from two separate mail surveys demonstrate the ef-fects of services ancillary to product offerings to generate fu-ture product purchase intentions in industrial markets. Specifi-cally, satisfaction with telephone service was found to be themost important predictor of future product purchase inten-tions—larger than either delivery service satisfaction or prod-uct satisfaction, although all three were significant predictors.Managerial implications are highlighted. © 1998 ElsevierScience Inc.

INTRODUCTION

Customers purchase more than just a product; theypurchase a bundle of attributes, some tangible and others

not [e.g., 1, 2]. Thus, an industrial supplier could attemptto differentiate his or her products by adding or improv-ing services ancillary to the physical items supplied. Forexample, a company might add telephone order/help linesor delivery services in an attempt to win customer loyalty.

The cost of adding people and a a bank of telephonesor of obtaining trucks and reliable drivers can be substan-tial in industrial markets and, since previous research hasnot demonstrated the ability of these ancillary services togenerate future product sales, these product extensionsare made on faith. Managers believe the addition of ser-vices will positively influence future product purchasebehavior and hence pay “for themselves.” This researchseeks to fill that gap: the power of ancillary services togenerate future product purchase intentions is empiri-cally tested in two different industrial markets.

Published research regarding relatively pure cusumerservices and products was adapted to these ancillary ser-

Address correspondence to Kirk Smith, Assistant Professor of Marketing,Department of Marketing and Finance, Boise State University, 1910 UniversityDrive, Boise, ID 83725.

84

vice situations to develop a model and hypotheses. Thehypotheses were then tested using multiple regression ofdata collected in two separate mail questionnaires. Thoseresults are presented along with managerial implicationsand directions for future research.

BACKGROUND AND MODEL DEVELOPMENT

Customer Satisfaction InfluencesBehavioral Intentions

Customer satisfaction has been an important constructin models of organizational buyer behavior since Sheth’sseminal work [3]. It is a post-purchase attitude measurethat “is generally assumed to be a significant determinantof repeat sales, positive word-of-mouth, and consumerloyalty” [4, p. 21]. Since the study reported herein con-cerned the ability of ancillary services to generate futurepurchase considerations, “satisfaction” was a central ele-ment in this research. In particular, satisfaction with an-cillary services is hypothesized to influence future prod-uct purchase intentions.

Previous investigations of customer satisfaction arelimited in that most have been executed by studying pop-ulations at either end of the consumer product-servicecontinuum. Satisfaction with relatively pure consumerproducts, like frozen orange juice [5] or toothpaste [6] hasbeen identified as a strong predictor of future buyer be-havior

for those products

. Likewise, satisfaction with rel-atively pure consumer services such as travel [7], appli-ance repair [8], household moving [9], or health care [10,

11] has been identified as a strong predictor of future be-havior

for those services

. Thus, we have evidence thatprevious satisfaction with a purchase, be it a product orservice, will positively influence future purchase behaviorfor those consumer goods.

The middle of the continuum, however, has been a ne-glected area even in consumer markets. A rather exten-sive search identified only two studies of populations inthis area. Richard and Allaway [12] reported a positiverelationship between the quality of Domino’s deliveryservice pizza purchases [12]. Likewise, Teas [13] re-ported a positive relationship between in-store servicequality at a discount store (e.g., K-Mart) and expectedpatronage of the store [13]. Given the strong consumerorientation of these studies, there generalizability to in-dustrial markets is not immediately clear.

