Industrial Marketing Management xxx (xxxx) xxx–xxx

Contents lists available at ScienceDirect

Industrial Marketing Management

journal homepage: www.elsevier.com/locate/indmarman

Service quality versus service experience: An empirical examination of the

consequential effects in B2B services
⁎,1
Subhadip Roya, , S. Sreejeshb,2, Sandhya Bhatiac,3
a
Marketing Area, Indian Institute of Management Ahmedabad, Ahmedabad 380015, Gujarat, India
b
School of Management Studies, Cochin University of Science and Technology, Kochi 682 022, Kerala, India
c
Finance and Accounting Area, Indian Institute of Management Udaipur, Udaipur 313001, Rajasthan, India

A R T I C LE I N FO A B S T R A C T

Keywords: The present study investigates the role of service experience in B2B services vis-a-vis service quality. In parti-
Service experience cular, the study addresses the question: how do the relative effects of service quality versus service experience in
Service quality a B2B setting influence the immediate (satisfaction and perceived value) and subsequent customer outcomes
Satisfaction (loyalty and word of mouth)? To this end, three surveys were conducted (with a combined sample size of 626) of
Loyalty
customers of financial consultancy services. The collected data is subjected to factor analysis and structural
Perceived value
Structural equation modeling
equation modeling to test the study hypotheses. Major findings indicate a stronger influence of service experi-
ence on satisfaction and perceived value as compared to service quality. Results also show a stronger indirect
effect of service experience on loyalty and word of mouth (via satisfaction) compared to service quality. In
addition, service experience was found to influence both perceived utilitarian and hedonic value derived from
service while service quality was found to influence only utilitarian value. The findings underline the importance
of service experience in a B2B setup.

1. Introduction This brings out the fundamental difference between service experience
and service quality. While service quality is more related to rational
The concepts of service quality and service experience have been ‘judgments' (Parasuraman et al., 1985), service experience is about
discussed as important variables that create a competitive advantage emotional ‘internal responses' (Klaus & Maklan, 2012). For example, the
for a service provider (e.g., Greenwell, Lee, & Naeger, 2007; Hollyoake, evaluation of whether the service is delivered on time would be a
2009; Maklan & Klaus, 2011; Millard, 2006; O'Donohoe & Turley, 2007; measure of service quality, while the way the representative behaved
Sandström, Edvardsson, Kristensson, & Magnusson, 2008). While ser- with the client (e.g., was understanding and flexible) would be a
vice quality is conceptualized ‘as the customers’ overall judgment or measure of experience.
attitude about the quality of the service’ (Parasuraman, Zeithaml, & Both these two concepts have been extensively researched in the
Berry, 1985), service experience is conceptualized as “customers' internal domain of business to consumer (B2C) marketing (for service quality,
and subjective response to any direct or indirect interaction with the service refer to studies such as Bloemer, De Ruyter, & Wetzels, 1999;
provider across different touchpoints” (Meyer & Schwager, 2007; p. 117). Parasuraman & Grewal, 2000; Kang & James, 2004; Chang, 2008), (for

⁎
Corresponding author.
E-mail addresses: [email protected] (S. Roy), [email protected] (S. S.), [email protected] (S. Bhatia).
1
Subhadip Roy is Associate Professor of Marketing at the Indian Institute of Management Ahmedabad. His research interests include services marketing, B2B brand
management and advertising. His publications have appeared in Marketing Letters, Psychology and Marketing, Journal of Marketing Communications among others. He is
also an avid case writer and his teaching cases have appeared in Ivey Case Collection and The Case Journal.
2
Sreejesh S is Assistant Professor of Quantitative Methods & Marketing at the School of Management Studies, Cochin University of Science and Technology, Kochi,
India. His main research interests include brand management, services marketing, online marketing & advertising. His publications have appeared in Journal of Travel
and Tourism Marketing, Internet Research, Journal of Product and Brand Management, British Food Journal, Management Research Review, International Journal of Bank
Marketing, Journal of Hospitality and Tourism Technology, among others. He has also authored books of international repute with Pearson India and Springer
International.
3
Sandhya Bhatia is qualified Chartered Accountant with Master degrees in Commerce and Management. She earned her PhD in commerce from Mohanlal Sukhadia
University, Udaipur. Her research interest is in the area of financial marketing, financial disclosures, corporate governance and audit quality. Prior to joining
academia, she was engaged as practicing chartered accountant. She also has experience of serving as director on corporate boards.

https://doi.org/10.1016/j.indmarman.2019.02.017
Received 17 February 2017; Received in revised form 21 February 2019; Accepted 21 February 2019
0019-8501/ © 2019 Elsevier Inc. All rights reserved.

Please cite this article as: Subhadip Roy, S.Sreejesh and Sandhya Bhatia, Industrial Marketing Management,
https://doi.org/10.1016/j.indmarman.2019.02.017
S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

service experience, refer to studies such as: Carú & Cova, 2005; Berry & (with sample sizes of 176, 200 and 250) of customers of financial
Carbone, 2007; Bolton, Lemon, & Bramlett, 2006; Greenwell et al., consultancy services and apply factor analysis and structural equation
2007; Millard, 2006; O'Donohoe & Turley, 2007). However, the domain modeling to test the study hypotheses.
of business to business (B2B) marketing shows a dominance of studies The rest of the paper is organized as follows: in Section 2, we pro-
in service quality e.g., Brown & Swartz, 1989; Swartz & Brown, 1989; vide a review of the literature on service quality, service experience and
Moore & Schlegelmilch, 1994; Zeng, Yang, Li, & Fam, 2011; their consequences followed by the theoretical background of our study
Sarapaivanich & Patterson, 2015; Ng, Plewa, & Sweeney, 2016; in Section 3. This leads to the formulation of the study hypotheses in
Pomirleanu, Mariadoss, & Chennamaneni, 2016; Casidy & Nyadzayo, Section 4. Following this, we outline the study methodology in detail
2017) and a much less emphasis on service experience (Biedenbach & (Section 5). In Section 6, we discuss the results of the first two surveys
Marell, 2010). followed by the rationale, methodology and findings from the addi-
Interestingly enough, a keyword search using “service experience” tional study in Sections 7 and 8. The theoretical and managerial im-
leads to only a few papers that discuss the concept of service experience plications are discussed in Sections 9 and 10 respectively. Finally, we
(and/or its consequences) in the B2B setting. Of these papers, some conclude the study in Section 11 with the limitations and scope.
have discussed the concept of service experience at the conceptual level
(e.g., Helkkula, 2011); while others have explored the consequences of 2. Literature review
service experience in the B2B domain (e.g., Biedenbach & Marell,
2010). However, none of these studies has comparatively explored In addition to the arguments presented in the introduction, we
service quality and service experience in the B2B context. This raises presume that service quality and service experience are developed
the relevance of our study. Researchers emphasize that the intangible through different sources in a B2B service setting. Service quality is
nature of services makes it difficult for the service receiver to evaluate generated through the perception or evaluation of the quality of service
the service based solely on quality aspects in B2B setting (Geigenmüller attributes that are under control of the B2B service provider that is
& Bettis-Outland, 2012), as the experience generated by the service predominantly rational (Helkkula, 2011; Lemke, Clark, & Wilson,
provider may be an important component of all customer-centric 2011). On the contrary, service experience is the psychological outcome
business (Lusch & Vargo, 2006; Schembri, 2006; Vargo & Lusch, 2008). that is generated through the activities and interactions of the B2B
In addition, there may exist fundamental differences between B2C and service provider with the buyer that is predominantly emotional
B2B services (such as the level of complexity and the number of deci- (Helkkula, 2011; Lemke et al., 2011). Hence, the need to study the
sion makers involved) concerning the recipient of the service and the consequential effects of these two in a B2B service setting on buyer
mode of interaction between the service provider and the receiver. It outcomes (and the presence of differences, if any). Thus, in the current
could also be argued that service quality pertains to non-experiential or study, we reviewed the extant literature on service quality, service
rational aspects of services that are related to functional utility (Batra & experience, satisfaction, perceived value, positive WOM, and customer
Ahtola, 1991; Stock, 2011), for example, maintaining consistency in loyalty as part of the conceptual model development. In B2B service
expected standards. On the other hand, service experience corresponds setting, many of these constructs are under-researched (Biedenbach &
to experiential or emotional aspects that are related to hedonic utility Marell, 2010). In such instances, we inferred the rationale given by
(Batra & Ahtola, 1991; Strahilevitz & Myers, 1998; Tontini, Søilen, & existing literature in B2C and applied the same to B2B settings. In the
Silveira, 2013). following subsections, we provide a brief overview of service quality
To summarize the issues, designing and delivering services that and its dimensions in the B2B domain followed by service experience
match customers' specific needs and is substantially differentiated from and the debate in B2B service quality versus service experience. We
the competitors' through experiential service offerings may work as a follow this up with the theory to substantiate our hypotheses devel-
critical touch point for B2B services, and may be different from the way opment section with arguments on the importance of service quality
it manifests in B2C (Marquardt, Golicic, & Davis, 2011). As per Hague and experience and their relationships to perceived value, satisfaction,
and Hague (2018), most B2B firms are good at quality control, manu- customer loyalty, and positive WOM.
facturing and logistics but not at managing customer emotions and
experience. The service interaction will be more profound and involve 2.1. Service quality
key decision makers in the service relationship that contributes to the
B2B customers' evaluation of the concerned service including customer The concept of service quality has its origins in the early work on
experiences (Biedenbach & Marell, 2010). Hence, a study that examines services marketing such as Sasser Jr., Paul Olsen, and Daryl Wyckoff
the consequences of service experience and service quality (at the same (1978); Gronroos (1978); Lehtinen and Lehtinen (1982); Lewis and
time) has the potential to point out the relative effectiveness/im- Booms (1983). The conceptualization of service quality has accepted
portance of one over another (if any) while designing and delivering both tangible and easily measurable aspects of quality such as defection
B2B services (rather than just drawing inferences from B2C services). rate (Garvin, 1983) and intangible aspects such as heterogeneity among
Thereby, we investigate the effects of service quality and service service providers (Zeithaml, 1981). In a B2C service setting, the most
experience jointly on their consequent outcomes such as satisfaction, popular conceptualization of perceived service quality, the SERVQUAL
perceived value (utilitarian and hedonic), and subsequent behavior was proposed by Parasuraman, Zeithaml, and Berry (1988). Service
such as loyalty and word of mouth. The understanding of the relative quality describes customers' overall judgment or attitude about the
effects of service quality and service experience on the immediate (such quality of the service and its superiority (Parasuraman et al., 1985).
as perceived value and satisfaction) and subsequent (such as loyalty) This judgment arises when customers compare their anticipation of the
customer outcomes may provide guidance on where to focus efforts to service firm's offering with the actual or received performance of the
build favorable customer outcomes. In the course of the same, we ad- services offered (Parasuraman et al., 1985, 1988; Parasuraman, Berry,
dress the call for research that explores additional constructs beyond & Zeithaml, 1991). From the measurement perspective, service quality
service quality that may influence customer attitudes and behavior in is modeled as a multidimensional construct, comprising of the dimen-
the B2B service setting (e.g., Geigenmüller & Bettis-Outland, 2012. sions: reliability, responsiveness, tangibility, assurance, and empathy
Based on the arguments discussed, the present research poses an (Parasuraman et al., 1988). Later, Parasuraman et al. (1991) revised the
important research question: What are the differential effects of service SERVQUAL scale covering the five dimensions of service quality. Since
quality and service experience on the immediate (satisfaction and then, the modified version of the scale has been used extensively across
perceived value) and subsequent customer outcomes (loyalty and word a wide range of service settings to capture service quality (Ladhari,
of mouth) of a B2B customer? To this end, we conduct three surveys 2008).

