Special Issue INTERNATIONAL JOURNAL OF HUMANITIES AND

January 2016 CULTURAL STUDIES ISSN 2356-5926

Explanation of the Role of Customer Participation in Production on

Customer's Compatibility and Satisfaction

Shahrokh Rajati1 and Faramarz Nikseresht2

1
MBA student of Management and Accounting Faculty, Semnan Branch, Islamic Azad
University, Semnan, Iran
2
Assistant Professor of Management and Accounting Faculty, Semnan Branch, Islamic Azad
University, Semnan, Iran

Abstract

The researches on the relationship marketing concepts has an exponential growth, however it
has not been paid any attention to the compatibility issue and understanding between
customers and staff who are directly in contact with customers, especially in the field of
banking services in developing and traditional economies, yet.
The aim of this study is investigating the role of customer participation in the production
through the relationship benefits caused by long-term relationships between employee and
customer and its effect on compatibility and customer satisfaction among the customers of
Parsian Bank. This is a descriptive and study done by survey method. The population are the
customers of Parsian bank branches in Tehran and the data collection method is
questionnaire (n=386). The conceptual model and hypothesis of the research has been
studied through LISREL software program and structural equations modeling technique. The
results show that the customer participation in production has a positive significant effect on
compatibility and it has a significant effect on customer satisfaction. Also the results of the
research indicate that all three variables: confidence, social and special treatment benefits
have an effect on customer participation, but among them, the effect of social benefit,
confidence benefit and at last special treatment benefit respectively, has the most effect on the
customer participation variable.

Keywords: Relationship Benefit, Customer Participation, Customer Compatibility,

Customer Satisfaction.

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Introduction
Attracting the customer satisfaction is the most important tasks and priorities of the
companies’ management and one of the most important requirements of the companies and
organizations’ progress. Today, the definition of customer is fundamentally different from
what existed in the past. This means that the customer is not only the buyer of a product or
service, but also he is an active and effective member in all business activities. During the
past ten decades, the service organizations have shown more tend to encourage customers to
participate in the process of production and services. The banking industry has not been an
exception and with modern ways including the use of ATMs and Internet banking has been
attracting the customer participation. With this process, for sure customers are an integral part
of the service provider system (Lang Nik-Hal et al., 2000). This study aims to study the
customer participation with relationship benefits on compatibility and customer satisfaction
in the case of banking presence extract the new strategies for banks to achieve competitive
advantage and become the first choice of the customers.

Review of Literature
Customer participation:
Participation in production is a joint activity in which the service provider and the customer
produce the service. The quality of the final service in this joint activity is depending on the
nature of the interaction and quality of communication between both parties. In fact,
participation in production is an interaction in which the parties offer different sets of abilities
and capabilities and coordination between these sets have effects on the final output and
condition of participation in the production (Kuusisto & Viljama, 2004). Recent researches in
organizational behavior and marketing pointed out that the area of manufacturing and
services to a greater extent is dependent on the field of physical strength and intellectual
clients. For example, patients who are doctors’ clients help doctors to diagnose their illnesses
with the proper description of their symptoms. Institutes of health advisory services, financial
and insurance, customer and employee information and prepared documents help the
consultant and employees to provide service more effectively. But it is not compatible with
the nature of most manufacturing operations and customers may be able to have impact in
certain cases of product design. In general, customers in manufacturing systems to customers,
have less opportunity to apply knowledge and labor in the production process (Bowen &
Jones, 1986). Despite the large amount of studies about the participation in the production, a
few of them particularly have focused on the relationship between this concept and customer
satisfaction. However, some researchers analyzed the effect of the quality of customer
participation (Kelley et al 1990, Lengnick-Hall, 1996, Bettencourt, 1997), customer
satisfaction and value creation (Chu & Jillian, 2010). Also Wu & Wang (2009), proposed to
introduce a model of mediated participation in social benefits, the benefits of the trust and
how to deal with customer has a positive effect on loyalty in institutional investors.
Generally, three types of interaction are expressed in the service delivery process for
customers as follows: 1. the customer interaction with service provider; 2. the customer
interaction with the server environment; 3. the customer interaction with other customers
(Moore, et al, 2005).