Whereas the use of “pure” consumer products or ser-vices certainly has some research advantages, it ignores apotentially very large segment: organizational purchases.Here, as in consumer markets, research has demonstratedthe ability of past

product

satisfaction to generate future

product

purchase behavior [e.g., 14, 15], and the abilityof past

service

satisfaction to generate future

service

pur-chase behavior [e.g., 16, 17]. However, organizationalpurchasing of

products

due to previous satisfaction withancillary

services

has been completely neglected. Appar-ently, the only investigation even close is Zeithaml etal.’s [17, p. 36] report of a positive relationship betweencustomer perceptions of quality on their five service di-mensions [“SERVQUAL,” see 18, 8 for details] and be-havioral responses such as intention to repeat purchase ofthe service for “business customers of a computer manu-facturer.” Although their sample was from the middle ofthe product-service continuum, that study differs fromthe research reported herein in that their dependent vari-ables were related to repeat purchases of the service itselfrather than of the product. Thus, this research addresses a

KIRK SMITH is Assistant Professor of Marketing at Boise State

University.

Ancillary services such as delivery or telephone “help lines” potentially could be

bundled to any organizational product.

85

previously neglected population—organizational purchasesin the middle of the product-service continuum—and a pre-viously neglected relationship—future product purchasebehavior due to satisfaction with ancillary services.

Consistent with the earlier research highlighted above,previous satisfactions with both the product and ancillaryservices are hypothesized to positively influence futureproduct purchase behavior in industrial markets (Figure1). To demonstrate the relationships, satisfaction with an-cillary services delivered via the common modes of thetelephone and seller-specific product delivery service areexplicitly hypothesized to influence future product pur-chase behavior. These two ancillary services should befamiliar to most readers and common in many industries,but an investigation of appropriate product-market seg-ments for their addition seems appropriate.

Product-Market Segment Considerations

Ancillary services such as delivery or telephone help“lines” could potentially be bundled to essentially any or-ganizational product. This wide latitude presents a two-foldchallenge for the manager: (1) identification of product-market segments that are good candidates for differentia-tion via ancillary services and (2) selection of which an-cillary services should be offered to each product-market

segment. To assist, we first examine the strategic impli-cations of ancillary service augmentation and then exam-ine the organizational buyer behaviors expected relative tothose proactive supplier actions.

Zeithaml et al. [17] divide organizational seller strate-gies into two basic perspectives: offensive, the acquisi-tion of new buyers; and defensive, the retention of exist-ing buyers. Although the addition of ancillary servicessuch as customer help lines could be used in promotionsto obtain new customers, it is believed that these are pri-marily defensive strategies. The logic is that customerscan, for example, telephone free of charge for technicalassistance after a purchase; “good” help on the telephonewill lead to retention of an account and will be mani-fested as future positive buyer behavior. This describes along-term strategy.

The exploration of antecedents and consequences oflong-term buyer-seller relationships has been the subjectof several investigations [e.g., 19]. Recently, dependenceand transaction-specific investments have been identifiedas key antecedents in the formation of long-term buyer-seller relationships [14]. Hence, the opportunities for ef-fective use of ancillary services should be in marketswhere either (or both) buyer dependence and transaction-specific investments are high. Thus, we explore each in abit more detail.

FIGURE 1. Hypothesized relationships.

86

Williamson, in his development of transaction costanalysis, outlines the importance of trading partners’ in-vestments in transaction-specific assets [20–22]. He statesthat large investments made by a purchaser to use a par-ticular vendor’s goods create high switching costs for thebuyer and hence create an incentive for the buyer tomaintain a long-term relationship with that vendor. Thebuyer becomes dependent on the vendor according to themagnitude of the buyer’s investment in the relationship.

Heide and John [23] expand on Williamson’s proposi-tions with the identification of three additional potentialantecedents of dependence on a supplier: (1) buyer out-comes due to the purchase are very important to thebuyer’s firm and/or the purchase is of high value; (2)buyer outcomes from the vendor relationship exceedthose that could be obtained from the best alternativesource; and (3) the buyer has few alternative sources (oli-gopoly). Thus, research has identified at least four char-acteristics of product-market segments prime for the ini-tiation of ancillary services.