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S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

2.2. Service quality dimensions in the B2B domain reviews, and so forth” (Meyer & Schwager, 2007, p. 117). Further, Payne,
Storbacka, Frow, and Knox (2009) incorporated communication, usage,
Researchers in the B2C domain (e.g., Chumpitaz Caceres & and service encounters as the dimensions of service experience.
Paparoidamis, 2007; Grönroos, 1984; Zeithaml, Berry, & Parasuraman, In B2B service setting, the service experience received by a customer
1996) have motivated their B2B counterparts in the early attempts to is interpreted in terms of the total interaction between the customer and
conceptualize B2B service. These studies captured the service quality of the service provider. For example, Biedenbach and Marell (2010) stated
business service providers across a wide range of businesses, such as that service experience is created through the customers' direct inter-
audit (De Ruyter & Wetzels, 1999), information systems (Pitt, Watson, action with the service provider. This interaction is expected to con-
& Kavan, 1995), manufacturing (Zeithaml et al., 1996), distribution tribute to the customers' evaluation of the received service and service
(Bienstock, Mentzer, & Bird, 1997), and logistics (Mentzer, Flint, & choice decisions. Although, researchers support the critical role of
Hult, 2001). Besides, researchers developed measurement instruments service experience in influencing service design and service delivery,
to capture service quality specific to the B2B setting. The most promi- more understanding and exploration to expand this area is needed
nent ones include the three-dimensional PDSQ (Bienstock et al., 1997), (Grewal, Levy, & Kumar, 2009; Payne, Storbacka, & Frow, 2008;
four-dimensional INDSERV (Gounaris, 2005), six-dimensional PSQ Verhoef et al., 2009; Voss, Roth, & Chase, 2008), specifically in B2B
(Woo & Ennew, 2005), and nine-dimensional AUDITQUAL (Duff, 2004) service setting (Biedenbach & Marell, 2010).
scales. In these attempts, the most noticed B2B service quality mea-
surement was the INDSERV by Gounaris (2005). The other three suffer 2.4. B2B service quality versus service experience
from contextual boundaries. The PDSQ is more specific to physical
distribution services; the PSQ is built only on the interactions/ex- The extant literature in service marketing emphasizes that service
changes between the service provider and customer; the AUDITQUAL is experience is different from service quality in certain aspects. First,
specific to financial/auditing services. The INDSERV scale is more service quality is developed through consumers' cognitive evaluation of
generic and based on the idea that B2B service quality is a higher order service attributes that is under the control of the service provider
construct comprising of four first-order dimensions. These dimensions (Altunel & Erkut, 2015). However, the service experience is the psy-
are (1) potential quality (2) hard quality (3) soft quality, and (4) output chological outcome that develops through consumers' affective re-
quality. According to Gounaris (2005), potential quality denotes the sponses to their desired social-psychological benefit (Chen & Chen,
search attributes that the B2B customers use to evaluate the service 2010). For example, a service provider high on service quality would
providers' ability to complete the service before the service interaction deliver consistent performance across time, irrespective of whether a
or the actual service delivery. The hard and soft service quality di- particular employee would deal with a particular client or more. On the
mensions refer to the quality evaluation by the B2B customer during the other hand, a service provider high on service experience would ded-
service delivery process. Hard quality denotes what is being performed icate a specific employee to a specific client so that the employee builds
during the service delivery process, and soft quality dimension denotes a relationship with the client in the long run. Second, the measurement
how the actual service is being delivered (Gounaris, 2005). The last of service quality is very specific and objective concerning the service
dimension, output quality pertains to the B2B customers' evaluation of attributes, and its benefits are mostly functional. On the contrary,
the end-results concerning the hard and soft quality service delivery measurement of service experience is very subjective, its scope is very
parameters (Gounaris, 2005; Szmigin, 1993). The INDSERV con- generic, and its benefit is very experiential or symbolic (Otto & Ritchie,
ceptualization is considered as unique as its dimensions help the mar- 1996). Thus, while service quality would be evaluated on quantitative
keters/researchers to capture divergent service quality aspects across a parameters such as time and money saved, service experience would be
broad range of B2B services (Gounaris, 2005). In the current study, we evaluated on qualitative parameters such as peace of mind in doing
presume that all these dimensions together contribute to the industrial business and level of comfort while talking to a service representative.
customers' perception of service quality. Third, service quality evaluations are made during the service en-
counter or just after that. However, service experience may precede the
2.3. Service experience service encounter and continue after it (Payne et al., 2008). Fourth, the
service quality perceptions are transaction specific, and may not pro-
Several researchers mentioned the concept of service experience in vide benefits to the service provider for a longer time-period, i.e., the
the past either directly or indirectly (e.g., Arnould & Price, 1993; Berry customer's perception may vary as the journey is made (Schembri,
& Carbone, 2007; Bolton et al., 2006; Carú & Cova, 2005; Greenwell 2006). However, a heightened level of service experience formation
et al., 2007; Holbrook & Hirschman, 1982; Millard, 2006; O'Donohoe & happens when the service provider understands the experience ex-
Turley, 2007; O'Loughlin & Szmigin, 2005; Rondeau, 2005). However, pectations of the customers and delivers the same at all the touch points
the construct lacks clarity in conceptualization (Helkkula, 2011). and levels of contact as the business relationship develops (Hollyoake,
Helkkula (2011) attributed the lack of conceptual clarity to the focused 2009). Thus, service quality offers a solution to the customer while
attention of the existing studies into one of the three different and service experiences offer a relation. In short, customer service experi-
mutually exclusive characteristics of service experience, that are: phe- ence is more sustainable and persistent in all the sequences of the touch
nomenological (value discussion, service-dominant logic and inter- points of the service (Voss et al., 2008). Fifth, following the rationale
pretative consumer research), process-based (considering service as a given by Haley and Grant (2011), it can be argued that in a B2B setting,
process), and outcome-based (service experience as an antecedent of quality of service delivery can be defined according to the third-party
service-related outcomes). interests (e.g., governmental regulations, investor interests, etc.).
At a theoretical level, Edvardsson, Enquist, and Johnston (2005) Therefore, in many circumstances, service delivery happens to be based
contemplated service experience as a unique part of the service process. on third-party priorities. This creates difficulties to provide differ-
In this context, Meyer and Schwager (2007) mention that service ex- entiation in terms of service quality attributes. However, in the case of
perience creates the customers' cognitive, emotional, and behavioral service experience, there is less likelihood of third party involvement.
reactions towards the concerned service, leading to a heightened level This is because a B2B firm can create experiences at any of the touch
of memory. They further stated, “direct contact generally occurs in the points where the interaction between the service provider and the
course of purchase, use, and service and is usually initiated by the customer. customer occurs.
Indirect contact most often involves unplanned encounters with representa- In summary, quality perceptions cannot be developed in the same
tions of a company's products, services, or brands and takes the form of manner in B2B services, as it develops service experience because when
word-of-mouth recommendations or criticism, advertising, news reports, the transaction gets over, the effect of service quality on customers'

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S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