Compatibility
In advertising terms, compatibility is studied in terms of sales or service relationship (Weitz,
et al, 2007). But the precise definition of compatibility is not clearly specified. The major part

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of the definition indicates that compatibility is a good service experience (Weitz, et al, 1992).
Carry et al (2005) have defined compatibility as a relationship quality that the characteristic
are satisfactory relations and mutual understanding. People feel the adaptability when they
have "fit" experience in dealing with specific individual (Tickle-Degnen & Rosenthal, 1990).
Understanding generally takes shape from the interaction between employees and customers
one or several times (Hennig-Thurau, 2006) and it is an indicator to determine the quality of
relationship (Gremler and Goiner, 2000). Compatibility can be known as benefits of long-
term customer relationships with service providers (Chung and Chen, 2007). In services term,
compatibility represents "a customer's perception of delightfully interactive with service
provider that is shaped by the interaction between two" (Gremler and Goiner, 2000). They
believe that the understanding is made of two important aspects of the “enjoyable
interactions” and "personal communication". A personal relationship aspect is showing a link
between the two sides that shows a strong sense of dependence and enjoyable interactions is
one of the effective criteria for evaluating the real interaction between the parties and
describes the positive interaction (Gremler and Goiner, 2000).

Customer Satisfaction
In recent years the importance of customer satisfaction has become an important issue for
marketing managers (Benet, 2004). All executives believe that customer satisfaction is a key
factor in organizational success and perhaps most important task is attracting customer
satisfaction. The importance of customer satisfaction for the organization is to the extent that
a satisfied customer is a positive asset because through reuse serving, repurchase products or
word of mouth leads to increased organization profit (Gilbert, 2000).

The definition of customer satisfaction

A customer satisfaction is a feeling or attitude of a customer towards a product or service
after its use (Jamal and Naser, 2002). Cutler (2011) defines the customer satisfaction as a
degree that actual performance of a company meet customer expectations. Cutler defined
satisfaction as: satisfaction is pleasant or unpleasant feelings of a person that compared the
mental performance with expectations. According to Cutler, if the company meets the
customer expectations, customer is feeling satisfaction otherwise dissatisfaction. Customer
satisfaction is an emotional response which is achieved from the interaction with the
customer, supplier or product consumption. In fact satisfaction is achieved from different
understanding between customer expectations and actual performance of the product, or
organization (Saghayi and Kavousi, 2005). ISO 9000 (version 2000) definition of satisfaction
is: "the customer understanding from the degree of fulfilling their requirements.” Pafrat and
Sebastian have suggested, the main goal of customer satisfaction is that the organization is
receiving feedback from customers, activities and resources to lead the way to achieve the
important aim ultimately which is customer retention and long-term relationship with him
(Saghayi and Kavousi, 2005). As a result, any organization must consider the customer needs
and satisfaction more than before for their survival in the third millennium.
Customer satisfaction and loyalty (Haverila, 2011; Kelly & Turley, 2001; Matzler et al, 2007)
recommending others (Jamal and Naser, 2002) and profitability of the company (Bernhardt et
al, 2000; Chi & Gursoy, 2009) is effective. Recent researches have emphasized on the field of
relationship marketing to influence employee behavior skills and on customer satisfaction
(Biedenbach et al, 2011; Ranjbaran and Barari, 2009; Venus and Zohouri, 2011).