From the buyer’s perspective, a situation of high de-pendence on one vendor creates an asymmetrical distri-bution of power in the channel and is likely to result inseller opportunistic behavior [24]. Anderson and Weitz[25] note that channel relationships characterized byasymmetrical power are typically less stable due to thatfact. Instability is, however, the opposite of the situationdesired by the vendor with a long-term customer-reten-tion orientation. To combat it, one possible way to bringthe relationship into balance and facilitate a long-term re-lationship is for the seller to invest in transaction-specificassets and hence demonstrate a commitment to the buyer-seller relationship [26]. One such investment could be inancillary services. It would show seller commitment tothe relationship and should make the buyer feel less vul-nerable to seller opportunistic behavior. Thus, suppliersoperating in oligopolistic markets with products impor-tant to their customer’s survival should examine the via-bility of differentiation via the addition of ancillary ser-vices. Further, ancillary services should be particularly

attractive when the buyer has already made a substantialeconomic investment to use the seller’s product.

This leads us to our final theoretical examination:which ancillary services should be offered in which situ-ations? Previous research has not addressed this issue atall, since the point is moot for investigations of pure ser-vices. The decision as to which service should be offeredhas already been made in pure service situations so theseller is primarily interested only in which dimensions ofservice quality (e.g., responsiveness or reliability) are im-portant to customers and the measurement thereof. Thisis the logical direction services research has taken in thepast. However, ancillary services present a new problem:which services, out of the plethora of possibilities, shouldbe bundled with the product?

First, if the intent is to cement a long-term relation-ship, then the seller should offer those services of maxi-mum absolute value to the buyer since they should leadto the most rapid equalization of power in the channel.Value, however, implies both a cost and a benefit compo-nent and even in oligopolistic markets organizationalbuyers do have some choice. For example, a buyer mayselect a vendor with bundled delivery service or chooseto go with a different vendor and purchase FOB factory.The rational selection would be made by a comparison ofthe benefit/cost ratios for all salient alternatives. If thebenefit/cost ratio for a bundled service exceeds those ofthe alternatives (e.g., “separate freight carrier”), then itshould be chosen. Thus, the prospective seller should ex-amine the cost/benefit ratio from the buyer’s side whenselecting which ancillary services to offer.

To conclude then, previous research suggests that sat-isfaction with ancillary services should generate productpurchase behavior in organizational markets. This effectshould be particularly profound in markets with highbuyer dependence on the vendors and where the ancillaryservices (1) have relatively large value to the buyers and(2) are perceived by buyers to be less costly to them bun-dled than unbundled. The next section describes themethod used to test the hypothesized relationships.

Results from two separate retrospective

mail surveys are reported.

87

METHOD

To demonstrate some generalizeability, the results fromtwo separate retrospective mail surveys are reported. Thefirst was exploratory and limited in scope. It was sent to arandom sample of the computer networking specialistsfound in many companies today. The survey only solic-ited their opinions regarding future networking hardwarepurchases and their satisfaction with a key ancillary ser-vice in that industry: manufacturer’s call-in “help lines.”Thus, these data only demonstrate the effects of satisfac-tion with telephone “help lines.”

The second mail survey was sent to a random sampledrawn from an entirely different population: the customerlist of a relatively large Western U.S. veterinary suppliesdistributor. It solicited customer opinions regarding pastproduct performance and two key ancillary services inthat industry: telephone order/help lines and delivery ser-vice. Thus, the data in the second sample are much morecomprehensive.

Both samples, however, should be receptive to ancil-lary services even though rather profound situational dif-ferences exist. Respondents in the first sample were indi-viduals personally responsible for keeping computernetworks operating at their facilities. Since many compa-nies are very dependent on computer networks today, thevalue of a “help line” should be quite high since the op-portunity cost of downtime to the customer is typicallysubstantial. Likewise, “the buyer of supplies for yourclinic” queried in the second sample should attach sub-stantial value to ancillary services that save time (orderentry) or ensure rapid availability of emergency supplies(delivery) due to the perishability of demand for servicebusinesses like veterinarians.

Details regarding the mechanics of the two surveysfollow.

