Gap Analysis of value delivered by company and value received by customer

1

1

ACKNOWLEDGEMENT

I thank Almighty Allah who blessed us and made it possible for us to

complete this report. I am also very grateful to our parents who

supported us. I wish to express profound gratitude to my teacher Mr.

“Adnan Shahbir” for his guidance.

2

2

Supervisor certificate

This is certified that Mr. Umair Akhtar (Roll no. 6328-FMS/MBA/F13) and Mr.

Shahid Iqbal (Roll no. 6343-FMS/MBA/F13) of MBA/F13 have completed their

project report entitled “Gap Analysis between value deliver by company and value

received by customer” under my supervision. I have checked this report and found it

bona fide work of authors.

----------------------------------------

Supervisor (Adnan Shahbir)

-----------------------------------

Head Department of Marketing,

Faculty of Management Sciences,

International Islamic University, Islamabad.

3

3

Gap Analysis between Value Delivered By Company and Value

Received By Customer

By

Umair Akhtar (Reg. No. 6328-FMS/MBA/F13)

Shahid Iqbal Khan (Reg. No. 6343-FMS/MBA/F13)

MASTER OF BUSINESS ADMINISTRATION

(Marketing)

Department of Marketing

Faculty of Management Sciences

4

4

International Islamic University Islamabad

Gap Analysis between Value Delivered By Company and Value

Received By Customer

By

Umair Akhtar (Reg. No. 6328-FMS/MBA/F13)

Shahid Iqbal Khan (Reg. No. 6343-FMS/MBA/F13)

A project report submitted to the Department Faculty of Management Sciences,

International Islamic University Islamabad in partial fulfillment of the requirements for the

degree of

MASTER OF BUSINESS ADMINISTRATION

(Marketing)

Submitted To:

Mr. Adnan Shahbir

Department of Marketing

Faculty of Management Sciences

5

5

International Islamic University Islamabad

Dedication:

I dedicate this project report to My beloved parents, teachers and Friends for keeping my spirit high And for their love, support and

Guidance throughout Completing this report.

6

6

COPYRIGHT© 2012 BY ALL MEMBERS OF OUR GROUP

All rights are reserved. No part of this project report can be reproduced

in any form or any means such as photocopy or electronic media etc.

without prior approval of authors

7

7

8

8

Contents Topic of research ........................................................................................................................................... 9

Introduction to topic ..................................................................................................................................... 9

Objectives of research .................................................................................................................................. 9

Significance of research .............................................................................................................................. 10

Theoretical framework ............................................................................................................................... 11

Hypothesis testing....................................................................................................................................... 12

Research methodology ............................................................................................................................... 12

Nature of research .................................................................................................................................. 12

Data collection ........................................................................................................................................ 12

Target market ......................................................................................................................................... 12

Sample size .............................................................................................................................................. 13

Analysis tools .......................................................................................................................................... 13

Schedule .................................................................................................................................................. 13

Literature review ......................................................................................................................................... 13

Questionnaire ............................................................................................................................................. 15

Data analysis ............................................................................................................................................... 20

Conclusions and recommendations ............................................................................................................ 48

References .................................................................................................................................................. 50

9

9

Topic of research

Gap between value delivered by the companies and value received by the

customers.

Introduction to topic

Supply chain management is a key to deliver value to customers. Value

delivery definitely leads to greater customer satisfaction and thus results in higher

profitability. But there are some gaps between the value delivered by the company

and value received by the customers. Ultimately, companies fail to attract

customers in spite of all their sincere and significant efforts. This gap is created due

to some practices and some factors relating to supply chain and customers. These

practices and factors can be supposed to lift company by the supply chain staff but

actually results in its failure.

Objectives of research

Main objective of this research is definitely to find the reasons behind the gap

between the value delivered by the company and value received by the customers.

We may find answer of following questions by this research.

Is there any gap between the value delivered by the company and the value received

by the customers?

What are the major reasons causing this phenomenon?

What measures can be taken to eradicate this gap?

10

10

Significance of research

Customer value is what a customer wants from a company whenever he

purchases some product or gets some service. Customer satisfaction is an important

issue all around the world with special context to customer value. Heavy budgets

are consumed to raise customer satisfaction levels. Customer satisfaction leads

companies to achieve their ultimate goal of profitability as a satisfied customer

becomes a loyal customer and company earns a lot by serving a loyal customer with

relatively less cost of marketing and negotiation involved.