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Beneficial Relationship
The beneficial relationship can be defined as customer benefits of long-term relationships
with service providers apart from the main characteristics of the product (Chung and Chen,
2007; Colgate et al, 2005; Goiner et al , 1998; Kinard and Kopela, 2006 ). In fact, these
benefits are the result of customer involvement in long-term relationships with service
provider. The effect of these benefits will make customers more loyal to their service
providers (Molina, 2007). And long-term personal relationships between employees and
customers are of great importance and could affect customer evaluation of goods and
received services (Beatty et al, 1996). In fact making strong relationships with customers is
one of the competitive advantages (Goiner, Gremler and Beatner, 1998). In service
businesses strong relationships with customers is of great importance, because service
businesses are inherently focused on interpersonal relations and there are relatively little
evidence of objective indicators for assessing service quality (Serpil, 1990). This issue in the
service sector that requires interaction between customers and employees is more important
(Gremler et al, 2001). Several studies have been conducted to identify the foundations of
relational benefits. Reynold and Betty (1999) in their study identified two categories of
advantages in the relationship between seller and buyer that includes the benefits of relational
and functional benefits. Goiner et al (1998) in their study to identify the benefits of a
relationship of long-term relationships between customers and companies achieved into three
benefit categories: The advantage of Confidence benefit (decrease anxiety, understanding
what should be expected from his relations), social benefits (the development of personal and
intimate relationship with the seller) and the special treatment benefits (proportionality
services, faster and with discounts price). By reviewing literature of these studies on
relationship benefits it was found that Goinr et al model (1998) is more important. Therefore
in this study for relationship benefits, we used the three presented foundations of their model.

Method
Type of Research
This is a descriptive research that is done in a survey method; it studies the effect of customer
participation in production by Beneficial Relationship on the consistency and customer
satisfaction among the customers of Parsian Bank in Tehran.

Conceptual Model of Research

Conceptual model of research is derived from the article of Fatima et al. (2013); we will
study and explain the present relationship among them in following.

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Social benefits

Confidence Special Treatment

benefits benefits
H4
H3
H5

Customer
participatio
n
H1 H2

Compatibility H7 Satisfaction
‫مشتری‬

Fig 1-3: Conceptual Model of Research

The research Hypotheses

Hypothesis 1: Customer participation has a positive effect on Compatibility.
Hypothesis 2: Customer participation has a positive effect on customer satisfaction.
Hypothesis 3: presenting the confidence benefit by service provider has a positive effect on
customer participation.
Hypothesis 4: presenting the social benefit by service provider has a positive effect on
customer participation.
Hypothesis 5: presenting the special treatment benefits has a positive effect on customer
participation.
Hypothesis 6: the effect of special treatment benefits is more than the effect of confidence
benefits and the effect of confidence benefits is more than the effect of social benefits.
Hypothesis 7: compatibility has a positive effect on the customer satisfaction.

The Population, Sample and Sampling Method

Population of this study is the customers of Parsian Bank in Tehran. Due to the non-limitation
of population, the following equation has been used to obtain the sample.
Z   P( P  1)
2

n 2
d2

n = the minimum sample size in the bank

Z
2 = 95% of confidence level=1.96

d = the level of permitted error (0.05)

P= 0.5
In this study, the simple random sampling method is used to achieve the desired sample size.

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Data Collection Tools

A questionnaire is used to collect the required data. The questionnaire consists of two parts,
general questions (first part) and specific questions (second part). The second part is related
to the questions of the research variables that is consisted of 26 questions including 4
questions about confidence benefits variable, 4 questions about social benefits variable, 3
questions about special treatment benefits variable, 3 questions about the customer
participation variable, 7 questions about compatibility variable and 5 questions about the
customer satisfaction variable. The five-item Likert Scale is used as the scale of measuring
the items.

Assessment of Reliability and Validity

Cronbach's alpha coefficient was used to measure the reliability of questionnaire. The results
are presented in Table (1-3).

Variables Number of the questions Cronbach's alpha

Confidence benefits 4 0.749
Social benefits 4 0.915
Special treatment benefits 3 0.825
Customer participation 3 0.714
Compatibility 7 0.909
Satisfaction 5 0.912
Table (3-1) Cronbach's alpha coefficient for the questionnaire

In this study, it can be claimed that the validity of data collection tools has been favorable due
to the fact that alpha coefficient of all variables is greater than 70 percent.