Sample 1

The first sample consisted of 1,162 names randomlyselected from the mailing list of a personal computingmagazine. The population was limited to those subscrib-ers indicating corporate responsibility for networkingcomputers. Respondents came from a very broad range ofcompany situations, although the responses were skewedtoward larger facilities. The mean number of personalcomputers at respondent facilities was 461 (

s

5

2,063).The questionnaire asked respondents to recall their

most recent experience with any computer hardwaremanufacturer’s telephone “help line.” On average, it had

been less than three weeks since their last call for help(

m

5

20 days,

s

5

35 days). Given the dynamic natureof the computer industry, the recency of calls does notseem surprising in spite of the fact that as a group, re-spondents were pretty experienced with computer hard-ware (mean experience: 6.2 years;

s

5

2.9 years). Thecombination of experience, yet frequent use of the helplines leads us to surmise that these purchases of computerhardware for this group were probably of the “modifiedrebuy” buyclass [27].

Seventy-four usable questionnaires were returned,which made the response rate 6.4%. Due to the propri-etary nature of the mailing data base, it was not possibleto send a reminder or a second questionnaire. Thus, wecould not eliminate the question of nonresponse bias.These sample limitations and the desire to test a broaderrange of effects were the major reasons for the secondsample outlined below.

Sample 2

“The buyer of supplies at your clinic” was the respon-dent to the second retrospective mail survey. In actuality,this person was the veterinarian in smaller clinics and theoffice manager in larger ones. Their annual purchasesfrom the survey sponsor ranged from only several hun-dred dollars to over $100,000. Similar to the respondentsin sample 1, these people had quite a bit of experience intheir industry (mean veterinary supplies purchasing ex-perience: 12.4 years,

s

5

9.9 years). Respondents indi-cated frequent purchases in that they called the order linean average of 9.2 times per month (

s

5

9.5). Althoughthey don’t always order the same products, many of themcall often, order smaller quantities, and need rapid ser-vice. Thus, these transactions were also probably “modi-fied rebuys.”

Like computer hardware manufacturers, suppliers tothe veterinary market are also attempting to differentiatethemselves via ancillary services. However, their scopeis slightly different. In addition to a focus on the tele-phone, some distributors in this market have also beenadding company trucks and drivers to service their cus-tomers. Thus, use of the veterinarian market gave us theopportunity to test the effects of two ancillary servicesrather than just one.

Sixty veterinary clinic customers were randomly se-lected from each of a sponsor’s 31 sales regions across 18western U.S. States. Thus, our total initial mailing was to1,860 veterinary clinics. Each clinic received a cover let-

88

ter, questionnaire, and a stamped, self-addressed returnenvelope. As an incentive, each questionnaire offered a$10 credit toward the clinic’s next purchases after receiptof their response. This method apparently worked, as1,059 (57%) were returned within 4 weeks. However, thelack of anonymity inherent in the method could have bi-ased the results, so the 801 nonrespondents were mailedan anonymous second questionnaire and cover letter 1month later. No incentive for response was offered, andanonymity was guaranteed for the second mailing. Then310 more were received and used to check for nonre-sponse bias. Discriminant analysis across the key re-sponse measures and demographic items identified nooverall bias. Likewise, no significant item by item devia-tions were found between the first and second responses.Thus, the data were merged for analysis, which made ouroverall response rate 1,369 questionnaires or 74%.

Out of the 1,369 returned questionnaires, only 580 indi-cated they had recently received delivery service from thesurvey sponsor. This was not surprising, given that thisdistributor had limited its delivery service area to abouthalf of the sales territory. Since our objective was to testboth delivery and telephone service effects, these 580 re-sponses comprised the sample used in ensuing analyses.

Questionnaire Design

The single item independent variable measures ofproduct satisfaction, telephone service quality, and deliv-ery service quality are contained in the Appendix. Allwere measured on 7-point Likert scales anchored by“strongly disagree” or “strongly agree.” Two measureswere taken of the dependent variable, future product pur-chase intentions. These measures were based on the twokey downstream elements of Spreng et al.’s [28] servicesmodel: future purchase consideration and positive word-of-mouth activity. Those measures are also presented inthe Appendix.

