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Industrial Marketing Management 37 (2008) 921 939

The roles of service encounters, service value, and job satisfaction in achieving customer satisfaction in business relationships
Irene Gil , Gloria Berenguer 1 , Amparo Cervera 2
Faculty of Economics and Business, Department of Marketing, Avda. de los Naranjos, s/n. 46022 Valencia, Spain Received 16 June 2006; received in revised form 4 June 2007; accepted 23 June 2007 Available online 16 August 2007

Abstract Along with variables like the service process, perceived service value and customer satisfaction, job satisfaction of service employees plays a vital role in customer evaluation of service result. However, there has been little in-depth research into the nature of this relation, in particular in the context of B2B relations. In the sphere of an organization providing financial intermediation services to the banking sector and on the basis of a literature review, hypotheses are developed which establish the mediator role of service value and the moderator role of job satisfaction of service employees when delimiting customer satisfaction. Reliability and validity analysis give satisfactory results and our conclusions establish firstly that service encounter directly and significantly affects perceived service value which is the final antecedent to customer satisfaction and secondly, that the level of employment satisfaction moderates its effect on service value. 2007 Elsevier Inc. All rights reserved.
Keywords: Service encounter; Service value; Customer satisfaction; Job satisfaction of service employees; Financial sector

1. Introduction There are fundamental differences between an organization marketing to other organizations often referred to as industrial or B2B marketing and an organization marketing to consumers, that is, business to consumer (B2C) marketing (Yanamandram & White, 2006). The literature in general has mainly focused on consumer services rather than business services (Parasuraman, 1998), but driven by changes in the economy, marketing and purchasing of business services have been receiving growing attention both in research and practice (Wynstra, Bjrn, & van der Valk, 2006).

The authors would like to express their thanks for the financial support received under the Spanish Ministry of Education and Science Research Project (SEJ2004-05988). Corresponding author. Tel.: +34 963 828329. E-mail addresses: irene.gil@uv.es (I. Gil), gloria.berenguer@uv.es (G. Berenguer), amparo.cervera@uv.es (A. Cervera). 1 Tel.: +34 963 828319. 2 Tel.: +34 963 828964. 0019-8501/$ - see front matter 2007 Elsevier Inc. All rights reserved. doi:10.1016/j.indmarman.2007.06.008

Furthermore, the growth in business related services is the main driver behind the increased share of the service sector in total value added. In 2001, finance, insurance and business services such as legal and consultancy services accounted for 2030% of value added in the overall economy having doubled their share since 1980 (Wlfl, 2005). The study of concepts like quality, satisfaction and, more recently, perceived value, with roots in early works by Carlzon (1987), Grnroos (1982), Lehtinen and Lehtinen (1982), Parasuraman, Zeithaml, and Berry (1988), and Oliver (1980), provides new opportunities in organizational management. In particular, it becomes critical to identify and measure the elements which contribute most to explaining satisfaction, thus providing companies with a better understanding on how the customer's point of view is built in an environment where building more unique relationships with customers is vital (Lindgreen, Palmer, Vanhamme, & Wouters, 2006). Moreover, service marketing literature has argued that the service process, or service encounter, may be the most important antecedent in customer evaluation of service performance (Brown & Swartz, 1989; Lehtinen & Lehtinen, 1982). These service encounters are considered as the basis for building customer satisfaction.