Analyzing of Findings
According to the results, in terms of gender and among 384 selected samples, 49.5 percent of
respondents are male and 50.5 percent of them are female. In terms of age, 1 percent of
respondents are younger than 20 years old, 20.5% in the range of 21-30 years old, 48.3
percent in the range of 31-40 years old and 17.7 percent are in the range of 41-50 years old,
10.6 percent in the range of 51-60 years old and 1.8 percent of them are older than 60 years
old. In terms of education level, 22.1 percent of respondents have diploma degree, 11.9
percent of them have associate's degree, 36.9 percent have bachelor's degree and 26.7 percent
of them have master's degree or higher. In terms of job area, 38.9 percent of respondents
work in state-owned part, 22.2 percent of them work in private part, 19 percent have their
own business, 11 percent are housekeeper, 3.5 percent are retired, 1.2 percent are jobless, 3.7
are studying and 0.6 are working in the other parts.
The structural equation modeling technique and software LISREL are used to study the
conceptual model of the study. The results of the model are presented in Table (1-4). It
should be noted that the standard coefficient among the variables of the study show the
intensity and direction of the relationship among variables. But when these coefficients are
significant, the significant coefficients corresponding to each relationship are placed outside
of the range of +1.96 and -1.96.

Number of hypothesis Standardized A significant Accept or reject

theory coefficients coefficient (t) the hypothesis

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First Self-emotion accept

assessment has 0.93 5.94
an effect on
employees'
turnover
intentions.
Second Effect of Rejection
Customer 0.25 1.07
participation on
customer
satisfaction
Third Effect of accept
confidence 0.35 4.80
benefits on
Customer
participation
Forth Effect of social accept
benefits on 0.52
Customer 4.46
participation
Fifth Effect of special
treatment 0.22 0.61 accept
benefits on
Customer
participation
Sixth The effect Rejection
Priority to - -
special treatment
benefits,
confidence
benefits, social
benefits
Seventh Effect of
compatibility on 0.46 2.04
customer accept
satisfaction
Table (1-4) the results of the research hypothesis

According to the above table, it can be concluded that the second hypothesis (the effect of
participation on the customer satisfaction) is rejected. Also the sixth hypothesis of the
research that specifies the importance degree of each relationship benefit is rejected. The
results of conceptual model of research are presented in figure 1-4.

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Confidence
Compatibility

0.35 0.93

Community 0.52 Participation 0.46

0.25 Satisfaction
0.22
Special
treatment

Fig 1-4: the results of conceptual model of research

Conclusion
This study studies the role of customer participation in compatibility and satisfaction among
the customers of Parsian Bank. The results of the research indicate that customer participation
in the production has a significant effect on compatibility, but it does not show a significant
effect on customer satisfaction. Also the three foundations of relationship benefits have an
effect on customer participation in the production, but the social benefits, then the confidence
benefit and finally the special treatment benefits have the greatest effect on the customer
participation. The Table 5-1 shows the importance of each relationship benefit in the different
communities. As it is seen in the table, the importance degree of relationship benefits is the
same in Iran and Bangladesh and differs from Western society. More importance of social
benefits compared to two other benefits could indicate a "social norm" in Iranian culture.
Peterson and Smith (2001) after doing the researches in Thailand found that the results had
been inconsistent with the results of basic research done by Guiner and et al. (1998).
Henig- Tora et al (2002) also confirmed that among the three major benefits, the confidence
benefit has the strongest effect. This suggests that the relationship benefits have significant
effects on multiple types of related results.
studies place findings
Guiner et al (1998) United State of America Special Treatment benefit<
social benefit< confidence
benefit
Peterson and Smith (2001) Thailand confidence benefit< social
benefit< Special Treatment
benefit
Henig-Tura (2002) United State of America Special Treatment benefit<
social benefit <confidence
benefit
Fatima et al. (2013) Bangladesh Special Treatment
benefit<confidence
benefit<social benefit
Present Study Iran Special Treatment
benefit<confidence
benefit<social benefit

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Participation in production has increased the company's ability to obtain the information and
customers’ knowledge and it enables customers to adapt to today's complex and dynamic
environments (Voo and Vang, 2009). On the other hand, the compatibility is formed within
one or more interactions between employee and customer and it will be effective the
agreement on customer satisfaction. As stated in the second hypothesis, it can be concluded
that the compatibility plays a mediator role in the transfer of customer participation effect in
production on customer satisfaction. So Parsian Bank managers must raise the level of
participation to increase compatibility.
It should be noted that any scientific research has limitations and this study is not an
exception. In the present study, all customers are studied in general.

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