Further, it should be noted that although satisfactionwith telephone service was measured in both surveys, the

underlying use of the telephone and of the products pur-chased was different in each sample. Eighty-seven percentof respondents stated their primary reason for last tele-phoning the veterinary supplier was “to place an order,”whereas no calls to the computer hardware manufacturerswere to “place an order”; all were for post-purchase prod-uct assistance. Further, veterinary clinics purchase veteri-nary supplies to use in the performance of their service; thesupplies are consumed and become part of what is subse-quently sold. Computer networking hardware, however, istypically not resold; it is used in support of company oper-ations. These fundamental differences should add general-izeability to the findings regarding satisfaction with tele-phone service’s ability to drive future product purchaseintentions.

RESULTS

Dependent Measures

Table 1 contains the correlations between variables forboth samples. In the computer networking sample, thecorrelation between the two dependent measures of fu-ture purchase consideration and positive word of mouthwas 0.88 (

a

5

0.93). In the second sample, the correla-tion was 0.80 (

a

5

0.89). Given the theoretical similarityand high degree of correlation, responses to those twomeasures were summed to make a single dependent vari-able, “future product purchase intentions,” which wasused in all ensuing analyses.

Hypotheses

Multiple regression was used to test the hypotheses,and as displayed in Table 2, all three were supported. Ofparticular interest, both telephone and delivery servicesatisfaction (H2 and H3) were found to be significantpositive predictors of future product purchase intentions.This demonstrates the importance of ancillary

services

togenerate future

product

sales in industrial markets.

Fundamental differences in the two

populations studied add generalizability.

89

The relative sizes of the parameter estimates calcu-lated from the second sample are interesting (Table 2).Telephone service satisfaction had the greatest effect onfuture product purchase intentions, nearly double the ef-fect of delivery satisfaction and about four times that ofpast product satisfaction. Clearly, ancillary services wereextremely important to buyers in the oligopolistic veteri-nary supplies market.

Given the relatively large correlations between inde-pendent variables (Table 1), one might question the accu-racy of the beta estimates. However, the large samplesize reduced the standard errors of the estimates to 0.07or less (Table 2), thus substantially offsetting the colinear-ity problem among the variables and allowing the effectsof the three independent variables to show. To illustratethese effects further, we performed a hierarchical regres-

sion analysis to determine if the ancillary services madean incremental contribution to future product purchaseconsiderations after the effects of product satisfactionwere removed. Those results are presented in Table 3.

In the first stage, the dependent variable (future prod-uct purchase intentions) was regressed on product satis-faction alone. The model was significant at the 0.0001level (R

2

5

0.35), and roughly half of the full model ex-plained variance (Table 2: R

2

5

0.66) was explained bythe product variable alone. Clearly, past product perfor-mance was very important to these respondents.

In the second stage, residual variance from the firststage was regressed on the two service variables. Asshown in the lower half of Table 3, this model was alsosignificant at the 0.0001 level (R

2

5

0.31). Both tele-phone and delivery service satisfaction remained signifi-

ConsiderPurchaseNext Time

WouldRecommendto a Friend

TelephoneService

Satisfaction

DeliveryService

SatisfactionProduct

Satisfaction

Sample 2 - Veterinary Supplies DataConsider purchase next time 1.00000 0.80467 0.70390 0.62157 0.56944

0.0 0.0001 0.0001 0.0001 0.0001572 570 567 572 516

Would recommend to a friend 0.80467 1.00000 0.68849 0.60589 0.560400.0001 0.0 0.0001 0.0001 0.0001

570 577 572 577 522

Telephone service satisfaction 0.70390 0.68849 1.00000 0.61053 0.575830.0001 0.0001 0.0 0.0001 0.0001

567 572 575 575 520

Delivery service satisfaction 0.62157 0.60589 0.61053 1.00000 0.541050.0001 0.0001 0.0001 0.0 0.0001

572 577 575 580 523

Product satisfaction 0.56944 0.56040 0.57583 0.54105 1.000000.0001 0.0001 0.0001 0.0001 0.0

516 522 520 523 523

Pearson correlation coefficients/Prob

.

|R| under Ho: Rho

5

0/number of observations.

