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ABSTRACT
Improving customer service quality offers the small business an opportunity to gain a competitive advantage over larger businesses; in effect, the business can retain customers by meeting or exceeding expectations. In the current study eight customer expectations differentiated primary and secondary customers of a focal organization: primary customers being those who give the majority of their business to the supplier, and secondary customers being those who do not. The results of the study demonstrate that primary and secondary customers can be differentiated by analyzing the degree to which their expectations have been met, and that specific expectation variables contributing to the discrimination between the two groups can be identified. Recommendations on how to approach the management of expectations are provided in addition to directions for future research.
INTRODUCTION
Exploring linkages among marketing concepts and the fields of entrepreneurship and small business provides a fertile ground for researchers in these disciplines (Hills & Laforge, 1992). For example, applications of marketing techniques to small business management in areas such as advertising effectiveness (Vaccaro & Kassaye, 1988), strategy (Shama, 1993), and exporting (Sriram & Sapienza, 1991) can be found in the literature. Another marketing concern, customer service, is an area in which smaller organizations can gain a competitive advantage over their larger competitors (Dent 1992).
Peterson (1992) has observed that customer dissatisfaction with large businesses appears to offer a major opportunity to small firms to differentiate and add value to their product and service offerings. Anderson and Fornell (1994) found that meeting customer expectations and satisfying customers are the most powerful weapons in the arsenals of small business managers. Small businesses, in particular, have consistently found it much more effective to compete with large firms by using defensive strategies to keep customers rather than through using conquest strategies which focus on acquiring new customers (Sewell, 1990). Systems of post-sale feedback, including data on products returned due to poor performance, number of referrals from satisfied customers, and number of warranty claims, can serve as indicators of service quality (Weinrauch & Natarajan, 1992). In fact a number of small firms have started incorporating management of customer expectations by using concepts similar to these in their marketing research practices.
However, while evidence exists to support the importance of...