This research is a very little but important effort to discuss some important

factors involved in dissatisfaction of customers in Pakistan that lead to a gap

between the value delivered by the companies and value received by the customers

mostly in retail market of Pakistan. It will

Help companies to have some work on eradicating those reasons that lead to such

activity

will enable students of business administration to understand conceptual

framework of value delivery gap, its relationship with dissatisfaction of customers

and its reasons

11

11

Theoretical framework

We are going to find some reasons behind the practically existing gap

between value delivered by the company and the value received by the customers.

There can be some predictable factors causing this phenomenon while on the other

hands, there will be some surprise factors too that will be revealed once we go to

data collection. Value gap always creates some dissatisfaction of customers. So we

can say that the factors causing dissatisfaction can be revealed as the factors

causing the value gap. By studying the literature review that is given in the next

pages, we have identified some common and major factors of dissatisfaction of

customers. Initial theoretical framework for this research project can consist of

following variables. Independent Variables

Dependent Variable

Access of

Customer for

Product and

Services

Trust Level of

Customer

Higher Customer

Expectation

Physical

Appearance of

Product

Low Employees

Participation and

Lower Service

Quality

Higher Pricing

Awareness Level

of Customer

Value Gap

12

12

Hypothesis testing

H0: Awareness has no relation with value gap.

H1: Awareness has strong relation with value gap.

H0: Access of Product has no relation with value gap.

H2: Access of Product has Strong relation with value gap.

H0: Trust level has no relation with value gap.

H3: Trust level has strong relation with value gap.

H0: Higher expectation has no relation with value gap.

H4: Higher expectation has strong relation with value gap.

H0: Physical appearance has no relation with value gap.

H5: Physical appearance has Strong relation with value gap.

H0: Low services quality has no relation with value gap.

H6: Low services quality has strong relation with value gap.

H0: Higher pricing has no relation with value gap.

H7: Higher pricing has Strong relation with value gap.

Research methodology

Nature of research

Research will be quantitative in nature as we will try to find different

conceptual and practical relationships during data interpretation to find results

Data collection

Secondary data will be collected through literature review about customer value

delivery. At least four different articles will be studied to collect secondary data

Primary data will be collected by designing a questionnaire that will consist of 15-

20 important questions related to this topic

Target market

Target market will be customers, retail, whole sale and distribution industry

of Islamabad, Faisalabad and Sahiwal

13

13

Sample size

Sample size would be 100 correspondents taken in equal proportion from all

three cities.

Analysis tools

Different display tools like charts will be used to analyze the data and get

results

Schedule

Literature review week 1

Primary data collection week 2-3

Data analysis week 4-5

data interpretation and report formulation week 6-7

Literature review

Customer value is closely associated with customer satisfaction. Customer

satisfaction is the most important factor for organizations and major area of concern

for marketers and scholars (Hwang, Jinsoo; Zhao, Jinlin 2010). Many researchers

have described the important factors that affect directly or indirectly customer

satisfaction (e.g., Nordin Sundin 2013, West 2014, Hwang, Jinsoo; Zhao, Jinlin

2010).

Customer’s satisfaction is a key concept and dimension for success of any

business because satisfied customers becomes loyal customer and it saves cost of

discounts and customer getting cost (West, NBRI survey 2012). Customer

satisfaction is of central importance for generating and developing sales (Hwang,

Jinsoo; Zhao, Jinlin 2010). A high level of customer satisfaction has a tendency to

lead to increased sales. The reason for this is because satisfied customers tend to

purchase the service or product again if they are satisfied with it which in turn

leads to increased profits .Increasing competitive pressure even increases

importance of customer satisfaction because of flurry of activities to strengthen

14

14

their positions in an environment with rising consumer demand and improved

services. (Dev, Meduri, Gupta, Nagi, 2013)

According to Hwang, Jinsoo; Zhao, Jinlin( 2010), there are three perceived

quality factors (good value, tasty food, and restaurant cleanness) that affect

customers satisfaction. On the other hand, three perceived quality factors (good

value, tasty food, and employees, knowledge of menu) most affected dissatisfied

customers.

According to West (2014) once the employees are in a company’s corner, if the

following 10 areas are incorporated into a business plan, it will be smooth sailing

towards big financial returns from high customer satisfaction. these are quality

delivered to customers, separation anxiety, easy access of customers to products and

services of companies, prices f products in terms of value, an easy atmosphere and

less waiting time for customer ease, responsibility of employs towards their work,

sense of security for customers on store and the advanced and updated technology

that helps in making products efficient to use and easy to approach.

Dev, Meduri, Gupta, Nagi, (2013) have suggested that there are several

factors which are affecting the retail banking sector in Delhi. These factors are

responsiveness and responsibility taking of employees towards customers, customer

orientation towards banking facilities, standards of facilities that banks are offering

to customers, interest rates and other charges that are core of the customer intent

in banking, client participation in development of services that deliver value to

customers, funds transfer system and access of employees.