service-related evaluations and behavior will become negligent. In ad- to avoid unpleasurable ones” (Epstein, 2003, p. 159). Following the CEST
dition, customers' transaction related service quality expectations are framework in the context of B2B services, we argue that service quality-
almost static in a B2B setting (Schembri, 2006). Therefore, customers driven customer outcomes would fall in the rational system while the
will not use transaction related assessments as a significant component service experience-driven customer outcomes would fall in the experi-
of their service-related evaluation and behavior. Thus, the benefits ential system. Given the holistic nature of the experiential system
arising out of transaction-driven service quality perceptions would be driven information processing, we suggest that experience would lead
negligent. However, the service provider can create customer service to a stronger effect on the value and satisfaction derived from the ser-
interactions over and above the transaction related expectations, i.e., vice as compared to the quality.
through creating a unique service experience. This is because service In the following section, we elaborate the above-stated theoretical
experience is the outcome of many contributory events and a series of insights in a more detailed manner using prior literature that leads to
transactions and interactions between the parties involved (Hume, the hypotheses formulation of the study.
Mort, Liesch, & Winzar, 2006). All these together develop the custo-
mers' cognitive, emotional and behavioral responses, and result in 4. Hypothesis formulation
strong mental frames and memory (Edvardsson et al., 2005). Besides,
every emergent service experience is unique (Chandler & Lusch, 2015) In the literature review section, we presented the differences be-
as they occur “when the service comes alive” for each actor, irrespective tween service quality and service experience in the context of B2B
of where and when the parties are engaged (Sandström et al., 2008, p. services and raised the need to investigate both in the same study. In
120). Therefore, service experience is the outcome of the experience of this section, we build upon the discussions in the literature review and
service in its totality, a type of sensation, or knowledge attainment, that introduce the linkage between managerial processes in B2B service
arises from being engaged with many parties in a service at various purchase (and consumption) and service experience. The need for ser-
times and locations (Tseng, Qinhai, & Su, 1999). vice experience over service quality could be argued from the re-
lationship marketing perspective. Business to business relations be-
3. The theoretical paradigm of the study tween firms are close, complex and long term (Ford, 1980; Grönroos,
2004) and may take more time to develop (Palmatier, Scheer, Evans, &
In this research, we utilize two main theoretical streams that can be Arnold, 2008). Thereby, a service provider needs to create an effect that
used to explain the importance of service experience over service continues after the first service delivery is over. At the psychological
quality and its impact on customer-driven outcomes in B2B service level, the starting point would be the customer's perception of the firm's
settings. These streams are rooted in (a) Idiosyncratic Service willingness and ability to create, develop and sustain a genuine re-
Experience (ISE: Collier, Barnes, Abney, & Pelletier, 2018), and (b) lationship (Aurier & Séré de Lanauze, 2012). This perception could be
Cognitive-Experiential Self-Theory (CEST: Epstein, 2003). developed with the creation of an experience that touches the emo-
ISE explains the importance of developing a unique service experi- tional part of the customer's mind rather than the rational part. At the
ence for the customer in a service setting. These could be developed sociological level, B2B researchers have already noted the importance
through unexpected customer-service provider interactions that meet of social bonds between a service provider and a client (e.g., Candi &
the needs of the customer and creates value in an unexpected way Kahn, 2016; Prior, 2013). In terms of professional B2B services, a
(Collier et al., 2018). The unique customer experience formation is not customer may socially perceive a service in a particular way (and dif-
about merely meeting the expected needs of the customer, but also ferent from others) if the service provider is more engaged with the
about delivering the unexpected benefits beyond the customers' ex- client. The creation of a positive experience may boost the social value
pectations in a service encounter (Arnold, Reynolds, Ponder, & Lueg, of the service provider and subsequently lead to the development of
2005; Rust & Oliver, 2000). In addition, ISE explains that meeting the credibility (Arslanagic-Kalajdzic & Zabkar, 2017). At the cognitive
needs over and above the baseline expectations can create experiences level, B2B services involve ‘medium-high contact’ between the service
that the customers would like to share (Collier et al., 2018). Contrary to provider and the customer. This implies that service creation and de-
this, service quality is conceptualized as what the customers expect in livery would involve a high degree of ongoing interaction and inter-
the baseline service functionalities and its delivery is driven by meeting personal communication (Ng et al., 2016; Sarapaivanich & Patterson,
the customer expectations with regards to the basic service-related 2015). The success of such interactions may not only depend on the
benefits (Parasuraman et al., 1988). Researchers (e.g., Arnold et al., cognitive evaluation of the service provision (i.e., service quality), but
2005; Rust & Oliver, 2000) have supported that exceeding the custo- may also depend on the psychological evaluation that is developed
mer's expectations has very strong and long-lasting outcomes. Con- through intense client-employee interactions (Frey, Bayón, & Totzek,
sidering the uniqueness of B2B services as mentioned in the previous 2013; La, Patterson, & Styles, 2009). We argue that these interactions
sections, and following the ISE framework, we argue that service ex- would be more effective at the psychological level through the creation
perience may work as a relatively dominant force to create customer of service experience. In addition, the service provider selection and
related outcomes as compared to service quality. retention may be influenced by the manager of the client firm at times
The study also utilizes CEST to enunciate how individuals (here B2B for his/her personal benefits (a typical case of agency-manager con-
customers) follow the information processing systems in their decision flict). On the other hand, an internal agent who has positive affect to-
making process in the B2B setting. CEST states that humans operate by wards a service provider may reduce information asymmetry between
two fundamental information-processing systems that are parallel in the service provider and the receiving firm, thereby, facilitating the
nature: the rational system and the experiential system (Epstein, 2003). service transaction (Tate, Ellram, Bals, Hartmann, & Van der Valk,
In the rational system, individuals follow a cognitive way of informa- 2010). A positive and favorable experience may act as a catalyst in this
tion processing and use the rules of evidence and reasoning to analyze process (since the service provider interacts with a manager or group of
the concerned information. This rational system happens more con- managers representing the firm) and create an affect that may dissolve
sciously and requires good analytical, effortful and highly demanding the problems arising out of manager-agency conflicts and lead to a long
cognitive resources. The second system is more emotional where in- term relationship. The effect of this experience would be manifested
formation processing is rapid, effortless, holistic, associative, and is through the outcomes of service quality and experience (leading to the
driven by a minimum amount of cognitive resources (Epstein, Pacini, formulation of the study hypotheses) that we discuss next.
Denes-Raj, & Heier, 1996). According to CEST, “the experiential system The researchers support the notion that the intangible nature of
both influences and is influenced by affect…. and the experiential system services compared to goods makes the customer feel strenuous in as-
direct behavior in a manner anticipated to achieve pleasurable outcomes and sessing the service quality, more specifically in B2B services

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S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

(Geigenmüller & Bettis-Outland, 2012). The reason is that the B2B demand considerations, specifically on functional aspects. Therefore,
services represent high intangibility. In many cases, intensive interac- customers' transaction related service quality expectations are almost
tions happen between the customer and the service provider that result static. However, the service provider can create customer service in-
in highly customized services (Parasuraman, 1998). Researchers re- teractions over and above the transaction related expectations, i.e.,
iterated that B2B services contain higher levels of complexity since the through creating a unique service experience. In the present study, we
service is often customized to the specific needs of the customer expect that the additional benefit brought because the service experi-
(Jackson & Cooper, 1988) and the customers demand unique solutions ence may create a different magnitude of its effect, specifically on sa-
to particular problems or needs that are different from the standardized tisfaction development as compared to service quality. Thus, the
services offered by B2C service firms (Gounaris, 2005). Thus, con- quality-related evaluations would work as a necessary antecedent to
sumers' cognition focused service episodes and critical incidents driven overall satisfaction. However, in the B2B service setting, the transaction
service quality generate less differentiation of services (Edvardsson specific and functional attributes driven service quality of the service
et al., 2005). This is where an experience that is built after considering provider is not a significant concern for the customer as they are con-
the customers' emotional aspects of the service receipt would lead to sidered as necessary conditions (Geigenmüller & Bettis-Outland, 2012);
better customer attitudes and after effects (Hague & Hague, 2018). therefore, the service quality of the service provider would not work as
Hence, there is a need to investigate the emotion-laden service ex- a major differentiating factor.
perience through the lens of the customer (Edvardsson et al., 2005). Thus, while service quality generates comparative benchmark based
While emphasizing the importance of service experience, Berry, Wall, evaluation, the relationship-oriented service experience generates
and Carbone (2006) stated that “good customer experience is good cus- thoughts and feelings that occur through highly complex psychological,
tomer service, thus the customer experience is the service” (p. 1). In con- sociological, and cognitive experience driven interaction/s with the
tinuation of this argument, Hague and Hague (2018) have emphasized B2B service provider. Drawing inferences from CEST theory, we argue
the role of customer experience in generating left brain activated that service quality would use the rational system while service ex-
emotions that lead to higher customer satisfaction and subsequently to perience would use the experiential system. In addition, ISE theory
loyalty. suggests that the consequential effect of service experience would be
Hence, we propose the conceptual model to be tested in the study stronger. Hence, it is reasonable to presume that the resulting service
(Fig. 1). experience of the customer may generate stronger service outcomes
than the service quality evaluations in a B2B service setting. Based on
4.1. Service quality and service experience on customer satisfaction the discussion, service experience imparted during the service delivery
may predict customer satisfaction more strongly compared to service
Based on earlier arguments, we postulate that service quality and quality generated satisfaction in a B2B service setting. The stronger
service experience are likely to have differential consequences on the customer outcome of satisfaction would occur due to the non-quality
customers' service-related outcomes. This difference is because service related elements or experiential aspects of service experience than the
quality perceptions are developed and maintained differently in com- functional quality of the service. Thus, we hypothesize that:
parison to service experience. More precisely, in a B2B service setting, H1. Service quality perceptions and service experience will have a
when the transaction gets over, the effect of service quality on custo- positive impact on customers' satisfaction in the B2B services, but the
mers' service-related evaluations and behaviors will become negligent effect of service experience will be stronger than the effect of service
(Voorhees et al., 2017). In addition, in a B2B setting, customers' pur- quality (comparing paths 1 and 2 in Fig. 1).
chases of service are based on detailed prior evaluations and other

Potential
Quality

Hard Proc
Quality Service
Quality 4
Soft Proc Perceived
Quality
Value 5
Loyalty
2
Output
Quality 7
9
6
3
Peace of Positive
Mind WOM
Satisfaction 8
Mom of
Truth 1
Service
Experience
Outcome
Focus

Service
Experience

Fig. 1. The conceptual model: surveys 1 and 2.

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S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