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The literature on these topics is extensive, although the precise nature of their content and of their relationships has not been extensively documented, even less so in terms of businessto-business relationships (De Ruyter, Wetzels, Lemmink, & Mattsson, 1997; Eriksson & Lfmarck Vaghult, 2000; Yeung, Chew Ging, & Ennew, 2002). On the other hand, in service systems it has been stated that employees' satisfaction with their jobs is so important as customer satisfaction for the results of an organization (Comm & Mathaisel, 2000:43). Employees' attitudes, in general, have been proved as a variable affecting customer satisfaction (Adsit, London, Crom, & Jones, 1996) and, more specifically, this satisfaction seems to intervene in quality perceptions held by customers (Schneider & Bowen, 1985). With the increased demand for professional services, marketing and organizational structures are changing and the importance of studying the antecedents of delivering service quality in a professional service is crucial (Boyt, Lusch, & Naylor, 2001: 321). Particularly, Storer and Rajan (2002) point out that survival for financial services in an evolving workplace increasingly relies not only on technical but also on behavioral skills and knowledge relating to working methods characterized by networking, inter-dependency and reciprocity. Consequently, this paper will explore relationships among service encounter (SE), perceived service value (SV), customer satisfaction (CS) and job satisfaction of service employees (JS), considering as the scenario of this research an organization specialized in service provision to financial entities, where 90% of its activity consists of preparing and processing house mortgages. First, we review the literature on the concepts SE, SV, CS and JS, and identify the links between them in order to define the research hypotheses. Then, we present the research methodology and the results of the study, followed by the conclusions and recommendations for management. 2. Theoretical framework and hypotheses 2.1. Service encounters From the customer point of view, the most vivid service impression occurs during the service encounter or moment of truth, i.e. when customers interact with the service company (Zeithaml & Bitner, 2002:107). During these encounters, also known as interactions which take place in a relation episode (Ravald & Grnroos, 1996), the customer receives a sort of snapshot of the organization's level of service provision. Thus, the result of interactions between organizations, related processes and services, employees who provide the service and customers define the service experience (Bitner, Faranda, Hubbert, & Zeithaml, 1997) and from the customer's point of view, the service encounter is the origin of the whole chain of evaluations on the service result (Lehtinen & Lehtinen, 1982). The service encounter has traditionally been described as the dyadic interaction between service providers and customers (Surprenant & Solomon, 1987). There are different types of

service encounters (Shostack, 1985), the most frequently studied being personal interactions. Armstrong (1992) proposes defining this process of service delivery as a system which can be broken down into a number of different stages. Customer perception of service characteristics in each of these stages is therefore the antecedent and origin of any process of service evaluation, and each encounter contributes the same to the customer's general satisfaction and to his/her willingness to do business with the company again (Zeithaml & Bitner, 2002:108). 2.2. Service value The notion of value, from a marketing approach, has a clear subjective orientation with most authors attributing an evaluative judgment to it (e.g. Berry & Yadav, 1997; Flint, Woodruff, & Gardial, 2002; Monroe, 1992; Woodruff, 1997; Zeithaml, 1984, 1988). Furthermore, value is not inherent to services rather it is experienced by the customers (Woodruff & Gardial, 1996:7) and therefore perceived by them. This perception in B2B interaction materialises in judgments or evaluations of what the customer perceives as received from the seller in a specific situation of purchase or use (Flint et al., 2002:103). This approach to the notion of value is consistent with the parameters and analytical methods proposed in the literature on consumer value (Holbrook, 1999). There is a tendency to define value as a two-way variable following the proposal by Oliver (1999), using the term tradeoff as equivalent to compensation or balance between benefits and sacrifices. The most basic approach to a two-way definition of value is that of ratio or trade-off between quality and price (Monroe, 1992), in other words value for money (Fornell, Johnson, Anderson, Cha, & Bryant, 1996; Gale, 1994). However, increasingly, authors are suggesting that this vision is too simplistic (Bolton & Drew, 1991), and other more sophisticated measures are needed. Thus, it is suggested that perceived value can be understood following the proposal by Zeithaml (1988:14), as a global evaluation that the customer develops concerning the usefulness of a product or service, based on the perceptions of what he or she has received in contrast to what he or she has given. Thus, value is a positive function of what is received and a negative function of what is sacrificed (Oliver, 1999:45), if indeed it is possible to use the term value to describe perceptions that are exclusively positive or negative. On the above basis, service value could be the result, in part, of quality, understood as a global judgment, or attitude, relating to the superiority of the service (Parasuraman et al., 1988: 16). In this line of research, a significant number of contributions present value as an advance of quality and so, it becomes a macro-concept which includes quality (Oliver, 1999). Thus, quality components are important elements of value although service value also includes other components (Lapierre, Filiatrault, & Chebat, 1999:236). These other elements would consider both the price paid for the service and the other costs incurred by the customer on acquiring the service.