Nordin, Sundin (2013) revealed that customer satisfaction in Swedish

financial sector is affected by several variables like competence, trust, appearance

and word of mouth. The most important variable was competence followed by trust.

The other two variables were fairly equal regarding their impact on customer

satisfaction. The fact that Appearance was shown to affect customer satisfaction

could be regarded as especially interesting. This is interesting because most

banking errands are conducted online where the physical appearance of the bank

does not come into play. However, one could assume that the customers find it

important that the bank looks professional even if they do not visit it often.

15

15

Questionnaire

Name:

City:

Topic

“Gap between value delivered by the company and value received by the customers”

Questions related to H0

1) How do you see advertisement in context of creating awareness about

benefits which companies offer to customers?

o Effective

o Manipulating

o Distracting

o confusing

2) Are products of all companies readily available in the market?

o Yes often

o No with few exceptions

o Occasionally

o Of only some brands

3) Do you actually enjoy those benefits which are promised by companies in ads?

If no to above question, why?

o Complexity of procedure

o Retailers do not cooperate

o Companies make false promises

o Personal reasons

16

16

4) What do you expect the most from a company as a customer?

o Good quality

o Price discounts

o after sale services

o Social activities

o Feedback

o Relationship maintenance

5) can you easily identify your required products in the store

o yes

o no

o often

o seldom

6) If you find a product defective (having no formal warranty claim) , what is the

response of a shopkeeper?

o He does not change

o He changes but after a long time

o He changes at once

o He changes but charges extra for it

7) Should promotions schemes be reduced and quality should be improved

rather?

o Yes

o No

o To some extent

17

17


8) Do you watch advertisement on TV and newspaper?

o Yes often

o Just selected

o Occasionally

9) Are advertisements smart enough to attract you?

o Yes most of them


o Of some particular companies


10) When you go to a shop and demand for some particular brand, does retailer

provide you the same product which you require or he offers some

alternatives?

o Yes often he gives same product

o Yes if that is available or otherwise he offers similar type of product

o No he offers mostly some substitutes

11) Products of how many companies are often readily available in the market?

o Of Majority of well-known companies

o Of only few companies


12) Do you actually enjoy those benefits which are promised by companies in ads?

(it is from your end that whether you get those or not)

o Yes

o No

o Often

o Seldom

o

18

18

13) I think that companies are delivering according to their promises about their

products and services

o Agree all are delivering

o Agree but for majority of companies not for all

o Disagree with few exceptions

o Strongly disagree


14) Do you think that company’s stated promises are actually very much

‘deliverable’?(irrespective of whether they are actually being delivered or not)

o Yes

o To some extent

o no


15) Do you often see the supply teams of companies in markets?

o Yes frequently

o Occasionally

o Very rare

16) Supply teams of how many companies are often seen in the market?




17) If you win a prize do you get cooperation from retailer?

o Yes

o No

o Mostly

o Seldom

19

19

18) If you return a product for warranty or guaranty claim do products return in

time?

o Yes

o No

o Mostly

o Seldom

o Questions related to H7

19) Should companies cut the spending on ads and reduce prices?

o Yes

o No

o Little cut should be done

20

20

Data analysis

Very nature of research is qualitative and results will be displayed by charts and

will be interpreted according to overall sense of responses of respondents about all

hypotheses one by one. Let us have a discussion here:

H1: Value gap between value delivered by the companies and value received by the

customers is because of lower knowledge of customers regarding products and

services of companies

Do you watch advertisement on TV and newspaper?

o Yes often

o Just selected

o Occasionally

Results of responses of respondents are given in table

Yes often Just selected Occasionally

35% 30% 35%

27

28

29

30

31

32

33

34

35

yes often just selected occasionally

watching advertisement

Series 1

21

21

Interpretation

Customer knowledge is directly proportional to the level by which he watches

advertisement because advertisement is one of the major sources that can give

knowledge to customers about the products and services that a company offers to

the customer.

Results show that level of interest of customers towards advertisement is on

lower side. Only 35% customers are always willing to watch advertisement while

others are selected in their approach and watch only those advertisements which

are designed in interesting manner.

This is one of the parameters that show that customers have low knowledge

about products and services of companies working in markets of Pakistan.

Are advertisements smart enough to attract you?

o Yes most of them


o Of some particular companies

Results are as given below

Yes most of them No with few exceptions Of some particular

companies

40% 40% 20%

22

22

Interpretation

Knowledge is closely interrelated to the attraction of the source that delivers

knowledge. A teacher who is fully equipped with the ideas and knowledge will not

be able to deliver something important to students if he does not have any sort of

attraction for students.