4.2. Service quality and service experience on perceived value effect of service experience will be stronger than the effect of service
quality (comparing paths 3 and 4 in Fig. 1).
Studies in B2B marketing identified perceived value as an important
consequence of customer service interactions (e.g., La et al., 2009;
Lindgreen & Wynstra, 2005; Ulaga, 2001). Zeithaml (1988, p. 14) de- 4.3. Satisfaction on loyalty and WOM
fined perceived value as a “consumer's overall assessment of the utility of a
product (or service) based on perceptions of what is received and what is The extant literature supports the premise that customers who are
given.” The value perception develops through the customers' assess- highly satisfied with a firm are the most profitable customers; often buy
ment of receiving benefits and the sacrifices associated with the product more products or services and spread positive word-of-mouth (WOM),
or service. Contrary to this, Holbrook (1999) provided a comprehensive and show deep-rooted loyalty (Fornell, 1992; Parasuraman et al.,
conceptualization of value that is relativistic in nature (comparative, 1991). Of the mentioned, loyalty outcomes denote the extent to which
situation driven, personal), in which the customer develops preferences the customers involved with or receiving the service would be inter-
based on their experience of interacting with any product or service. ested in maintaining their relationships (Geyskens, Steenkamp, Scheer,
This mode of value perceptions may evolve from the consumption or & Kumar, 1996). Dick and Basu (1994, p. 99) define customer loyalty as
possession experience associated with the product or service. B2B ser- “the strength of the relationship between an individual's relative attitude and
vice researchers (e.g., Lindgreen, Hingley, Grant, & Morgan, 2012; repeat patronage……….mediated by social norms and situational factors”.
Lindgreen & Wynstra, 2005) support both these two perspectives on The ‘relative attitude’ could be satisfaction. This satisfaction driven
value creation. loyalty component also covers the normative aspects as well, i.e., the
At this point, we differentiate between satisfaction and perceived perceived level of obligation of the customer towards the supplier.
value. Hallowell (1996) suggest customer satisfaction to be the outcome Customer loyalty explained using relational exchange theory indicates
of a customer's perception of the value received, in which value equals that loyal customers would be oriented towards emotional content and
perceived service quality relative to price. Thereby, we argue that would be interested in protecting and recognizing the value of service
service quality leads to the perceived value of the same service whereas provider-customer relationship (Gilliland & Bello, 2002). The role of
service quality could independently create satisfaction if the customer emotions in the creation of satisfaction and loyalty is well researched in
expectations are confirmed. In support of this, Fornell, Johnson, consumer behavior literature (that we draw inferences from). Re-
Anderson, Cha, and Bryant (1996) stated: “the first determinant of overall searchers have observed the relation between emotions and satisfaction
customer satisfaction is perceived quality…… the second determinant of to be valence-congruent and further observed that positive emotions
overall customer satisfaction is perceived value” (p. 9). Thereby we infer may lead to satisfaction (Del Río-Lanza, Vázquez-Casielles, & Díaz-
that service quality would be an antecedent of value and satisfaction. Martín, 2009; Rychalski & Hudson, 2017). The service quality-service
The first source through which perceived value originates is from experience dichotomy in this context could be explained as ‘in some
the value of the goods and services and is non-cumulative. This ap- instances emotional desires dominate utilitarian motives in the choice
proach to customer value creation focuses on the customer evaluation of products’ (Hirschman & Holbrook, 1982, p. 94) that indicates a
of associated benefits from products or services that are related to stronger effect of service experience on satisfaction. To extend the ar-
product performance, product design, service quality, quality of staff gument emotional experiences based on relational exchanges between
involved in delivering the offering, and supplier image (Lindgreen & the service provider and the customer may lead to customers' cumula-
Wynstra, 2005). The second approach to value focuses on the value of tive evaluations of focal firms (e.g., Park, MacInnis, Priester,
relationships that is cumulative. According to this approach, the per- Eisingerich, & Iacobucci, 2010) and in the long term may lead to loyalty
ceived value is an aggregate of every exchange between the service (Ou & Verhoef, 2017). These loyal customers will subsequently elicit
provider and the customer (Hogan, 2001). The second approach con- behaviors such as repeat purchase and promotion of the company
siders value generation through customers' experience arising out of through positive word of mouth (Godin & Gladwell, 2001; Heskett,
each touchpoint of the service provider during the service relationship. Sasser, & Schlesinger, 1997).
(Ford, 2011; Grönroos, 2011; Vargo & Lusch, 2004). In addition, per- A relational outcome of loyalty formation involves an intimate ex-
ceived value in this approach is generated through “benefits/costs” change of information and emotion between the service provider and
evaluation of the experiences that customers collect throughout the the customer (Thomson, MacInnis, & Park, 2005). Thus, satisfaction can
interaction in the service relationship (Fiol, Pratt, & O'Connor, 2009). be considered as the initial stage of emotion development where the
Based on this rationale and inferring from CEST theory, we argue that customer begins to develop an affective and emotion-laden evaluation
the customers' service evaluation concerning the service quality would that in turn results in strong loyalty towards the B2B service provider.
be non-cumulative as they are based on static rational systems. Therefore, in a B2B setting, if satisfaction towards the B2B service
On the other hand, the experience-driven evaluation would be cu- provider were sustained over time, both partners in the relationship
mulative as they are based on dynamic experiential systems. While would be willing to communicate more frequently. Supporting this
pointing the importance of experience over service quality, Prahalad notion, Hirschman (1970) opined that the customers bound by senti-
and Ramaswamy (2004) stated that “value is now centered in the ex- ments of allegiance would be tied to their service providers for reasons
periences of consumers ….and not just embedded in products and services” beyond real economic advantages. This sense of allegiance makes the
(p. 137). In this context, Berry, Carbone, and Haeckel (2002) pointed customer difficult to leave a relationship (Hirschman, 1970). Thereby,
the importance of managing the total customer experience and stated we propose the next hypothesis as:
that the firms should recognize clues about experiences related to
H3. Service experience driven service satisfaction will have a stronger
functionality and clues about experiences related to emotions. Services
positive effect on loyalty in the B2B service setting, but service quality
that provide unique or memorable experiences may drive strong value
driven satisfaction will have a weaker positive effect on loyalty
perceptions (Edvardsson et al., 2005). Based on the discussion, we
(comparing paths 1 → 6 and 2 → 6 in Fig. 1).
argue that difference in priorities (service experience over service
quality) would create perceived value in varying strengths. Thereby in a In addition to customer loyalty, satisfaction is a good predictor of
B2B context, service experience would create stronger value percep- customers' positive WOM (Frenzen & Nakamoto, 1993; Gotlieb, Grewal,
tions compared to service quality. Thus, we hypothesize that: & Brown, 1994; Nyer, 1997). Swanson and Charlene Davis (2003) de-
fine positive WOM as “the customers' belief that he/she will discuss an
H2. Service quality perceptions and service experience will have a
incident with at least one person not directly related to the service encounter”
positive impact on customers' perceived value in B2B services, but the
(p. 207). While loyalty has been conceptualized as an antecedent of

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S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

WOM (Dick & Basu, 1994), satisfaction has been observed as a strong The hypothesized study framework integrating the study hypotheses
predictor of customers' positive WOM in B2B setting (Molinari, Abratt, is given in Fig. 1.
& Dion, 2008). Thus, the stronger form of experience-driven satisfaction
drives their behaviors, specifically “willingness to recommend” and “re- 5. Methodology
commendation to others”. This view is supported in past literature that
individual's degree of satisfaction or dissatisfaction driven by con- 5.1. Choice of the country
sumption experience is a crucial antecedent to word of mouth (e.g.,
Anderson, 1998; Arndt, 1967; Bitner, 1990; Reichheld & Sasser Jr, We selected India as the focal country for study. India has shown
1990). Considering the theoretical rationale mentioned in this section significant economic growth and held potential for the service sector
and the previous one, we hypothesize that: internally and externally (Clark & Rajaratnam, 1999; Javalgi & Steven
White, 2002). India experienced a shift from agriculture to the services
H4. Service experience driven service satisfaction will have a stronger
sector (Jain & Ninan, 2010) owing to its liberalization and economic
positive effect on positive WOM in the B2B service setting, but service
reforms (Jain & Ninan, 2010). The economic growth, in turn, has led to
quality driven satisfaction will have a weaker positive effect on positive
a rise in per capita income that has stimulated demand for non-dis-
WOM (comparing paths 1 → 8 and 2 → 8 in Fig. 1).
cretionary services as higher education, hospitality, and advanced
healthcare services (Ablett et al., 2007). Thereby, the choice of India as
4.4. Perceived value on loyalty and WOM the country of study in the present scenario is justified.

One of the essential objectives of B2B service is to create value for 5.2. Service selection pretest
both the parties engaged in service relationships. Researchers supported
that firms seeking new ways to develop experience driven service to We wanted to select a B2B service that ranks moderately on the
differentiate their market offering would be more successful in re- experiential element (i.e., not too high, nor too low). Thus, we con-
taining customers (Bendapudi & Leone, 2003; Shaw & Ivens, 2002). In a ducted two focused group discussions (FGD) with 20 respondents (10 in
B2B service setting, any service experience generating interaction cre- each discussion) belonging to different company types (including
ates value that would influence the customers to engage in a sustainable manufacturing, service, and selling) and having different profiles (such
relationship with the service provider (Anderson, 1995). Several studies as administrative officers, purchase managers, public relations execu-
supported the strong link between customers' perceived value and re- tives, accounts officers, etc.). All the selected participants were involved
lationship related outcomes, such as loyalty (Harris & Goode, 2004; in the selection and/or buying B2B services for their firms. The FGD
Parasuraman & Grewal, 2000), and positive WOM (Dubrovski, 2001; protocol comprised of their perceptions of experiential levels of various
Frenzen & Nakamoto, 1993). In addition to this, we presume that when B2B services, and the role of service experience in the B2B context. The
the customers receive unique and memorable service experience from most commonly mentioned service that was moderately ranked on the
the B2B service provider, it will generate favorable value perceptions. experiential element was financial services such as services of
These value perceptions would drive strong informal communication Chartered Accountants or Financial Consultancy. Interestingly, most of
about the service among the related parties involved in the B2B service, the respondents opined that experiential elements of service would
in the form of word of mouth (WOM). Based on the arguments, and matter in value perception and satisfaction and would boost the pos-
support from the rationale mentioned in earlier sections, we put for- sibilities of a long-term relationship between the firm and its service
ward the following hypotheses: provider. Thus, we found initial support for the conceptual model.
Based on the FGD findings, we selected Financial Consultancy (such as
H5. Service experience driven customers' perceived value will have a
chartered accountants, cost accountants, auditing firms and legal fi-
stronger positive effect on customer loyalty in the B2B setting, but
nancial consultancy) as the focal service to be tested in further studies.
service quality driven perceived value will have a weaker positive effect
This allowed us an advantage. If our findings hold for a service ranked
on customer loyalty (comparing paths 3 → 5 and 4 → 5 in Fig. 1).
moderately high on the experiential element, it should hold good for
H6. Service experience driven customers' perceived value will have a services that are high on experiential expectations. The second ad-
stronger positive effect on WOM in B2B setting, but service quality vantage of selecting Financial Consultancy (FC) as the focal service was
driven perceived value will have a weaker positive effect on WOM that any company would require such services irrespective of the pro-
(comparing paths 3 → 7 and 4 → 7 Fig. 1). duct/service that they produced/offered to the end customers.