TABLE 1Correlations

Consider PurchaseNext Time

Would Recommendto a Friend

Telephone HelpSatisfaction

Sample 1 - Computer Networking Products DataConsider purchase next time 1.00000 0.87565 0.47926

0.0 0.0001 0.000176 76 75

Would recommend to a friend 0.87565 1.00000 0.378890.0001 0.0 0.0001

76 77 76

Telephone help satisfaction 0.47926 0.37889 1.000000.0001 0.0001 0.0

75 76 76

90

TABLE 2Multiple Regression Results

Sample 1 - Computer Networking Products DataDependent Variable: Future purchase consideration

1

Positive WoM

Source

Analysis of Variance

dfSum of

SquaresMean

Square F Value Prob

.

F

Model 1 171.82716 171.82716 18.000 0.0001Error 73 696.83950 9.54575C Total 74 868.66667

Root MSE 3.08962 R-square 0.1978Dep Mean 8.53333 Adj R-sq 0.1868C.V. 36.20647

Variable

Parameter Estimates

dfParameterEstimate

StandardError

T for H0:Parameter

5

0 Prob

.

|T|

Intercept 1 4.807669 0.94784118 5.072 0.0001Telephone Serv. Sat. 1 0.881466 0.20776135 4.243 0.0001

Sample 2 - Veterinary Supplies DataDependent Variable: Future purchase consideration

1

Positive WoM

Source

Analysis of Variance

dfSum of

SquaresMean

Square F Value Prob

.

F

Model 3 1994.55583 664.85194 344.354 0.0001Error 509 982.73754 1.93072C Total 512 2977.29337

Root MSE 1.38950 R-square 0.6699Dep Mean 12.43080 Adj R-sq 0.6680C.V. 11.17792

Variable

Parameter Estimates

dfParameterEstimate

StandardError

T for H0:Parameter

5

0 Prob

.

|T|

Intercept 1 1.328103 0.35228301 3.770 0.0002Product Satisfaction 1 0.285284 0.05902624 4.833 0.0001Telephone Serv. Sat. 1 1.076420 0.07280811 14.784 0.0001Delivery Serv. Sat. 1 0.420513 0.06609511 6.362 0.0001

cant predictors and telephone service satisfaction was thefar larger coefficient of the two. This demonstrates thepower of ancillary services to drive future product pur-chase considerations even after a possible “halo effect”with product satisfaction has been controlled.

CONCLUSIONS, MANAGERIAL IMPLICATIONS, AND LIMITATIONS

Customer satisfaction with ancillary services has beenshown to positively influence future product purchase in-

tentions in two very different industrial markets. Thus,managers have empirical suppport of the positive effectsderived from the often costly addition of services such astelephone personnel and delivery options. These effectspersisted even after statistically contolling for a possible“halo effect” with product satisfaction.

The predictive ability of the three independent variablemodel was substantial (R

2

5

0.66). Tangible (product sat-isfaction) and intangible (two ancillary services) productattributes accounted for two-thirds of the variance in fu-ture product purchase intentions. Thus, the three predic-

91

tors tested in this research appear to be key for managersto consider when trying to build competitive advantage inindustrial product markets. Ancillary services were pow-erful determinants of future product purchase behavior.