Similarly a company can never deliver knowledge to the customers unless it

designs its advertisement in such an artistic way that these attract the emotions,

eyes and sentiments of customers.

Results being displayed in above given graph are clear indication of the level

of attraction that present advertisement are creating for customers and it shows

that situation is not much encouraging. Only 40% respondents were of the view that

majority of ads attract them. It shows that advertisements have failed to attract to

customers and have ultimately lead to lower knowledge of customers about the

products and services of companies.

0

5

10

15

20

25

30

35

40

yes most ofthem

no with fewexceptions

of justselected

companies

attraction of advertisement

23

23

How do you see advertisement in context of creating awareness about

benefits which companies offer to customers?

o Effective

o Manipulating

o Distracting

o confusing

Results are given below

effective manipulating distracting Confusing

40% 30% 10% 20%

Interpretation

Knowledge is always ineffective if a person does not have trust upon

knowledge. Knowledge is fruitful only when any productive action is taken based on

that knowledge or awareness. Lower trust level always avoids people to behave

0

5

10

15

20

25

30

35

40

effective manipulatimg distracting confusing

advertisement nature

24

24

accordingly with knowledge. Customers can only pay for something if they are sure

that the knowledge delivered to them is correct. It is neither manipulated nor

exaggerated.

Results given above in the chart and table show that customers mostly do not

take advertisement as a source of getting knowledge is only 40% customers were of

the view that advertisement are an effective way to get knowledge about company

and its products and services. All other were of the view that advertisements are

manipulating, distracting or confusing in nature.

Summary of findings related to H1

All three above given questions have shown a single trend and that clearly

states that customers have a few knowledge about the products and services of the

companies. This is because advertisement are major source of creating customer

awareness and delivering knowledge to customers and advertisement at the

moment are not much interesting and attractive to get customers involved. Further,

customers have a negative view about the advertisement as majority of customers

take advertisement as a source of manipulating information to distract and confuse

customers.

H2: Value gap between value delivered by the companies and value received

by the customers is because of fewer access of products and services of

companies to customers

When you go to a shop and demand for some particular brand, does retailer provide

you the same product which you require or he offers some alternatives?

o Yes often he gives same product

o Yes if that is available or otherwise he offers similar type of product

o No he offers mostly some substitutes

Results are given below:

25

25

Yes often gives same

product

Yes if available No offers substitutes

25% 65% 10%

Interpretation

Concept of place and availability are defined by the access of product easily to

the target customer. It is also important to know whether retailers offer the

products to customers easily whenever they demand for some particular brand or

they offer some substitutes. Above given question answers the same phenomenon.

Responses of respondents are clear depiction of the fact that retailer provides

mostly the same product that a customer demands. It shows that there is not

problem of access from retailer end as retailers do not intentionally promote

products of some particular companies. It is only matter of making goods and

products available at the retail store and surly it is responsibility of sales team.

0

10

20

30

40

50

60

70

yes offerssame

product

yes ifavailable

no offerssubstitutes

offering of required product byretailer

26

26

Are products readily available in the market?

o Yes


o Occasionally

o Often

Results are as:

Yes often No with few

exceptions

occasionally Often

25% 15% 15% 45%

As in the question above, we came to know that retailers do not have any

problem in delivering and offering same product as demanded by the customer. Now

important thing is whether demanded products are readily available in the market

or not.

Data given above clearly shows that in urban markets of Pakistan, normally

and usually demanded products are readily available in most of the retail outlets.

70% of the respondents were agree on the higher side while 15% had some

reservations and only 15% were totally disagreed with the idea that usually

demanded products are readily available in the market

0

5

10

15

20

25

30

35

40

45

yes no occasionally often

availbility of products

27

27

Products of how many companies are often readily available in the market?



Results are given as

Of majority of well-known companies Of very few companies

85% 15%

Interpretation

This question is an extension of the very idea discussed in above question.

Central purpose of this question is to judge whether products of all companies are

readily available or not. It differentiates itself from the above question in a sense

that above question discussed the idea of availability of usually used products while

this question addresses with the idea of availability of products of all well known

companies whether you use that or not.

0

10

20

30

40

50

60

70

80

90

of majorityof wellknown

of very fewcompanies

availibiliy of products of allcompanies

28

28

Results are clear depiction of the fact that a strong availability of brands of

major companies is being observed in the markets of urban areas of Pakistan as

85% of the respondents were supporting the availability of products of well known

companies.

Summary of findings of H2

Access and availability of products is very much necessary for the value deliverance

by the company to the customers. This is an area of major focus for the companies of

Pakistan and special incentives are being given to the sales team for making

products available at every place in the markets.