5.3. Questionnaire design

4.5. Relationship between loyalty and positive WOM
The present study had six major constructs (refer to Fig. 1) in sur-
Several studies in B2C service setting enunciated the relationship
veys 1 and 2. Service experience and service quality were second-order
between customer loyalty behavior and positive WOM (e.g., Bloemer
constructs (each with four sub-dimensions). The endogenous constructs
et al., 1999; Ewing, 2000; Nyer, 1997; Reynolds & Arnold, 2000). In the
were: Perceived Value; Satisfaction; Loyalty and Word of Mouth (WOM)
B2B setting, WOM plays an important role in organizational buyers'
and were all first-order constructs. Service experience was measured
relationship (Roth & Menor, 2003). Continuing the argument in Section
using the Experience Quality (EXQ) questionnaire adapted from Klaus
2.3, we expect that service quality being more static and non-cumula-
and Maklan (2013). EXQ has the following four dimensions: Product
tive (as compared to service experience) would have a reduced effect on
Experience; Outcome Focus; Moments-of-Truth and Peace of Mind
customer outcomes beyond value and satisfaction (such as loyalty and
(Klaus & Maklan, 2012). Product experience deals with the customers'
WOM). On the other hand, service experience being more dynamic and
perception of having multiple alternatives to choose from and the
cumulative (as per ISE theory) would result in more enhanced effects on
ability to compare offerings of the service provider. Outcome focus is
the secondary outcomes such as WOM as compared to service quality.
associated with the customers' attitudes towards transaction cost and
Thus, the next hypothesis of the study is proposed as:
how the given service provider helps in its reduction. Moments-of-truth
H7. Service experience driven customer loyalty will have a stronger is related to the risk management and recovery procedures performed
positive effect on WOM compared to service quality driven customer by the service provider. Peace of mind is concerned with the customer
loyalty in a B2B service setting (comparing indirect paths interactions with the service provider before, during and after the ser-
{(1 + 6) + (3 + 5)} → 9 and {(2 + 6) + (4 + 5)} → 9 in Fig. 1). vice encounter. The questions for service quality were selected from the

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S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

Table 1 registered companies. The research firm was instructed to use the da-
Sample demographics. tabase of listed companies in the respective cities as the sampling
Sector/industry Survey 1 Survey 2 Survey 3 frame. We used stratified random sampling. Hence, the list of compa-
nies was further divided into major industry/sector classifications to
Manufacturing 50 52 72 include a variety of industries in the sample. Firms were randomly se-
Banking and financial services 13 15 21
lected in each industry, but the total number of firms selected from each
Construction and real estate 18 21 16
Health and allied services 13 15 15
industry in the sample was roughly proportional to the total number of
Hospitality 15 20 21 firms in the population. Following this, the target respondent in each
IT 19 21 49 company was specified. This was the finance/accounts officer or the
Textiles 17 21 23 chief of accounts who was directly interacting with the financial con-
Others 31 35 33
sultants. Thus, each response in our dataset constituted one unique
Company size (employees) firm. Once the target respondent agreed, a representative from the data
< 50 79 96 102
collection firm went in person to conduct the survey. In both the sur-
50–100 34 38 43
101–500 23 31 59 veys, the respondent was asked to respond to the questions with respect
500 and above 35 28 22 to the financial consultancy firm that he/she was interacting with.
Can't say 5 7 24 Thus, the instruction given was, “give your response to the following
Company age (years) statements considering Firm X to be a financial consultancy firm that has
<5 32 43 26 been providing service to your company”. In the case of firms employing
6 to 20 54 63 74 multiple consultants, the respondent was instructed to give his/her
21 to 35 36 42 77
opinion with respect to the firm that they do most business with, in
35 and above 36 33 49
Can't say 18 19 24 terms of value and interactions. The data collection firm was instructed
to ensure that they had firms of varied sizes and turnover to maintain
Turnover (₹ ‘00 million)
<5 79 89 39 diversity in the sample. The first survey resulted in 176 and the second
5 to 10 12 17 37 survey had 200 usable responses.
10 to 20 13 11 42
20 to 50 16 27 27
Above 50 23 15 60 5.5. Data analysis
Can't say/refused 33 41 45

Term with the current FC Firm (years) The first survey was used for item purification and testing for con-
<5 45 52 65 struct reliability and validity. Thereby, we used exploratory and con-
5 to 10 51 66 73 firmatory factor analysis to this end. The second survey was used for
10 to 20 57 68 78 testing the study hypotheses (Fig. 1). Hence, we used structured
20 and above 23 14 34
equation modeling to achieve the same.

INDSERV scale (22 items spanning four dimensions) of Gounaris 6. Results

(2005). The items for the endogenous constructs (value, satisfaction,
loyalty, and WOM) were selected from Molinari et al. (2008). However, The survey data were collected in such a way that balance is
the EXQ was validated in a B2C setup. Thus, it was modified to suit B2B maintained in factors such as industry, company size, age, turnover and
context, while maintaining the four-dimensional structure of Klaus and term with the present financial consultancy firm (Refer to Table 1 for
Maklan (2012, 2013). Both EXQ and INDSERV were modeled as re- sample demographics). The question to check for the perceived ex-
flective constructs at the first order and the second order level in their periential level of the focal service resulted in a mean of 3.3 (survey 1)
original construction [i.e., by Klaus & Maklan, 2012 and Gounaris, 2005 and 3.19 (survey 2). This implied that the respondents perceived FC
respectively] and thus we followed the same structure. The modified services to be moderate on experience.
questions were shown to an expert panel of three judges of which two
were service industry consultants, and one was a service marketing 6.1. Survey 1: exploratory factor analysis
professor from India. The panel had 90% agreement on the validity of
the EXQ questions in measuring B2B customer experience. Thus, the Researchers (e.g., Lewis, Templeton, & Byrd, 2005; Netemeyer,
face and content validity of the questions were established (refer to Bearden, & Sharma, 2003) suggest the use of Exploratory Factor Ana-
Table 2 for the items). The final questionnaire had 41 items measuring lysis (EFA) as a tool to provide an initial overview of the latent variables
service quality and service experience and 16 items to measure the and to help identify redundant items. In addition, Malhotra, Gosain,
endogenous constructs. All questions were measured on a seven-point and Sawy (2005) suggested testing scales from the beginning as the
Likert scale (1 Strongly Agree – 7 Strongly Disagree). The questionnaire scales developed in the western context might not yield similarly in
also had a section on company data where basic questions such as eastern contexts. Thus, we administered an EFA (using SPSS) for the
company age and size, industry of operation, annual turnover, time twelve study constructs (all first order) for the data from survey 1 to
since the present financial consultant is providing service, and a ques- ensure that the constructs displayed unidimensionality and the items
tion to check for the perception of the experiential level of the service (1 loaded onto their respective constructs. The EFA results yielded a
very high – 5 very low) were included. twelve-factor solution with five items (one each from the constructs
potential quality, hard process quality, soft process quality, peace of
5.4. Data collection mind and satisfaction) having poor loadings (Table 2). Post removal of
these five, the solution had satisfactory KMO values (0.872) and sta-
We collected the data using two consecutive surveys with the same tistically significant Bartlett's test values. All the scale items had com-
population. A reputed national marketing research firm was employed munality values above 0.6 and the total variance extracted was above
for the collection of data. The research firm was instructed to collect the 70%. Following the EFA, the individual constructs were tested for in-
data from companies headquartered in Mumbai and Delhi. While ternal consistency reliability measured through Cronbach's Alpha and
Mumbai is considered the financial capital of India, Delhi is the national all the constructs displayed accepted levels (above 0.7) of internal
capital, and both these cities have a significant concentration of consistency reliability (Nunnally, 1978).

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S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

Table 2
Survey 1: EFA, CFA, reliability and validity tests.
Construct Item EFA loading CFA Std. loading Cronbach's Alpha, AVE, composite
reliability

Potential Quality (POQ) Offers full service 0.837 0.602 0.70, 0.60, 0.88
Has required personnel 0.623 0.729
Has required facilities 0.587 0.793
Has reasonable management philosophy 0.312 N.A.
Has a low personnel turn-over 0.885 0.875
Uses network of partners/associates if required 0.632 0.809
Hard Process Quality (HPQ) Honors/maintains time schedules 0.717 0.751 0.71, 0.61, 0.87
Honors financial agreements/stays in budgets 0.806 0.796
Meets deadlines 0.347 N.A.
Carefully goes through details 0.816 0.833
Understands our needs 0.726 0.760
Soft Process Quality (SPQ) Has an enthusiastic approach 0.661 0.822 0.72, 0.62, 0.90
Listens to our problems 0.710 0.720
Has a pleasant personality 0.318 N.A.
Open to suggestions/ideas 0.808 0.803
Argues if necessary 0.614 0.804
Looks after our interests 0.740 0.787
Output Quality (OQ) Reaches objectives/targets 0.808 0.821 0.76, 0.62, 0.89
Has a notable effect on our business 0.713 0.764
Contributes to our sales/image 0.652 0.711
Is creative in terms of its offering 0.786 0.756
Is consistent with our policies 0.830 0.871
Peace of Mind (POM) I am confident in FIRM X's expertise 0.704 0.780 0.72, 0.64, 0.90
My dealing with FIRM X is easy 0.801 0.870
I know FIRM X will look after my needs for a long time 0.700 0.791
I stay with FIRM X because of my past dealings with FIRM X 0.575 0.785
I have dealt with FIRM X before so getting what I need is really 0.609 0.788
easy
FIRM X give(s) independent advice 0.409 N.A.
Moments of Truth (MOT) FIRM X was flexible in dealing with me and looked out for my 0.865 0.823 0.73, 0.63, 0.89
needs
FIRM X keeps me up to date 0.678 0.783
FIRM X is safe and reputed 0.712 0.735
The people at FIRM X have good people skills 0.802 0.816
FIRM X deal(t) with me correctly when things go (went) wrong 0.763 0.799
Outcome Focus (OUF) Staying with FIRM X makes my business process easier 0.632 0.754 0.70, 0.61, 0.87
FIRM X gives me what I need swiftly 0.827 0.834
I prefer FIRM X over an alternative provider 0.752 0.762
The people at FIRM X can relate to my situation 0.664 0.790
Core Service Experience (CSE) I can choose between different options at FIRM X 0.654 0.775 0.76, 0.66, 0.89
I receive beneficial offers from FIRM X 0.788 0.817
I can compare different solutions from FIRM X 0.731 0.795
I have one designated contact at FIRM X 0.748 0.841
Perceived Value (VAL) Compared to other CA firms, Firm X….. ……provides the best 0.719 0.834 0.80, 0.68, 0.90
value
……charges a reasonable price 0.791 0.817
……provides better services at a competitive price 0.763 0.808
.......provides better quality for the price 0.787 0.821
Satisfaction (SAT) Services of Firm X is of superior quality 0.692 0.854 0.79, 0.63, 0.84
Services of Firm X excellent 0.770 0.771
Services of Firm X is done right the first time 0.670 0.765
My experience with Firm X is up to expectations 0.215 N.A.
Loyalty (LOY) I will do more business with Firm X in the next few years 0.875 0.843 0.77, 0.65, 0.88
I expect a long term relationship with Firm X 0.797 0.812
I am likely to maintain the volume of business given to Firm X 0.784 0.801
I would continue doing business with Firm X even they increase 0.729 0.775
their charges
WOM I will highly recommend Firm X to others 0.780 0.826 0.81, 0.68, 0.90
I will say positive things about Firm X to others 0.775 0.820
I will encourage others to avail services of Firm X 0.794 0.837
I will refer other companies to Firm X 0.669 0.792