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2.3. Customer satisfaction The satisfaction of customer needs is one of the issues which has awoken most interest in the marketing literature in general and in the sphere of services in particular. However, the variety of approaches indicates a certain amount of confusion which may have arisen due to the dual process-result focus which has marked the contributions in the literature. The lack of agreement on conceptualizing satisfaction creates certain difficulties for researchers when it comes to choosing the most appropriate definition, developing valid measurements and comparing empirical results (Giese & Cote, 2000). Many definitions describe satisfaction as an evaluation process, whose antecedents can be clearly identified. Giese and Cote (2000) criticize definitions which treat satisfaction as an evaluative process given that these definitions do not determine the character of this phenomenon. These authors prefer to approach satisfaction as a summary affective response which varies in intensity, reflecting satisfaction as a holistic evaluative outcome. This distinction does not preclude the importance of cognitions in determining satisfaction; however, cognitions are bases for the formation of satisfaction, but the cognitions are not satisfaction (Giese & Cote, 2000:15). As the authors point out, focusing on the response (construct) rather than the process (model) facilitates the operationalization of consumer satisfaction as a single construct unencumbered by various antecedents or consequences (Giese & Cote, 2000:16). In addition, the conceptualization of consumer satisfaction can be interpreted by focusing on a specific transaction or from an accumulative perspective. Most definitions in the literature correspond to the first approach (Giese & Cote, 2000; Mano & Oliver, 1993; Spreng, Mackenzie, & Olshavsky, 1996) although some of the more recent contributions support the idea that satisfaction is a global measure of a set of satisfactions with previous specific experiences (Yu & Dean, 2001:235). According to Jones and Suh (2000), defining satisfaction in this way provides a better explanation for behavioral intentions. 2.4. Job satisfaction of service employees The area of JS has been one of the most widely researched in the literature on organizational behavior (Spinelli & Canavos, 2000; Snipes, Oswald, LaTour, & Armenakis, 2005), with a growing interest in the sphere of service marketing. Study in this area began in the 1930s due to the desire, mainly of industrial psychologists to help company management control the workplace (Brief & Weiss, 2002) and it continues years later because of its relation to aspects like productivity, absenteeism, employment turnover ratios (Tsigilis & Koustelios, 2004). However, the relation between job satisfaction of service employees and performance at work is complex, especially in view of the fact that the relation can be affected by a series of moderating factors such as job characteristics, employee personality traits, personal belief system, values and selfesteem, group norms and other demographic and organizational factors (Wilson & Fringpon, 2004). Despite this complexity, most studies show that satisfaction is a value to be encouraged