Efforts of companies look to be successful as the availability of products of

companies about whom they know well is being observed at higher level. Italso

concludes that the reason being customer dissatisfaction that creates value gap

cannot be find in access of customers and availability of products and services of

companies as far as urban markets of Pakistan are concerned.


customers is because of lower trust level of customers on the promise of companies

regarding their products and services

Do you actually enjoy those benefits which are promised by companies

in ads? (It is from your end that whether you get those or not)

o Yes

o No

o Often

o Seldom

Results are given as:

29

29

yes No often Seldom

5% 25% 35% 35%

Interpretation

Trust level of a customer upon services and offerings of products compels him

to actually enjoy those products and services and to pay for them. Above given

question tends to measure overall perception of customers about fulfillment of

promises of company that will tell us level of trust of customers on these benefits.

Results show a relatively lower level of trust of customers about actual

delivery of benefits from the companies to the customers as only 40% respondents

were of the view that they get some sort of benefits offered by the companies in the

advertisements.

0

5

10

15

20

25

30

35

yes no often seldom

enjoyement of benefits offeredby the company

30

30

If no to above question, why?

o Complexity of procedure

o Retailers do not cooperate

o Companies make false promises

o Personal reasons


Complexity of

procedures

Retailers do not

cooperate

Companies make

false promises

Personal reasons

25% 25% 35% 15%

Interpretation

This question is an extension of the question given above. Supporting results

will enhance the reliability of above given question as well as will help to

understand the reasons behind not getting benefits. It will reveal whether these

reasons are well associated to the trust level of customers or those reasons are

something irrelevant to trust.

Results showed that customers not enjoying benefits of companies due to

their personal reasons were just 15% while all other persons described it as a fault

0

5

10

15

20

25

30

35

complexityof

procedures

etailers donot

cooperate

companiesmake falsepromises

personalreasons

rasons of not gettngpromised benefits

31

31

of companies by making false promises and keeping system complex so that no one

can get benefit of thee promises. Some were of the view that retailers do not

cooperate with them that leads them to be deprived of the benefits in the ads.

Summary of the findings of H3

Trust is something very necessary to get and keep cooperation between two

parties smoothly. Trust in the knowledge and promises lead customers to get the

benefits and value offered y the companies to the customers. Value delivery finally

leads to satisfaction of customers and satisfied customers are always a source of

higher profitability for companies when they become a loyal customer.

Results show that trust level of customers of Pakistan upon companies and

their stated promises is very low. Customers are of the view that the benefits

offered to them are not mostly delivered to them. They consider complexity of

procedures and less cooperation of retailers as the major reason of benefits not

being delivered along with a very serious note of a sense that companies make false

promises too that they do not even plan to deliver. So, the trust level of customers is

shaky that leads to customer dissatisfaction and ultimately creates a gap between

the value delivered by the companies and value received by the customers.


customers is because of higher expectations of customers regarding products and

services of companies

What do you expect the most from a company as a customer?

o Good quality

o Price discounts

o after sale services

o Social activities

o Feedback

32

32

o Relationship maintenance

Results are given below

Good

quality

Price

discounts

after

sales

services

Social

activities

feedback Relationship

maintenance

30% 20% 10% 10% 10% 20%

Interpretation

This question shows the demands; priorities and more comprehensively

expectations of customers form the companies as a whole. It is observed that higher

expectations always lead to disappoint and disappoint leads to customer

dissatisfaction.

Results given above clearly show that expectation level of customer about

products is very high. Customers ‘require all above given qualities to the maximum

level as the overall percentage of persons requiring at least an average standard of

two is 86%. Expectation level of 86% leads to greater chances of disappointment.

Do you think that company’s stated promises are actually very much ‘deliverable’?

(Irrespective of whether they are actually being delivered or not)

o Yes

o To some extent

o no


Yes To some extent No

50% 40% 10%

33

33

Interpretation

This is an extension of the question given above about the customer

expectations. Customers may feel that the companies are not fulfilling their

promises about their products and services but on the other hand they may have a

feeling that these promises are actually deliverable practically.

Results show that customers do expect that companies should fulfill their

promises because all these promises can be delivered practically. This is supported

by a strong public opinion as 90% people say that more or less these all promises

are deliverable and should be delivered.


Higher expectations always lead to disappoint because it is almost very near

to impossible to always keep up with the expectations because their re several

contradictory and conflicting interests of companies at a time. Whenever

expectations re not met, disappointment lead customers towards dissatisfaction and

ultimately to gap in the value delivered by the company and value received by the

customer.