6.2. Survey 1: confirmatory factor analysis the study constructs (first order). Following this, we conducted a CFA
for the two second-order constructs, INDSERV (ISV) and Experience
We followed the EFA with Confirmatory Factor Analysis (CFA) for Quality (EXQ). The standardized factor loadings (λ values) for all first-
survey 1 data using AMOS. The CFA results displayed standardized order constructs loading onto their respective second-order constructs
factor loadings (λ values) above 0.6 for all scale items (Table 2). Next, were above 0.7. The AVE values for the two constructs were found to be
we calculated the Average Variance Extracted (AVE) values for the 0.72 and 0.62, and the construct reliability (measured by Joreskog's
twelve constructs that were found to be above 0.6 for all constructs. rho) was 0.91 and 0.87 (Table 3). The internal consistency reliability
Likewise, the construct reliability (measured by Joreskog's rho) was was above 0.8, thereby ensuring convergent validity for the second
above 0.8 for all constructs. Thus, we ensured the convergent validity of order constructs.

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S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

Table 3
Survey 1: CFA for second order constructs.
Second order construct First order constructs Std. loading Cronbach's Alpha, AVE, composite reliability

ISV Potential Quality (POQ) 0.902 0.83, 0.72, 0.91

Hard Process Quality (HPQ) 0.941
Soft Process Quality (SPQ) 0.763
Output Quality (OQ) 0.785
EXQ Peace of Mind (POM) 0.790 0.85, 0.62, 0.87
Moments of Truth (MOT) 0.785
Outcome Focus (OUF) 0.812
Core Service Experience (CSE) 0.771

Table 4 indirect effects whose sum may not be equal to the total indirect effect.
Survey 1: discriminant validity tests. This may happen when the mediators in multiple mediator models are
Construct ISV EXQ VAL SAT LOY WOM inter-correlated (Preacher & Hayes, 2008b). Third, a parallel/multiple
mediator model allows the researcher to compare competing theories
ISV 0.72 (which is our case) through the determination of the relative magni-
EXQ 0.44 0.62
tudes of specific indirect effects (Preacher & Hayes, 2008a). This ad-
VAL 0.37 0.40 0.68
SAT 0.19 0.25 0.33 0.63
vantage of multiple mediator models to compare the relative magnitude
LOY 0.21 0.44 0.14 0.13 0.65 of different mediation paths is supported in the literature (MacKinnon,
WOM 0.20 0.37 0.36 0.16 0.13 0.68 2000) and has been in practice by scholars (e.g. Ding, Ng, & Li, 2014).
Thereby, for model 1, we adopted the SEM equivalent of parallel
Note: Diagonal values represent Average Variance Extracted, Off-diagonal va- mediation with multiple exogenous constructs where we used max-
lues represent squared inter construct correlations.
imum likelihood followed by bias-corrected bootstrapping. The boot-
strapping method has been found to yield more accurate values (Efron
Subsequently, we tested for discriminant validity by comparing the
& Tibshirani, 1993) and thus we ran it for model 1 to check whether we
squared inter-construct correlations to the AVE values of each construct
received similar results across methods. We followed this by running
as per the method suggested by Fornell and Larcker (1981). In the
two simpler models. Model 2 was a truncated version of model 1 with
present study, we compared between ISV, EXQ (both at the second-
only EXQ as the exogenous construct. Similarly, Model 3 was a trun-
order level) and satisfaction, perceived value, loyalty and word of
cated version of model 1 with only ISV. The reason behind this was to
mouth (all at the first order level). To ensure discriminant validity, all
ensure that the results that we obtained from the combined model was
AVE's values should be greater than the square of the inter-construct
not spurious and was not because of the presence of the other exo-
correlations of the respective constructs. The diagonal terms in Table 4
genous construct (either service quality or service experience). We
(representing the AVE values) were greater than the off-diagonal terms
discuss the results of the three models in the following subsections:
(representing squared inter-construct correlations) thereby supporting
Model 1: Model 1 had all the study constructs (as in Fig. 1) and
discriminant validity among the study constructs.
yielded reasonably good fit-statistics as per criteria suggested by SEM
researchers, such as Bagozzi and Yi (1988) and Hu and Bentler (1999):
6.3. Survey 2: structural model [Chi-square/df = 2.4; Goodness of Fit Index (GFI) = 0.95; Adjusted
Goodness of Fit Index (AGFI) = 0.91; Comparative Fit Index
We used the data from survey 2 to test the study hypotheses. (CFI) = 0.96; Root Mean Square Residual (RMR) = 0.04; and Root
However, we conducted the analysis using three separate models. Mean Square Error of Approximation (RMSEA) = 0.04]. Both ISV and
Model 1 had all the study constructs as given in Fig. 1. All the analyses EXQ were found to have a significant and positive effect on satisfaction
were performed using AMOS. Our conceptual diagram (Fig. 1) had a (SAT) and perceived value (VAL), but the effect size of ISV was smaller
parallel mediation model with multiple exogenous variables. We than that of EXQ (Table 5). The findings were similar across the max-
adopted the mediation testing procedure suggested by Preacher and imum likelihood estimates and the bootstrap estimates, justifying the
Hayes (2008a, 2008b) and Hayes (2009). Preacher and Hayes (2008a, fact that the results were not obtained because of chance or the sample.
2008b) criticized the causal steps approach suggested by Baron and Our hypotheses were further supported from the paired t-tests for the
Kenny (1986) on multiple grounds and suggested the bootstrapping effect sizes for Satisfaction (tEXQ–ISV = 6.65; P < .001) and Value
approach based on multiple reasons. First, a parallel mediator model (tEXQ–ISV = 18.35; P < .001) respectively. Thus, H1 and H2 were
reduces the likelihood of parameter bias due to omitted variables. supported. Interestingly, the effect of Value on Loyalty was not found
Second, a set of simple mediation analyses may generate several

Table 5
Survey 2: results of the structural model.
Independent variable Dependent variable Maximum likelihood estimate Bias corrected Bootstrap estimate

Std. estimate S.E. P Estimate P

ISV → SAT 0.245 0.15 0.035 0.24 0.031

EXQ → SAT 0.339 0.24 0.008 0.33 0.007
ISV → VAL 0.207 0.16 0.019 0.20 0.019
EXQ → VAL 0.467 0.28 0.003 0.46 0.004
SAT → LOY 0.612 0.18 < 0.001 0.60 < 0.001
SAT → WOM 0.341 0.14 0.013 0.35 0.010
VAL → LOY 0.092 0.09 N·S 0.08 N·S
VAL → WOM 0.688 0.24 < 0.001 0.70 < 0.001
LOY → WOM 0.883 0.13 < 0.001 0.89 < 0.001