in organizations, not only because of its relation to behavior in the workplace itself, but also because of its possible relation to customer perceptions. Despite the interest and importance of the concept job satisfaction, its conceptual domain is complex since job satisfaction can be interpreted in different ways. While some researchers have theorized about more or less specific work factors relevant for job satisfaction (e.g. Locke, 1976), there is no gold standard which indicates what aspects of employment should be taken into account when measuring job satisfaction (Saane, Sluiter, Verbeek, & Frings-Dresen, 2003:191). Without doubt the most influential definition in the literature is that of Locke (1976:1300) who defines it as a positive or pleasurable emotional state resulting from one's own appraisal of the job or of one's work experiences. Smith, Kendall, and Hulin (1969:6) point out that JS is a feeling or affective response to the facets of a work situation. However, as Brief and Weiss (2002) point out, although job satisfaction is often defined and measured as an affective state, from the 1990s critics have begun to question this in terms of how it is caused, defined and measured. Organ and Near (1985) acknowledged that job satisfaction has a cognitive and affective dimension and questioned the measures commonly used. This is what Brief and Roberson (1989) defined as a paradox which continues unresolved: satisfaction is defined in affective terms but is only measured in its cognitive dimensions. Thus, in the 1990s, more balanced treatments of JS begin to appear. Motowidlo (1996:1976) defined job satisfaction as judgments on the favorability of the work environment and Brief (1998:86) as an internal state which is expressed through affective and/or cognitive evaluations of a job experience with some degree of approval or disapproval. In other words, job satisfaction is similar to an attitude. According to Zurriaga (1990:4) it is not a question of a specific attitude, but a general attitude resulting from several specific attitudes which a worker has towards his job and related factors. On the same lines, Churchill, Ford, and Walker (1974) state that job satisfaction has a wide conceptual terrain as it includes all the characteristics of the job itself and of the work environment. It is therefore a result variable, to the extent that an individual evaluates the satisfaction levels experienced in relation to a series of dimensions in his or her job, in terms of infrastructure, relations and processes in order to then emit a judgment. It is therefore a wide concept which includes perceptions about a set of elements in the job itself and the workplace. 2.5. Hypotheses: relationships between service encounter, service value, customer satisfaction and job satisfaction of service employees The study of the links between satisfaction and quality comes before the study of value. In particular, marketing literature has focused on researching the differences and causal order between the two. According to Cronin, Brady, and Hult (2000), there are three different positions: (1) that which suggests there is no relation between quality and satisfaction, so neither can be the antecedent of the other; (2) that which argues that satisfaction acts as an antecedent to quality and (3) the

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dominant position, which establishes inverse causal order where satisfaction is the consequence of quality. The variables customer satisfaction and quality have also been related to value. The concept of value, as we have shown, goes beyond that of quality, and is an advance of quality as it incorporates sacrifices and other additional benefits. In the research which has observed the relationship between the two, the conclusion is that value is the consequence of quality (e.g. Caruana, Money, & Berthon, 2000; Grewal, Monroe, & Krishnan, 1998; Kashyap & Bojanic, 2000; Oh, 1999, 2000; Cronin et al., 2000; Sirohi, Mclaughlin, & Wittink, 1998; Sweeney, Soutar, Whiteley, & Johnson, 1996) and value can be understood as a higher order construction. Referring to the link between value and satisfaction due to the natural affinity between the two concepts (Woodruff & Gardial, 1996:86) as both are formed on the basis of evaluative judgments (Woodruff, 1997), it is difficult to clearly differentiate between them and price has arisen as the discriminant element. However, as the number of in-depth studies on value in the literature has grown, the importance of price as a differentiating criteria has started to diminish (Oliver, 1999). For Sweeney and Soutar (2001:204), although value can easily be confused with satisfaction, the difference is clear: these constructs are different. While perceived value occurs in different stages of the purchase process, including pre-purchase (Woodruff, 1997), satisfaction is universally a post-use or post-purchase evaluation. It seems clear that this statement introduces a causal order which allows satisfaction to be understood as the result of the perception of value, as shown in the research by, among others, Fornell et al. (1996), Oh (1999, 2003), Caruana et al. (2000), Babin and Kim (2001), and Gallarza and Gil (2006). Furthermore, it could be concluded that there is a relation between the interactions which take place in what we have called the service encounter and customer satisfaction. It could also be stated, however, that customer judgments on these interactions through performance scores could refer to service value, which influences satisfaction. The issue now to be considered concerns the nature of the relation between these three variables. Empirical evidence is scanty and it seems that it would be useful to confirm these relations in the sector and sphere of activity in our research scenario. In the service being studied, there are different interactions in each episode which make up the service encounter. It would seem reasonable for there to be direct effects on customer perceptions of said interactions on service value. Consequently, the first working hypothesis we propose is as follows: H1. The more positive the perceptions of episode interactions the more positive the service value. Our previous discussion hypothesized that perceptions of service characteristics are antecedents to service value, but what are the consequences of perceived service value? It would again appear reasonable and in accordance with the above discussion for perceived service value to directly affect overall customer satisfaction raising therefore the issue of the effect of service encounter perceptions on customer satisfaction. Thus percep-

