Development of decision support matrix: determining the effectiveness of service recovery level in e-tailing

• Main Authors: Lim, Marvin Alexander S., Tan, Natasha Dominique G., Yeung, Clark Dustin T.
• Format: text
• Language: English
• Published: Animo Repository 2015
• Subjects: Electronic commerce; Service industries; Industrial Engineering
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7189
• Institution: De La Salle University

Service failures occur even in the best run service industry. These service failures tend to effect the satisfaction of the customers, which becomes one of the reasons for the customers to shift to another service provider. With that, an effective service recovery strategy plays a vital role in mitigating the negative effects of service failures. However, characteristics of service failures vary across different industries. Existing literature have mainly focused on service industries (e.g. hotel, restaurants, and healthcare industries) that exhibit direct interactions with the customers. E-tailing, on the other hand, is a service industry that has limited interactions with the customer. Thus, poses unique characteristics of service failure that requires a different approach of service recovery. The empirical research of this study focused on establishing the relationships of the service recovery factors such as: taxonomy and severity of service failure and service recovery justices in order to better understand how these factors interact with post recovery satisfaction and repurchase intentions. Both the taxonomy of service failures and service recovery strategies were generated from the focus group discussion conducted with an e-commerce company in the Philippines that handles over 50 e-tailing industries nationwide. After which, the data gathered from the focus group discussion was transcribed into qualitative data through the use of survey questionnaires. These survey questionnaires were given to the e-tailing customers and were used as part of the explorative study confirming the taxonomy and severity of service failures initially generated from the focus group discussion. Scenarios for the final survey were then constructed based on the findings in the explorative study and the final survey proper were executed afterwards. E-tailing customers were asked to answer the experimental scenario survey, together with a video enactment of each scenario in order to better convey the emotions and help the responden Statistical software such as structural equation modeling, design expert 9, and Minitab were used to valuate and to establish the aforementioned relationships. After thorough analysis, it was found that the three service recovery justices have positive effect on both post recovery satisfaction and repurchase intention. However, it was found out that procedural service recovery justice is only significant for customer services problems and delivery problems. On the other hand, distributive and interactional service recovery justices have significant positive effects on the post recovery satisfaction and repurchase intention in all taxonomies of service failure. This suggests that taxonomy of service failures plays an important role in terms of the optimal setting in service recovery strategies to vary across different taxonomy of service failure, furthermore, it was discovered that severity of service failure negatively impacts the post recovery satisfaction and repurchase intention of the customers for all taxonomies of service failure except for security problem. The severity of security problems does not play a significant role because the recovery must always be of high setting as the customer's trust and safety are deemed to be very fragile needs. For the output of the study, a service recovery decision matrix was developed to serve as a guide for several e-tailing companies in terms of how they can effectively execute service recovery strategies that could yield to better post recovery satisfaction and repurchase intention.