10
S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

Table 6 direct effects (as on satisfaction and perceived value) and indirect ef-
Survey 2: structural model with EXQ only. fects (as on word of mouth). The effect of loyalty on word of mouth was
Independent variable Dependent variable Std. estimate S.E. P found to be stronger in case of EXQ driven loyalty. Lastly, the effect of
perceived value on loyalty was not found to be significant in any of the
EXQ → SAT 0.466 0.13 < 0.001 models. To summarize, all the study hypotheses except H5 were sup-
EXQ → VAL 0.503 0.16 < 0.001
ported.
SAT → LOY 0.422 0.29 < 0.001
SAT → WOM 0.339 0.19 < 0.001
VAL → LOY 0.110 0.08 N.S.
7. Exploring the nuances: Survey 3
VAL → WOM 0.546 0.20 < 0.001
LOY → WOM 0.631 0.11 < 0.001
In surveys 1 and 2, we considered perceived value in a generic form.
However, in marketing, a consensus has emerged over time that sup-
significant. In the same analysis, the indirect effects of EXQ on Loyalty ports the notion that value derived out a product or service consist of
(LOY) and Word of Mouth (WOM) were found to be 0.385 and 0.379 two distinct aspects: hedonic and utilitarian values (Batra & Ahtola,
respectively while those of ISV on the same variables were 0.276 and 1991; Block, 1995; Dhar & Wertenbroch, 2000). For example,
0.271. This indicated that service experience (EXQ) was more influen- Diefenbach, Kolb, and Hassenzahl (2014) conceptualized hedonic and
tial in creating outcomes such as loyalty and WOM that service quality utilitarian product values as distinct that are derived out of distinct
(ISV). However, we proceeded to a more detailed analysis to ascertain drivers and have a differential impact on customer outcomes. It is also
these effects more accurately. We created two separate models with enunciated that an understanding of these two distinct dimensions
only EXQ (model 2) and only ISV (model 3) as the exogenous construct. covering the same aspect would provide a more focused picture of value
In those cases, we did not use bootstrap as we already found that the creation and delivery (Batra & Ahtola, 1991; Mano & Oliver, 1993;
results were similar for the maximum likelihood estimate in the com- Block, 1995; Veryzer Jr, 1995; Simonson & Schmitt, 1997; Strahilevitz
bined model. We present the findings from the two models and then a & Myers, 1998; Dhar & Wertenbroch, 2000). To the authors' best
comparative analysis of the effect sizes to justify our hypotheses. knowledge, there has been no study about the distinct contribution of
Model 2: As mentioned earlier, model 2 was a truncated version of these two values on the customer-focused outcomes in a B2B service
model 1 with only EXQ as the exogenous construct. Model 2 displayed setting. Thus, in the next survey (survey 3), we try to link service
adequate fit statistics (but poorer than model 1) [Chi-square/df = 2.9; quality, service experience, hedonic value, utilitarian value and cus-
GFI = 0.90; AGFI = 0.88; CFI = 0.91; RMR = 0.06; and tomer satisfaction.
RMSEA = 0.06]. Similar to model 1, all the hypothesized paths except It is recognized that if the product or the service attributes dominate
the effect of perceived value (VAL) on loyalty (LOY) was found sig- in functional and goal orientation aspects, then it will generate a higher
nificant (Table 6). level of utilitarian value. Contrary to this, if the product or service at-
Model 3: Model 3 was a truncated version of model 1 with only ISV tribute elicits a higher level of novelty, aesthetics, unexpectedness,
as the exogenous construct. Model 3 displayed adequate fit statistics pleasure and fun, then it develops a higher level of hedonic value
(but poorer than both model 1 and 2) [Chi-square/df = 3.1; (Strahilevitz & Myers, 1998). These two values derived out of “thinking
GFI = 0.89; AGFI = 0.84; CFI = 0.90; RMR = 0.07; and and feeling” aspects of the product are necessary to prompt customer
RMSEA = 0.06]. Similar to model 1 and 2, all the hypothesized paths decision making (e.g., Batra & Ahtola, 1991). We follow the theoretical
except the effect of perceived value (VAL) on loyalty (LOY) was found arguments that the perception of utilitarian value is derived from the
significant. However, all the significant effect sizes were smaller in functional aspects, and hedonic value is derived from customers' ex-
magnitude than those in model 2 (Table 7). periential feelings of the affective state (e.g., Crites Jr, Fabrigar, &
Petty, 1994; Kim & Han, 2009; Sweeney & Soutar, 2001; Voss,
Spangenberg, & Grohmann, 2003). Thereby, in the B2B setting, we
6.4. Comparative analysis of model 2 vs. model 3 argue that service quality of the B2B service provider would drive the
functional evaluation of the service. This functional aspect drives the
We adopted a simpler method of paired t-tests to compare the path customers to assess the utilitarian value of the product more favorably
estimates of model 2 and model 3. We avoided the more complex in- that in turn determines customer satisfaction. However, the effect of
variance testing (Vandenberg & Lance, 2000) because of two reasons. service quality on hedonic value will be less strong as it lacks the power
First, the data technically belonged to the same group and second, we to generate or reflect hedonic aspects of the product to the customer
were interested in the differences created by two separate variables (Tontini et al., 2013). In this scenario, service experience may be an
within the same data as compared to two unrelated/independent unexpected bonus in a B2B service setting, because the functional fea-
variables. Thus, we conducted a series of paired t-tests for con- tures reflected in service quality are entirely expected for the service
ceptualized relationships between the study constructs (except that of functioning. Thus, service experience would generate hedonic value
value on loyalty since it was not found significant in any model). The that in turn may enhance customer satisfaction. Since this experience
results suggested a statistically significant difference between the effect generated has less dominance to reflect the functional aspects of the
sizes of the EXQ only model as compared to the ISV only model product or service, it creates less favorable utilitarian value perceptions.
(Table 8). Thus, EXQ was found to be instrumental in creating stronger However, as we stated earlier, in a B2B service setting, the functional
value derived out of service quality perceptions of the customer is not
Table 7 sufficient to develop the value, because the basic requirements (func-
Survey 2: structural model with ISV only. tional evaluation) is a necessary but not a sufficient condition for sa-
Independent variable Dependent variable Std. estimate S.E. P tisfaction (Matzler, Bailom, Hinterhuber, Renzl, & Pichler, 2004).
Summarizing the discussion, we postulate that service quality of the
ISV → SAT 0.285 0.16 0.034 B2B service provider drives the utilitarian value, while service experi-
ISV → VAL 0.403 0.14 0.014
ence leads to the development of hedonic value. Both, these value
SAT → LOY 0.307 0.12 0.021
SAT → WOM 0.217 0.14 0.014 drivers are important to develop customer satisfaction. Thus, the next
VAL → LOY 0.142 0.09 N·S set of hypotheses is postulated as:
VAL → WOM 0.415 0.26 0.013
LOY → WOM 0.442 0.14 0.011 H8. In B2B service settings, service quality generates customer
satisfaction through utilitarian value perception more favorably than

11
S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

Table 8
Survey 2: comparative analysis.
Independent variable Dependent variable tEXQ–ISV Pt Corresponding hypothesis Inference

EXQ/ISV → SAT 12.42 < 0.001 H1 Supported

EXQ/ISV → VAL 6.65 < 0.001 H2 Supported
SAT → LOY 5.18 < 0.001 H3 Supported
SAT → WOM 7.49 < 0.001 H4 Supported
VAL → LOY Not Applicable H5 Not Supported
VAL → WOM 7.98 < 0.001 H6 Supported
LOY → WOM 15.01 < 0.001 H7 Supported

Potential
Quality

Hard Proc
Quality Service
Quality 1
Soft Proc
Quality
Perceived
Utilitarian
Value 5
Output 3
Quality Satisfaction

Peace of 2
Mind Perceived
6
Hedonic
Value
Mom of
Truth 4
Service
Experience
Outcome
Focus

Service
Experience

Fig. 2. The conceptual model: survey 3.

service experience (comparing paths 1 → 5 and 2 → 5 in Fig. 2). six members (4 academicians and 2 practitioners), where each member
was independently asked to rate the relevance of each item in mea-
H9. In B2B service settings, service experience generates customer
suring its respective construct (How much do you feel that item X re-
satisfaction through hedonic value perceptions more favorably than
presents the concept/construct Y?). Responses were collected on a five-
service quality (comparing paths 4 → 6 and 3 → 6 in Fig. 2).
point Likert scale (Very Much 1…………Not at all 5). The average scores
Both H8 and H9 are illustrated in the framework given in Fig. 2. We for each item in our questionnaire was below 2, thereby ensuring the
test these two hypotheses using survey 3. face validity of the construct measures.
The methodology and the locations were the same as survey 1 and 2
as was the choice of the service. Using similar procedures of data col-
8. Survey 3: details lection as in the previous rounds, we obtained 250 completely filled
questionnaires. We conducted an exploratory factor analysis of the
8.1. Questionnaire and methodology study items (available from the authors on request) and found a sta-
tistically feasible solution with the items loading onto their respective
The questionnaire in survey 3 included both the ISV and the EXQ constructs. Hence, we proceeded to perform the confirmatory factor
items as in surveys 1 and 2. Measures for perceived utilitarian and analysis.
hedonic values were adopted from Rintamäki, Kanto, Kuusela, and
Spence (2006). The scale developed by Rintamäki et al. (2006) has six
items each to measure utilitarian and hedonic value respectively. We 8.2. Survey 3: confirmatory factor analysis
also replaced the satisfaction scale used in survey 1 and 2 with a more
direct “performance-based” approach as suggested by researchers The CFA results displayed standardized factor loadings (λ values)
(Cronin and Taylor, 1992; Anderson & Srinivasan, 2003; Audrezet, above 0.6 for all scale items (Table 9). Both the Average Variance Ex-
Olsen, & Tudoran, 2016) (Table 9). The satisfaction scale mentioned tracted (AVE) values (above 0.6) and the construct reliability (Jor-
has three bipolar adjectives as measures of service satisfaction (e.g. My eskog's rho above 0.8) indicated adequate construct validity. Following
opinion towards the service is positive…………………negative). this, we conducted a CFA for the second order constructs INDSERV
At this point, we conducted another face validity test with a panel of (ISV), Experience Quality (EXQ), Utilitarian Value (UVAL) and Hedonic

12
S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

Table 9
Survey 3: CFA, reliability and validity tests.
Construct Item CFA Std. loading Cronbach's Alpha, AVE, composite
reliability

Potential Quality (POQ) Offers full service 0.855 0.88, 0.70, 0.92
Has required personnel 0.882
Has required facilities 0.855
Has a low personnel turn-over 0.882
Uses network of partners/associates if required 0.706
Hard Process Quality (HPQ) Honors/maintains time schedules 0.821 0.89, 0.72, 0.91
Honors financial agreements/stays in budgets 0.870
Carefully goes through details 0.847
Understands our needs 0.848
Soft Process Quality (SPQ) Has an enthusiastic approach 0.843 0.89, 0.77, 0.94
Listens to our problems 0.875
Open to suggestions/ideas 0.884
Argues if necessary 0.910
Looks after our interests 0.862
Output Quality (OQ) Reaches objectives/targets 0.874 0.93, 0.81, 0.95
Has a notable effect on our business 0.901
Contributes to our sales/image 0.916
Is creative in terms of its offering 0.913
Is consistent with our policies 0.886
Peace of Mind (POM) I am confident in FIRM X's expertise 0.897 0.94, 0.80, 0.95
My dealing with FIRM X is easy 0.934
I know FIRM X will look after my needs for a long time 0.904
I stay with FIRM X because of my past dealings with FIRM X 0.890
I have dealt with FIRM X before so getting what I need is really easy 0.845
Moments of Truth (MOT) FIRM X was flexible in dealing with me and looked out for my needs 0.886 0.95, 0.78, 0.95
FIRM X keeps me up to date 0.890
FIRM X is safe and reputed 0.886
The people at FIRM X have good people skills 0.892
FIRM X deal(t) with me correctly when things go (went) wrong 0.857
Outcome Focus (OUF) Staying with FIRM X makes my business process easier 0.886 0.93, 0.71, 0.91
FIRM X gives me what I need swiftly 0.899
I prefer FIRM X over an alternative provider 0.876
The people at FIRM X can relate to my situation 0.702
Core Service Experience (CSE) I can choose between different options at FIRM X 0.929 0.83, 0.87, 0.96
I receive beneficial offers from FIRM X 0.924
I can compare different solutions from FIRM X 0.940
I have one designated contact at FIRM X 0.936
Monetary Savings (UVAL1) I saved money when I did business with FIRM X 0.925 0.95, 0.82, 0.93
FIRM X charges a reasonable price 0.865
FIRM X provides better services at a competitive price 0.921
Convenience (UVAL2) FIRM X provided me with everything I need under one roof 0.916 0.89, 0.85, 0.94
FIRM X provided services without any delay or making me wait 0.927
Services provided by FIRM X was very convenient 0.925
Entertainment (HVAL 1) I enjoyed the service provided by FIRM X not just because I got what I needed 0.936 0.91, 0.85, 0.95
It was fun doing business with FIRM X 0.934
At times FIRM X make me feel pleasant while providing the service 0.899
Exploration (HVAL2) I felt that service given by FIRM X was like an adventure and I wanted to know 0.922 0.91, 0.84, 0.94
more
FIRM X provided me with new insights and new ideas to manage the service 0.926
I wanted to know more about all the services provided by FIRM X 0.897
Satisfaction (SAT) My evaluation of the service given by FIRM X is positive…………………negative 0.942 0.94, 0.89, 0.96
I am dissatisfied…………………satisfied with the service given by FIRM X 0.933
My opinion of the service given by FIRM X is unfavorable…………………favorable 0.951