tions of service characteristics in each interaction affect service value which in the end affects overall customer satisfaction. Consequently we propose the following hypotheses: H2. The more positive the perceived service value, the more positive overall customer satisfaction. H3. Perceived service value mediates the effects of perceptions of episode interactions on overall customer satisfaction. In the competitive context of the financial services industry, it is becoming more frequently pointed out that job satisfaction of service employees is as important as customer satisfaction for an organization's results (Comm & Mathaisel, 2000:43). Thus, Schneider (1980) reports that job satisfaction is the main reason why employees develop good service, influencing customer satisfaction (Adsit et al., 1996; Koys, 2001; Rucci, Kim, & Quinn, 1998), their perceptions of service quality (Hartline & Ferrell, 1996; Schneider & Bowen, 1985) and competitiveness (Asif & Sargeant, 2000; Berry, 1981; Grnroos, 2001; Spinelli & Canavos, 2000). The interactive nature of service delivery places employees in an outstanding position to generate positive perceptions (Zeithaml & Bitner, 2002), given that many dimensions of service will be affected by their actions, attitudes and emotions throughout the service encounter. In service encounters, employees must be considered executors and their behavior is the service quality which customers perceive (Bitner, 1990). In this context, job satisfaction of service employees may be understood as a motivator for service performance, with this idea becoming almost an axiom in the service literature (Wilson & Frimpong, 2004:471). Thus, and although it is not the only element, Snipes et al. (2005:1330) point out that currently most managers understand that to cause a substantial impact on service quality in organizations, front-line workers and customers need to be central to management concerns. Introducing policies to increase job employee satisfaction may well be worth it in the end. Heskett, Sasser, and Schlesinger (1997) propose a theoretical model in which employee job satisfaction begins a chain of benefits leading to quality, productivity, service value, customer satisfaction and loyalty which in turn leads to profits and growth. Surprisingly, however, as Silvestro (2002) has pointed out, little empirical evidence is given to support the validity of these relations. The authors use the term satisfaction mirror to refer to the fact that employee job satisfaction is reflected in terms of customer satisfaction which in turn generates growth and profit (Heskett et al., 1997). Similar observations are made by Heskett, Jones, Loveman, Sasser, and Schlesinger (1994), Spinelli and Canavos (2000), Bernhardt, Donthu, and Kennett (2000), and Tornow and Wiley (1991). Schlesinger and Heskett (1991) and Reichheld (1996) also argue that job satisfaction of employees has the potential to improve customer service or increase customer satisfaction. The underlying idea in these studies is that satisfied workers will perform their work better than those who are not, they will be in better disposition and will be more likely to behave considerately towards colleagues and consumers (Motowidlo, 1984; Rogers, Clow, & Kash, 1994). In fact, Boshoff and Allen

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Fig. 1. Hypothesis on the relations between service encounter, service value, customer satisfaction and job satisfaction of service employees.3