0

5

10

15

20

25

30

35

40

45

50

yes to some extent no Category 4

34

34

Results show that customers in Pakistan have highest level of expectations

and level of these expectations is mostly raised by the companies ‘their selves as

they promised the benefits that they were not willing to deliver or they had not

enough resources to do so Higher level expectations are contributing in value

delivery gap.


customers is because of less physical appearance of products and services provided

by the companies to customers

Can you easily identify your required products in the store?

o yes

o no

o often

o seldom

Here are the results.

Yes no often Seldom

30% 10% 40% 20%

0

5

10

15

20

25

30

35

40

yes no often seldom

physical appearance

35

35

Interpretation

Physical appearance of the product and services helps customers to identify and use

them. Unless these are made visible, customers are always in a fist how to get and

use those benefits. So, physical appearance is as necessary as all other factors in

value delivery.

Results show that almost 70% of the respondents are of the view that products of

majority of companies are readily visible in stores and they can easily identify them.

This shows the aspect that companies are focusing on merchandising in stores to

greater extent now.

Do you often see the supply teams of companies in markets?

o Yes frequently

o Occasionally

o Very rare

Here are the results

Frequently occasionally Rare

55% 25% 20%

36

36

Interpretation

This question is also logical extension of the first one but in a different

dimension. Previously we asked respondents about visibility of products in the store

while here we asked about the visibility of supply teams in the market because

visibility of supply team gives confidence to customer on piracy issues and they can

get information too.

Results show that visibility of supply teams in the market is on the higher

side. About 80% of respondents were of the view that they see supply teams in their

areas more or less strengthening the conclusion in previous question.


Physical appearance of products in the store and easy visibility helps customers to

identify the required product and get them separated. Similarly, physical

appearance of supply teams is always useful for a company to give confidence to

customers about the issues like piracy etc. as well as building relationships with the

customers. So these factors are always of major concern for the companies

0

10

20

30

40

50

60

appearance of supply teams

37

37

Results in above given both questions show that companies have done well to make

their products visible and ensure their supply teams to appear in the markets to get

customers confidence. Merchandising is an aspect that companies are focusing in

Pakistan and it is obvious from the customer opinion too.


customers is because of less active participation of employees and low service

quality provided by the companies to customers

If you win a prize do you get cooperation from retailer?

o Yes

o No

o Mostly

o Seldom

Results are;

Yes No Mostly Seldom

15% 60% 15% 10%

0

10

20

30

40

50

60

yes no mostly seldom

cooperation from retailerregrding services

38

38

Interpretation

Services quality and participation of employees for good will of company is a very

important factor for customer satisfaction and all the researches approve it as the

most important factor. Service quality involves employees of companies as well as

retail outlets who have selling contracts with companies.

Results show that retailers never cooperate with customers whenever any customer

wins a prize as announced by the company. Ultimately, customer is unable to get

his prize and a gap creates between the value delivered by the company and value

received by the customer.

If you find a product defective (having no formal warranty claim), what is the

response of a shopkeeper?

o He does not change

o He changes but after a long time

o He changes at once

o He changes but charges extra for it

Results show

Does not change Changes but after

a long time

Changes at once Changes but

charges extra

15% 65% 10% 10%

39

39

If you return a product for warranty or guaranty claim do products return in time?

o Yes

o No

o Mostly

o Seldom

Results are

Yes no mostly Seldom

20% 45% 10% 25%

0

10

20

30

40

50

60

70

does notchange

changes atonce

changes aftrlong time

changes butcharges extra

Series 1

0

5

10

15

20

25

30

35

40

45

yes no mostly seldom

warranty in time

40

40

Interpretation

Both questions given above have a same intent and that is whether

customers get their products changed in time as promised by the company. This

question depicts the quality of promised services by the company for the customers.

Results show that 75% customers are of the view that products are either not

changed at all or not changed in time. Some were of the view that these supposing

free claims are charged by the retailers as well. It shows poor quality of services by

the retailers and even sometimes by representatives of companies too.

Summary of finding of H6

Services quality and participation of employees for good will of company is a

very important factor for customer satisfaction and all the researches approve it as

the most important factor. Service quality involves employees of companies as well

as retail outlets who have selling contracts with companies.

Results show that service quality being offered by the retailers on behalf of

companies is very poor. As most of the companies are dependent upon retailers for

customer services, retailer’s negative role hurts companies as it affects customer

satisfaction adversely. This customer dissatisfaction leads to gap between value

delivered by the company and the value received by the customers.


customers is because companies give less value to prices in the value structure

provided by the companies to customers

41

41

Should companies cut the spending on ads and reduce prices?

o Yes

o No

o Little cut should be done

Results are given below:

Yes no Little cut should be

45% 20% 35%

Should promotions schemes be reduced and quality should be improved rather?

o Yes

o No

o To some extent

Here are results

0

5

10

15

20

25

30

35

40

45

yes no little cut

cut on ads to reduce prices

42

42

yes no To some extent

40% 20% 40%

Interpretation

Value is something of worth for customers as compared to the cost that a

customer pays to company. Value can be perceived differently by different persons.

