Managing Customer Perceptions of the Business Environment for Competitive Advantage

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Predrag Basic
BA 656
Article Critique:
Managing customer perceptions of the business environment for competitive advantage By: Toni Hilton, PhD Westminster Business School, UK and Warwick Jones, PhD University of the West of England, UK Journal of Customer Behavior, 2010, Vol. 9, No. 3, pp. 265-281

Article Summary
Per Bendapudi and Berry, the environmental influences consumer behavior but does not influence consumers’ trust. Organizations have to research extent of how their marketing environment creates customers’ perceived behavior and also how individual factors of given environment add to that perception. While many other researchers and authors suggest that functional behavior requires perception of trust, authors of this article are suggesting that this may not be obsolete condition. Some organizational environments are more likely to result in dysfunctional or functional behaviors as a result of larger customer perception of dependency. If customer is perceiving dependence in continuity, competitive advantage is than probably gained through managing customer perceptions of the organizational environment to reduce perceptions of high dependency. This may then reduce the negative impact arising from dependence based dysfunctional behaviors. If customers exhibit functional behaviors when they perceive themselves to have a low dependency upon a service organization then the findings suggest practical steps that those organizations can take to influence customer perceptions of the business environment (Hilton&Jones, 2010). Analysis

Hilton and Jones wrote this article because of the fact that customer perceptions of the organizational environment and its influence on customer behavior is an area that is not researched enough. Customer behavior is a concept of a response to perceptions of organizational environment and they are categorized as functional or dysfunctional behavior based on potential impact on the firm. Authors are arguing that some organizational environments are more likely to result in functional or dysfunctional customer behavior. Per Hilton and Jones, that is result of greater perceived dependency, irrespective of whether customers trust their service providers, or business partners. There are numerous findings that consumer imagery extends beyond perceived price and company image to the business environment. Businesses that enjoy favorable image generally find that their products are accepted more readily than those from businesses that have less favorable or even neutral image in customers’ perception. This study focuses on the environmental antecedents of dependence. If a characteristic of the business environment is that it generates customer dependence upon a business partner then it is important for organizations to understand which aspects of their business environment contribute towards the perception of dependence (Hilton&Jones, 2010). Consumers’ selections of stimuli from the environment are based on interactions of their expectations and motives with the stimulus itself. People usually perceive things they need or want, and block the perception of unnecessary, unfavorable, or painful stimuli. This study was designed to identify, compare and contrast the experiences of commercial and private clients to determine whether the environmental variables identified by Bendapudi and Berry were applicable to the legal service context and, if so, were they also relevant to individual consumers as well as business customers. It is more difficult for consumers to evaluate the quality of services than the quality of products because of certain distinctive characteristics of services (in this case legal service provided by a law firm). Legal services are intangible, variable and perishable. Customers are usually not capable of comparing services side-by-side. Therefore other significant factors play role in shaping perception and dependence such as quality of...
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