An Examination of the Means-End Model of Price, Quality and Value in the Service Industry

Abstract

The intangible nature of services often complicates the marketing process. Many service industries such as the hotel industry face the difficult task of managing the temporal demand for their products. Also, the supply of the various services has outpaced the demand over the last decade. Given this level of competition, service firms must decided whether to focus on obtaining a sustainable competitive advantage through offering lower prices or providing high quality and/or a unique product. Zeithaml (1988) presented a means-end model illustrating consumer perceptions of the proposed relationships between price, quality, and value. Perceived quality and perceived price were proposed to have a combined effect on perceived value, and the consumer’s decision to purchase a product was proposed to be directly related to his/her evaluation of value. Other authors have focused on the relationship between price and quality, and many authors have studied the determinants of service quality and satisfaction (e.g., SERVQUAL and SERVPERF). Script theory provides the most practical approach to understanding consumer perceptions of services and the decision-making process. A general description of script theory is that a consumer’s satisfaction with a service is related to a confirmation or disconfirmation of expectations. The purpose of this paper is to empirically test a simplified version of the Zeithaml model to evaluated the importance of perceived value in determining customer satisfaction.

Keywords

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.