It may be that the value perception by company is different than the value

perception by the customers.

Results show that customers think that budget on advertisement should be

cut and they should be given relaxation in prices so that their purchasing capacity

may improve. Similarly majority of the respondents are of the view that quality is

area of major concern, so companies should invest on quality improvement rather

than investing heavily on advertisement.

0

5

10

15

20

25

30

35

40

yes no to someextent

quality improvement ratherthan advertisement

43

43


Value is something of worth for customers as compared to the cost that a

customer pays to company. Value can be perceived differently by different persons.

It may be that the value perception by company is different than the value

perception by the customers.

Results given above clearly show that there is a gap between perceived value

of company and perceived value of customers. Actually this gap is between the

approach by which customers and companies define value. Company focuses on

customer knowledge and some supporting benefits while customers are always

concerned with prices and quality.

44

44

Correlation

Correlations

Value gap Awareness

Access of

product Trust Expectation

Physical

Appearance

Service

Quality

Higher

Pricing

Value gap Pearson

Correlation

1 .921** .596

** .859

** -.848

** .765

** .819

** .919

**

Sig. (2-

tailed)

.000 .000 .000 .000 .000 .000 .000

N 100 100 100 100 100 100 100 100

Awareness Pearson

Correlation

.921** 1 .582

** .856

** -.815

** .875

** .786

** .905

**

Sig. (2-

tailed)

.000

.000 .000 .000 .000 .000 .000

N 100 100 100 100 100 100 100 100

Access of

product

Pearson

Correlation

.596** .582

** 1 .412

** -.337

** .602

** .563

** .522

**

Sig. (2-

tailed)

.000 .000

.000 .001 .000 .000 .000

N 100 100 100 100 100 100 100 100

Trust Pearson

Correlation

.859** .856

** .412

** 1 -.753

** .730

** .752

** .886

**

Sig. (2-

tailed)

.000 .000 .000

.000 .000 .000 .000

N 100 100 100 100 100 100 100 100

Expectation Pearson

Correlation

-.848** -.815

** -.337

** -.753

** 1 -.607

** -.673

** -.802

**

Sig. (2-

tailed)

.000 .000 .001 .000

.000 .000 .000

N 100 100 100 100 100 100 100 100

45

45

Physical

Appearance

Pearson

Correlation

.765** .875

** .602

** .730

** -.607

** 1 .747

** .780

**

Sig. (2-

tailed)

.000 .000 .000 .000 .000

.000 .000

N 100 100 100 100 100 100 100 100

Service Quality

Pearson

Correlation

.819** .786

** .563

** .752

** -.673

** .747

** 1 .847

**

Sig. (2-

tailed)

.000 .000 .000 .000 .000 .000

.000

N 100 100 100 100 100 100 100 100

Higher Pricing Pearson

Correlation

.919** .905

** .522

** .886

** -.802

** .780

** .847

** 1

Sig. (2-

tailed)

.000 .000 .000 .000 .000 .000 .000

N 100 100 100 100 100 100 100 100

**. Correlation is significant at the 0.01 level (2-tailed).

There is a statistically significant, Negative relationship between value gap and

Higher Customer expectation r = -.848, (Two Tailed) <0.01. While other variables

have positive relationship with the value gap. The awareness has strong relation

with the value gap where Pearson Correlation is .921.

Regression Analysis

We perform simple liner regression analysis to test value gap. Value gap depend

upon the different variables like awareness, high expectation, trust, high pricing,

Physical appearance, Access of products and service quality. The result of

regression analysis for the main effect of awareness, high expectation, trust, high

pricing, Physical appearance, Access of products and service quality are

46

46

Variables Entered/Removed

Model

Variables

Entered

Variables

Removed Method

1 Higher Pricing,

Access of

product,

Expectation,

Physical

Appearance,

Service Quality,

Trust, Awareness

. Enter

a. All requested variables entered.

The first box of the output is labeled ‘variables entered/removed’. This is simply a

list of all the predictors we have entered into the equation, we enter value gap

variable which is depended variable and other independed variables are Higher

Pricing, Access of product, Expectation, Physical Appearance, Service Quality,

Trust, Awareness.

