Introduction

This chapter reviews theoretical literature on
customer service and customer satisfaction, customer loyalty as well as the
difference between customer loyalty, retention and the barriers to customer
satisfaction. The aim of this chapter is to present literature relevant to the
research subject which has an added value to the subject of this thesis and to
provide a solid theoretical framework.

Customer

A Customers can best be described as a person who uses
the output of work, the end users of a product or service. They may be internal
in organization just like the employees and managers or external like members
of the public, competitors, or government (Dei-Tumi, 2013). “Custom” has the
same meaning as “habit”. A person who goes to a store on a frequent basis to
purchase products or services, thus it is their habit to buy from that
particular store. In the opinion of Peter Drucker, there are now a complete new
breed of customers with high standards and expectations (Dei-Tumi,
2013).

As competition keeps rising there is a need to come up
with new and creative ways of meeting the increasing demands of the customer, which
in turn demands better products and services and must have alternatives
available when not satisfied.

Customer service

Customer service is providing service to consumers
before, during and after a purchase. It also means serving the customer, and
involves all communication with the customer, this can include direct, or
indirect contact (dealing with complaint letters). According to Jamier
“Customer service is a series of activities designed to enhance the level of customer
satisfaction. The feeling that a product or service has met the customer
expectation” (Jamier, 2010). Customer service
can be shown in personal and interpersonal skills as communication skills,
listening skills, language, gestures and posture, telephone techniques (Jamier, 2010). According to
Turban, it is a number of activities designed to enhance the level of customer
satisfaction which is, the feeling that a product or service has met the customer
needs and expectations (Turban, 2002). Customer service can
be provided by a person or by automated ways called self-service.

Service quality

Service quality is the extent to which the customer
perceptions of service meet their needs and expectations. Service quality can
mean, the way in which customers are served in a company which could be good or
bad (A. Parasuraman, 2010). Parasuraman defines
service quality as “the differences between customer expectations and
perceptions of service” (A. Parasuraman, 2010). He argued that
measuring service quality as the difference between experienced and expected
service and was able to make managers identify gaps to what they offer as
services.