Value (HVAL). The standardized factor loadings (λ values) for all first- EXQ only as the exogenous construct, while the third model had only
order constructs, AVE values and the construct reliability was found ISV as the exogenous construct. The first model displayed adequate fit
adequate. Coupled with the internal consistency reliability above 0.8, structure [Chi-square/df = 2.4; GFI = 0.93; AGFI = 0.90; CFI = 0.94;
this ensured convergent validity for the second order constructs. Sub- RMR = 0.06; and RMSEA = 0.05]. The path estimates (both Maximum
sequently, we tested for discriminant validity for all the first and second Likelihood and Bias-Corrected Bootstrap) revealed a non-significant
order constructs using similar procedures as in survey 1 and 2 and effect of ISV on hedonic value (HVAL) but a significant effect on utili-
found the constructs to display discriminant validity. tarian value (Table 10). However, the effect of EXQ was found sig-
nificant both on utilitarian and hedonic value (Table 10). Both UVAL
and HVAL were found to have a significant effect on satisfaction.
8.3. Survey 3: structural model When we compared the second and the third model (using similar
procedures as in Section 6.4), the results suggested a non-significant
The structural model in survey 3 (Fig. 2) was simpler than the difference of the effect of EXQ vis-a-vis ISV on utilitarian value and a
previous runs (survey 2) as we had only satisfaction as a consequence of similar non-significant difference of the effect of utilitarian value on
service quality/experience driven through value. Similar to survey 2, satisfaction driven by EXQ vis-a-vis ISV (Table 11). On the contrary, we
we ran three parallel models. The first model had all study variables found a significant difference in the effect of EXQ vis-a-vis ISV on
and aimed to test for overall model structure. The second model had

13
S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

Table 10
Survey 3: results of the structural model.
Independent variable Dependent variable Maximum likelihood estimate Bias corrected Bootstrap estimate

Std. estimate S.E. P Estimate P

ISV → UVAL 0.659 0.14 0.030 0.66 0.033

EXQ → UVAL 0.754 0.12 < 0.001 0.73 < 0.001
ISV → HVAL 0.091 0.15 N.S 0.09 < 0.001
EXQ → HVAL 0.817 0.13 < 0.001 0.81 < 0.001
UVAL → SAT 0.353 0.05 < 0.001 0.37 < 0.001
HVAL → SAT 0.588 0.05 < 0.001 0.52 < 0.001

hedonic value and a similar significant difference in the effect of he- to create the customer outcomes of satisfaction and value (Pine, 2015),
donic value on satisfaction driven by EXQ compared to ISV. In this case, that may be evident from the support of H1 and H2.
the effect was stronger for EXQ driven satisfaction. Thus, H8 was not Further, the study supports that service quality versus service ex-
supported while H9 was supported. perience driven satisfaction direct the B2B customers to develop the
higher-order customer outcomes of loyalty and word-of-mouth. In the
present study, service experience driven satisfaction indicated a strong
9. Discussions
positive impact on loyalty and word-of-mouth (H3 and H4). On the
other hand, the effect of service quality driven satisfaction on loyalty
The current study contributes to a better understanding of the
and word-of-mouth was relatively weaker (H3 and H4). This suggests
consequential effects of service quality versus service experience in
that in B2B services, imparting non-functional experience driven in-
professional B2B services. The uniqueness of the study, which differ-
teractions directs a stronger impact (than that of service quality) on
entiates it from previous research, is the emphasis on relative con-
customer satisfaction, which in turn leads to the formation of stronger
sequential effects of service quality and service experience on value
loyalty and word-of-mouth towards the service provider. For example,
dimensions and customer outcomes in B2B services (as indicated by
if the service provider “dealt with the customer correctly when things went
Meyer & Schwager, 2007). B2B services are designed to fulfill the
wrong” (Moments of truth), there is a high probability of generating
specific requirements of the customers. Thus, the customer expectations
satisfaction and subsequent loyalty.
concerning the service quality of the B2B services are almost static.
On the other hand, customers' service quality perceptions may de-
However, during the service delivery, the customer can expect a unique
velop into satisfaction that in turn, creates their loyalty intentions fi-
service experience from the service provider, which is considered to
nally leading to positive word-of-mouth as documented in the literature
have an impact on their reactions towards the concerned service.
(e.g., Molinari et al., 2008). In this case, while the service provider may
Though it is suggested in literature that service quality is not a major
have ‘required personnel and facilities’ (Potential quality), it may be
differentiating factor in the B2B services (e.g., Geigenmüller & Bettis-
considered as something that is obvious, and the subsequent effects on
Outland, 2012), and experience generated by the customers during the
satisfaction and loyalty may be mild compared to the former example.
B2B service interactions can have significant impact on the customer
Overall, the findings point to the notion that service experience may be
outcome (Biedenbach & Marell, 2010), the empirical validation is not
more dynamic than service quality (Payne et al., 2008). This implies
yet reported in B2B literature. This interspace is where our primary
that developing favorable service quality perceptions are essential to
theoretical contribution lies.
building customer satisfaction and their higher order behavioral out-
To start the discussion, we found the answer to our first question
comes towards the service provider. However, facilitating unique cus-
(does service quality and service experience differentially affect cus-
tomer experience may create strong consequential customer outcomes
tomer attitudes and behavior in the B2B services context?) as a ‘yes’.
towards the service provider, and may be more effective than that of
Subsequently, we found that service experience might have a stronger
service quality of the service provider.
effect on both immediate and subsequent consequences of service de-
In contradiction to one of our propositions, we found no effect of
livery compared to service quality. To this end, seven out of the nine
service quality versus service experience driven perceived value on
hypotheses that we proposed were supported (H5 and H8 were not
customer loyalty. This indicates that in the B2B setting, though the
supported). This implies that service experience may be more important
customers find the service experience to be more important than service
than service quality in case of B2B services. This point is further sup-
quality to create value, the value that they perceive of the service
ported through the comparative analysis of different models (See Tables
provider is not enough to justify their long-term staying intention with
5, 6, 7 and 11).
the service provider. However, the value that they perceive because of
The findings indicate that customers' service experience directs a
service quality or service experience is enough to generate positive
stronger positive relationship between the immediate outcomes than
word-of-mouth related to the service. The effect of service quality
that of customers' service quality perceptions. The result may have been
versus service experience on perceived value is highlighted in the
a fallout of the difficulty to observe service quality after the delivery of
findings from survey 3 (H8 and H9). While both service quality and
services (e.g., Hausman, 2003; Hsieh, Chiu, & Chiang, 2005; Murray &
service experience were found to affect perceived utilitarian value (al-
Schlacter, 1990). In the B2B setting, the experience generated by the
most to the same extent), only service experience was found to
service provider during the service interaction works as a critical factor

Table 11
Survey 3: comparative analysis.
Independent variable Dependent variable tEXQ–ISV Pt Corresponding hypothesis Inference

EXQ/ISV → UVAL 0.043 N.S. H8 Not Supported

UVAL → SAT 0.058 N.S.
EXQ/ISV → HVAL 4.10 < 0.001 H9 Supported
HVAL → SAT 3.10 < 0.001

14
S. Roy, et al. Industrial Marketing Management xxx (xxxx) xxx–xxx

influence perceived hedonic value. This supports the discussion on the present study also has a few limitations that may lead to the scope for
perceptions of value and the sources that lead to the generation of such future research. First, the study was conducted in a developing nation.
value (e.g., Batra & Ahtola, 1991; Crites Jr et al., 1994; Kim & Han, Researchers have noted several differences in service delivery and
2009; Sweeney & Soutar, 2001; Voss et al., 2003). In addition, service consumption between developed and developing countries (Malhotra,
experience (compared to service quality) driven hedonic value per- Agarwal, & Peterson, 1996). Therefore, an interesting extension of the
ceptions were found to exert a stronger influence on satisfaction (H9) study would be testing of the same model in a developed nation. This
while the difference was not significant in case of utilitarian value would also add to the generalizability of the findings. Second, we have
driven satisfaction (H8). Thus, the findings recognize the com- only investigated the attitudinal and behavioral aspects as the outcomes
plementary role of service quality and service experience (as both were of the service experience. A worthwhile future investigation could link
found to affect satisfaction) but underline the importance of service the service experience to financial outcomes. Third, we have not in-
experience at the same time. vestigated the antecedents of service experience from the service re-
Connecting these findings to the previous one, the study provides an ceiver's view. There could be several variables that may enhance or
important direction in the B2B setting. The satisfaction generated be- decrease the service experience of the client in a B2B service (such as,
cause of the service quality perceptions and service experience (with or previous experience as noted by Moore & Schlegelmilch, 1994). Like-
without value as a mediator) work as a quintessential component to wise, there could be possible moderators and mediators (such as the
generate loyalty intentions. For example, if a firm listen to the custo- number of people involved in service delivery and receipt) in the pro-
mers' problems and at the same time gives multiple alternatives to cess. Combining these in a more complex model could also lead to
choose from, it creates a satisfied customer who spreads the good word potential areas of further research. In spite of the limitations, the study
of mouth. However, the perception of value generated out of service has contributed to the area of B2B service research by empirically in-
quality and service experience does not have any effect on their loyalty vestigating the effect of service experience on service outcomes and has
intentions. Finally, the study finding supports that loyalty created brought out the superiority of service experience over service quality in
through the experience route generates customers' behavioral outcome a novel way. The study should foster more research in service experi-
of positive word-of-mouth (e.g., Ewing, 2000; Reynolds & Arnold, ence in the context of B2B services.
2000). This outcome indicates that it is important to build customer
intentions towards the service provider concerned to generate favorable References
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