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

Change Statistics

R Square

Change F Change df1 df2 Sig. F Change

1 .961a .924 .919 .23511 .924 160.748 7 92 .000

a. Predictors: (Constant), Higher Pricing, Access of product, Expectation, Physical Appearance, Service Quality, Trust, Awareness

The R show overall correlation which is .961 while R (Square) is .919 which explain the model

and its show that the model is explained 91% while 9% of model is unexplained. The standard

error is .23511 which is good sign.

ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 62.200 7 8.886 160.748 .000a

Residual 5.086 92 .055

Total 67.286 99

a. Predictors: (Constant), Higher Pricing, Access of product, Expectation, Physical Appearance,

Service Quality, Trust, Awareness

47

47

ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 62.200 7 8.886 160.748 .000a

Residual 5.086 92 .055

Total 67.286 99

a. Predictors: (Constant), Higher Pricing, Access of product, Expectation, Physical Appearance,

Service Quality, Trust, Awareness

b. Dependent Variable: Value gap

ANOVA test used to check the fitness of the model. The ANOVA table indicates that the

regression model predicts depended variables significantly well. The regression of analysis show

DF is .0007 which is less than the 0.05 therefore the H0 of Anova is rejected and the H1 of

Anova which model is fit for prediction is accepted.

Coefficients

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) .614 .241 2.546 .013

Awareness .361 .114 .338 3.168 .002

Access of product .599 .144 .163 4.162 .000

Trust .145 .071 .134 2.031 .045

Expectation -.300 .071 -.243 -4.256 .000

Physical Appearance -.292 .155 -.126 -1.889 .062

Service Quality .096 .060 .093 1.607 .112

Higher Pricing .179 .070 .233 2.569 .012

a. Dependent Variable: Value gap

If the t value is 2 or more than 2 the H1 will accepted and H0 will rejected. If the

value of t is -2 Ho will be rejected and H1 will be accepted. There are two

hypotheses are rejected High expectation and physical appearance. High

expectation has no relation with value gap. Physical appearance has no relation

with value gap. If the B values less than 0.05 the H0 will be rejected and H1 will be

accepted.

48

48

Conclusions and recommendations

Following are some conclusions along with some recommendations related to

gap between value delivered by the companies and value perceived by the

companies.

Customers have less knowledge about the products and services of the

companies. This is because advertisement are major source of creating

customer awareness and delivering knowledge to customers and

advertisement at the moment are not much interesting and attractive to get

customers involved. Further, customers have a negative view about the

advertisement as majority of customers take advertisement as a source of

manipulating information to distract and confuse customers.

The availability of products of companies about whom they know well is

being observed at higher level. It also concludes that the reason being

customer dissatisfaction that creates value gap cannot be find in access of

customers and availability of products and services of companies as far as

urban markets of Pakistan are concerned.

Results show that trust level of customers of Pakistan upon companies and

their stated promises is very low. Customers are of the view that the benefits

offered to them are not mostly delivered to them. They consider complexity of

procedures and less cooperation of retailers as the major reason of benefits

not being delivered along with a very serious note of a sense that companies

make false promises too that they do not even plan to deliver. So, the trust

level of customers is shaky that leads to customer dissatisfaction and

ultimately creates a gap between the value delivered by the companies and

value received by the customers.

Results show that customers in Pakistan have highest level of expectations

and level of these expectations is mostly raised by the companies’ their selves

as they promised the benefits that they were not willing to deliver or they

49

49

had not enough resources to do so. Higher level expectations are contributing

in value delivery gap

Companies have done well to make their products visible and ensure their

supply teams to appear in the markets to get customers confidence.

Merchandising is an aspect that companies are focusing in Pakistan and it is

obvious from the customer opinion too

Service quality being offered by the retailers on behalf of companies is very

poor. As most of the companies are dependent upon retailers for customer

services, retailer’s negative role hurts companies as it affects customer

satisfaction adversely. This customer dissatisfaction leads to gap between

value delivered by the company and the value received by the customers.

There is a gap between perceived value of company and perceived value of

customers. Actually this gap is between the approach by which customers

and companies define value. Company focuses on customer knowledge and

some supporting benefits while customers are always concerned with prices

and quality

50

50

References

Fredrick Nordin, Klas Sundin (2008) customer satisfaction in financial sector of

Sweden. Umea School of Business

Ken west (2014) 10 key factors influencing customer satisfaction

National business research institute

Hwang, Jinsoo; Zhao, Jinlin (2010) Factors Influencing Customer Satisfaction or

Dissatisfaction in the Restaurant Business Using Answer Tree Methodology

Journal of Quality Assurance in Hospitality & Tourism,

Dev, Meduri, Gupta, Nagi (2013) factors influencing customer satisfaction in retail

banking in Delhi and NCR

Indian streams research journal