(2000) conclude, among other things, that front-line employees who are more efficient at recovering consumers are more likely to show higher levels of job satisfaction. In the context of financial services, Ryan, Schmit, and Johnson (1996) suggest that consumer satisfaction is the cause of employee satisfaction and Reynierse and Harker (1986) conclude that employee job satisfaction derives partly from the opportunity to offer customers high service levels and partly from positive customer feedback after the interaction. In terms of the relation employee job satisfaction-service quality, Yoon, Beatty, and Suh (2001) conclude that variables in job climate contribute directly to job satisfaction and effort of service employees and indirectly impact customer perceptions of employee service quality. The work of Snipes et al. (2005), Hartline and Ferrell (1996), and Schneider and Bowen (1985) is on similar lines. Other empirical evidence, however, indicates that this relation is very weak (Ellis, Gudergan, & Johnson, 2001; Loveman, 1998; Schneider, White, & Paul, 1998; Silvestro, 2002). These studies and other data show that the univocal relationship between employees job satisfaction and business results or between employees job satisfaction and customer satisfaction is beginning to be questioned, hence the appropriateness of continuing this line of research. Thus, we establish that moderation hypotheses can be plausible and that the intensity of the relation between perceptions which develop in the relation episode and service value could vary according to the level of job satisfaction of service employees and thus we propose the following research hypothesis: H4. Job satisfaction of service employees moderates the effect of perceptions in interactions in an episode on customer perceived service value. Fig. 1 is a summary of the hypotheses on the relations under consideration. 3. Research methodology In this work we verify the hypotheses under consideration by analyzing the particular case of the relationship between a company providing management services to external finance

3 The continuous lines represent direct relations and the discontinuous lines represent mediated or moderated relaciones.

organizations in the banking sector and their clients, banks, in Spain. The company specializes in house mortgage service provision to financial entities, with 90% of its activity dedicated to preparing and processing mortgages, this service being the core of our study. The request for the services provided by the external financial organization comes directly from the credit entities (banks), which act as intermediaries between the final consumer and the company. The quantitative methodology uses ad-hoc interviews through two structured questionnaires: one focused on customers (i.e. banks) and the other on the service provider employees. The questionnaire which focuses on the customers was administered to the managers of bank offices which, the month before the field work began, had processed at least one mortgage with the service provider trying to achieve a proportion in the whole companies' customer distribution and the sample. Using the office manager as key informant, the questionnaire provided two-way information. Firstly, perceptions of the sequence of stages making up the service provision were evaluated, characterizing each of the interactions in the episode or service encounter cascade on the basis of procedure indicators (how the service is delivered) and technical and functional (what is delivered) (Lehtinen & Lehtinen, 1982; Ravald & Grnroos, 1996). Secondly, issues concerning the overall evaluation of the service were considered in order to identify service value and satisfaction. A total of 194 valid questionnaires were obtained for analysis. It is not common in this kind of studies to use data verifying the randomness condition (e.g. Asif & Sargeant, 2000; Brown & Swartz, 1989; Comm & Mahaisel, 2000; Sirohi et al., 1998; Yoon et al., 2001). This research is not an exception. Although convenience sampling presents disadvantages, for our exploratory research, the sample represents the kind of relationship that the organization has with their different bank customers. Then, given a period of time loans managed during the last month a census of bank offices that during the period has processed at least one loan with the company was analyzed (194). These 194 offices were moreover proportional to the weight of each entity in terms of the total number of loans managed during the previous year. In this sense, in our research, the majority of those interviewed, 63.4% of the sample, represent bank offices of financial entity 1, with an average of 8 house mortgages; 8 house mortgages have also been handled by financial entity 2, representing 8.3% of the total sample.

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Fig. 2. Service encounter cascade: processing a mortgage.

Finally, 28.4% of the sample are bank offices belonging to entity 3, with 16 house mortgages handled during the last month. The questionnaire focused on the service provider aimed to evaluate job satisfaction of service employees in order to analyze its possible moderating effect on the other variables considered. The questionnaire was administered to all the employees in the organization. To guarantee confidentiality, it was agreed that company managers would not be able to access individual replies. Personal interviews were developed, during working days. The organization under study suggested the order of the interviews so that we would not distort the day to day working rhythm. Questionnaires were administered by a person hired and trained for the purpose. Data was processed and analyzed using SPSS 11 software. 3.1. Measurement instruments The evaluation measurements used were designed on the basis of the literature review and through group discussions with heads of the organization. Our first aim is to investigate the relationships between the provider and its organizational customer, evaluated from this last perspective, taking, as a starting point the set of personal interactions that take place in a service episode (Grnroos, 1990; Ravald & Grnroos, 1996) or service encounters (Bitner, Booms, & Tetreault, 1990). The service encounters (SE) or episodes which took place between the provider company and the bank are direct and indirect personal encounters. The sequence of interactions which occurs in each of these encounters defines the service being studied: processing a mortgage. A set of interactions have been identified on the basis of 3 focus groups that were composed by the organization executives and bank executives which can be grouped around five stages which define the service encounter: telephone service, preparation and assistance

