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ARTICLE IN PRESS

Journal of Retailing and Consumer Services 13 (2006) 1–13
www.elsevier.com/locate/jretconser

Building marketing strategies for state-owned enterprises against private ones based on the perspectives of customer satisfaction and service quality
Lien-Ti BeiÃ, Cian-Fong Shang
Department of Business Administration, National Chengchi University, 64, Section 2, Chihnan Road, Taipei, Taiwan

Abstract
In the process of deregulation and privatization, profit-seeking state-owned as well as private enterprises typically compete directly in the same market. This paper employed two data sets, namely those from the banking and gas station industries in Taiwan, to fulfill two objectives. The first is to evaluate the effectiveness of state-owned enterprises as measured by service quality and customer satisfaction. The second objective is to develop the key marketing strategies for these state-owned enterprises according to simultaneous importance-performance analysis. The results show that customers’ overall satisfaction with state-owned enterprises is much lower than that with private competitors, a fact mainly attributed to the formers’ poor service quality. Marketing strategies for state-owned enterprises should concentrate on employee-related service quality attributes. In the short-run, ability-related attributes can be improved through effective standardized operating procedures, employee training and sufficient manpower. In the long run, attitude-related attributes can be transformed through a customer-oriented culture. r 2004 Elsevier Ltd. All rights reserved.

Keywords: State-owned enterprises; Simultaneous importance-performance analysis; Perceived service quality; Perceived product quality; Perceived price fairness; Customer satisfaction

1. Introduction
Service marketing and its subsequent theoretical
foundation have, to a large extent, been developed with
private profit-seeking organizations as the unit of
analysis, and this has often led to the neglect of public
services (Andreassen, 1995). However, many countries
with mixed economies, like those of the Organization for
Economic Cooperation and Development (OECD),
have a combination of both the private and public
sectors, which illustrates the importance of the role of
public service organizations. Besides this, with the
processes of privatization and/or deregulation, it comes
ÃCorresponding author. Tel.: +886-2-29393091X81230;
fax: +886-2-29398005.
E-mail addresses: lienti@nccu.edu.tw (L.-T. Bei),
cfshang@ms54.hinet.net (C.-F. Shang).

0969-6989/$ - see front matter r 2004 Elsevier Ltd. All rights reserved. doi:10.1016/j.jretconser.2004.07.002

the competition between both the private- and stateowned enterprises (SOEs) within the same industries. The banking, gas station, electricity, telecommunication
and transportation industries in Taiwan are such
examples that have arisen since their deregulation and
liberalization.
In 1990, the Taiwan government liberalized the
banking industry, which had previously been dominated
by public banks. Sixteen new private banks began
operations in 1992; thus, greatly intensifying competition in the banking industry. The petroleum market, on the other hand, had been monopolized by only one
SOE—the Chinese Petroleum Corporation (CPC),
which was responsible for both the production of and
the outlets for gasoline. In 1987, the gas station industry
was liberalized, and the number of private gas stations
has been growing rapidly ever since. By the end of June
1997, there were 588 CPC-owned and 853 private-owned

ARTICLE IN PRESS
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L.-T. Bei, C.-F. Shang / Journal of Retailing and Consumer Services 13 (2006) 1–13

gas stations. In that the number of private gas stations
was larger than that of the CPC, competition was
considerably magnified. Normally, it should follow that
competition greatly ameliorates the effectiveness and
efficiency of an overall industry. However, faced with...
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