Further, in the three independent variable model, theregression coefficient for telephone satisfaction wasroughly four times the magnitude of the past product sat-isfaction coefficient, suggesting its considerable relativeimportance. This finding should be tempered with at leastthree caveats lest someone disregard their core productand over-emphasize ancillary services. First, it is likely

that the veterinarian market exhibits the same two-stageevaluation of alternatives observed by Shaw et al. [17] inthe industrial market for computer mainframe operatingsystems [28]. Vendor products must meet some baselineperformance criteria before other factors, such as ancil-lary services, are even considered. Thus, just because themagnitude of the product satisfaction coefficient was notas large as the others, it does not mean that product satis-faction is unimportant. Rather, it most likely means thatthe products of the survey sponsor were perceived as ad-equate for the uses intended, and of high enough quality

TABLE 3Hierarchical Regression: Product Satisfaction, then Services Satisfaction

Stage 1 Independent Variable: Product SatisfactionDependent Variable: Future purchase consideration

1

Positive WoM

Source

Analysis of Variance

dfSum of

SquaresMean

Square F Value Prob

.

F

Model 1 1044.95811 1044.95811 276.906 0.0001Error 514 1939.67948 3.77370C Total 515 2984.63760

Root MSE 1.94260 R-square 0.3501Dep Mean 12.43992 Adj R-sq 0.3488C.V. 15.61585

Variable

Parameter Estimates

dfParameterEstimate

StandardError

T for H0:Parameter

5

0 Prob

.

|T|

Intercept 1 6.201799 0.38450693 16.129 0.0001Product Satisfaction 1 1.083430 0.06510810 16.640 0.0001

Stage 2 Independent Variables: Telephone and Delivery Service SatisfactionsDependent Variable: Residuals from Stage 1

Source

Analysis of Variance

dfSum of

SquaresMean

Square F Value Prob

.

F

Model 2 600.49688 300.24844 114.637 0.0001Error 510 1335.75372 2.61912C Total 512 1936.25059

Root MSE 1.61837 R-square 0.3101Dep Mean

2

0.00548 Adj R-sq 0.3074C.V.

2

29551.39339

Variable

Parameter Estimates

dfParameterEstimate

StandardError

T for H0:Parameter

5

0 Prob

.

|T|

Intercept 1

2

5.916650 0.40035269

2

14.779 0.0001Telephone Serv. Sat. 1 0.740161 0.07970077 9.287 0.0001Delivery Serv. Sat. 1 0.193083 0.07444747 2.594 0.0098

92

that other factors, such as ancillary services, are used tomake vendor choices.

The second caveat is method related. In this study, asingle informant was used at each location. Although thepersons queried in each sample should be key to subse-quent purchase decisions, previous research suggests thatmany organizational buying decisions are not made by asingle individual [e.g., 27]. Thus, although respondentswere asked two questions that implicity assume a buyinggroup (“would you recommend” and “would you con-sider purchasing next time”), in the end, a respondent’svendor selection could be substantially changed by otherin the buying group before an order is actually placed.

Finally, this study is limited by the samples them-selves. Respondents were from either (1) a broad rangeof industries but with the narrow focus of personal com-puter networking, or (2) from the single industry of veter-inary clinics. Although substantial differences exist, bothwere modified rebuy situations in industrial populationsmarked by substantial buyer dependence on a single ven-dor. This study should be replicated in other organiza-tional purchasing situations where those caveats do notapply before these results are accepted as conclusive.

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APPENDIXSurvey Questions

StronglyDisagree Neutral

StronglyAgree

1 2 3 4 5 6 7

Sample 1 - Computer Networking Products Data1. I will consider purchasing this company’s products for our next

requirement.2. If asked, I would recommend this company’s products to a friend who is

not in my company.3. I am satisfied with the services I received from the help line

representative(s).Sample 2 - Veterinary Supplies Data

1. I will consider purchasing supplies from (company name) for our next requirement.

2. If asked, I would recommend (company name) to a friend who is not in my practice.

3. I am satisfied with the service I received during my last telephone call to (company name).

4. I am satisfied with the service that I last received from a (company name) delivery person.

5. I am satisfied with the efficacy of (company name) products.