with signing the agreement, the registering process, documentation delivery and liquidation of the down payment on expenses (see Fig. 2). Each of the five phases has been defined on the basis of a set of service characteristics with a battery of items (see the Appendix), evaluated through 5 possible replies ranging from not at all appropriate (1) to very appropriate (5), giving content to the SE scale (Service Encounter). To evaluate service value (SV), we used a multi-item scale which retains cost/benefit indicators in response to the need to include multiple measurements, suggested among others by Bolton and Drew (1991) and Sweeney and Soutar (2001). Thus, service value has been defined on the basis of quality, on the understanding that SERVQUAL's research tradition (Parasuraman et al., 1988) offers good opportunities as a starting point for its evaluation. Our proposal (SV see the Appendix) is a scale which retains one item per quality dimension and starts from performance scores only on the lines of the research by Brady, Cronin, and Brand (2002) and based on the recommendations, among others of Novack (1997) for evaluating organizational customers (items V1V5). After defining the items which give content to quality, we considered including other indicators in the original scale following the literature on value. Thus, costs were included as effects, evaluated positively (see items V6V10 in the Appendix): (1) the perception of risk or greater security in the experience through the indicator confidence following the approaches, among others of Ravald and Grnroos (1996), De Ruyter et al. (1997), and Sweeney, Soutar, and Johnson (1999), trying to capture the emotional or affective component of the relation's perceived value, (2) time or effort, following the suggestion by De Ruyter et al. (1997), defining energy or non-monetary sacrifices understood as effort, time and convenience; (3) efficiency, considered as an element in the value following Holbrook's proposal (1999), evaluated through two indicators: a specific one for the organization's staff (which Sweeney and Soutar (2001) consider is a deciding factor in the perception of value) and another in relation to the

I. Gil et al. / Industrial Marketing Management 37 (2008) 921939 Table 1 Factorial analysis suitability indicators, rotated components matrix and factor specification on the scales SE scale Components 1 I1 I2 I3 I4 I5 I6 I7 I8 I9 I10 I11 I12 I13 I14 I15 I16 I17 I18 Factor specification Cronbach's alpha 0.141 0.250 0.763 0.687 0.674 0.709 0.579 0.551 0.114 0.212 0.303 0.406 0.372 0.257 0.154 0.226 0.203 0.285 F1: FACASSIST 0.8516 2 7.049E 02 0.185 6.077E 02 0.239 0.209 9.534E 02 0.379 0.299 0.841 0.783 0.735 0.518 0.185 0.208 0.321 0.171 0.117 0.342 F2: FACREG 0.8676 3 0.141 4.940E 02 0.228 0.164 0.406 0.228 1.85E 02 0.249 0.320 0.366 0.121 0.230 0.625 0.790 0.771 0.689 0.172 0.223 F3: FACDOCDEL 0.8505 4 0.116 8.537E02 0.256 0.285 5.217E02 2.836E02 0.188 0.144 0.101 0.156 0.158 0.298 0.223 6.652E02 8.146E02 0.372 0.820 0.724 F4: FACDEPSET 0.7340 5

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0.880 0.834 0.184 0.106 6.896E02 0.205 0.162 5.253E02 0.106 6.869E02 0.138 0.160 0.225 1.402E02 4.741E02 0.151 0.204 1.282E04 F5: FACTELSERV 0.7779

Alpha: 0.9247; correlations between variables: significant (p = zero or close to zero in almost all cases); correlation matrix determinant: 3.588E 05; 2:1905.463; degrees of freedom: 153; Bartlett's Test: 0.000; KaiserMeyerOlkin index: 0.911. SV scale Components 1 V1 V2 V3 V4 V5 V6. V7 V8 V9 V10 Factor specification 0.814 0.812 0.823 0.785 0.800 0.835 0.633 0.704 0.798 0.598 F1:SV

Alpha: 0.9089; correlations between variables: significant (p = zero or close to zero in almost all cases); correlation matrix determinant: 1.952E 03; 2:1178.115; degrees of freedom: 45; Bartlett's test: 0.000; KaiserMeyerOlkin index: 0.916. JS scale Components 1 S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 6.923E 02 0.183 0.763 5.874E 02 0.426 0.181 0.213 0.168 0.306 0.435 0.668 0.170 0.336 2.47E 02 0.109 5.787E 02 0.176 0.228 2 0.180 6.849E02 7.966E02 0.149 0.304 6.310E02 9.925E03 8.940E02 6.585E02 0.118 5.739E02 0.803 0.148 8.948E02 7.070E02 0.848 0.182 0.829 3 0.144 0.292 8.307E 02 0.191 0.239 0.270 0.325 0.255 0.205 0.442 0.169 4.720E 02 0.480 0.719 0.788 7.984E 02 0.817 0.160 4 0.839 0.834 0.245 0.404 8.86E 02 0.182 0.101 0.187 0.753 0.326 7.099E 02 1.068E 02 0.197 0.224 0.192 1.846E 02 0.105 0.139 5 0.151 0.149 0.255 0.623 0.421 0.763 8.699E 02 7.252E 02 0.103 0.437 0.300 0.103 0.593 0.247 0.112 0.112 7.86E04 1.29E03 6 0.110 0.160 3.45E02 0.383 0.143 2.337E02 0.801 0.833 4.451E02 0.198 0.130 0.188 7.53E02 0.195 0.232 2.17E02 0.136 0.156 (continued on next page)

928 JS scale (continued ) Table 1 JS scale Components 1 S19 S20 S21 S22 S23 Factor specification Cronbach's alpha 0.691 0.662 0.363 0.723 0.100 SAP: satisfaction with provision 0.8744 2

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3 0.267 2.74E 02 9.670E 02 2.26E 02 1.113E 02 SAPAR: participation satisfaction 0.8238

4 7.337E 02 0.432 0.176 0.121 9.922E 02 IS: intrinsic work satisfaction 0.8744

5 0.230 0.170 3.34E02 0.345 8.638E 02 SIR: satisfaction with inter-personal relations 0.8073

6 0.329 0.204 1.118E02 7.020E02 0.268 SASU: satisfaction with supervision 0.8682

0.195 0.202 0.627 0.247 0.709 SAPE: satisfaction with physical working environment 0.8504

Alpha: 0.9155; Raju's : 0.8684; correlations between variables: significant (p = zero or close to zero in almost all cases); correlation matrix determinant: 1.150E07; 2: 998.646; degrees of freedom: 253; Bartlett's test: 0.000; KaiserMeyerOlkin index: 0.800. Those items in bold are the ones loading higher on each factor. An item was considered to load on a given factor if the factor loading obtained in the rotated factor matrix was 0.4 or greater.

service provided; and (4) value-for-money, defined according to the most classical proposals in the literature on value as perceptions of the relation service quality/price, capturing the cognitive or rational component of the relation's perceived value. Satisfaction with the service provider (SP) was measured overall, from a single-item scale following the conceptual proposal by Anderson, Fornell, and Lehmann (1994). This proposal is consistent with contributions, among others, from Cronin and Taylor (1992), Bei and Chiao (2001), Jones and Suh (2000), Yu and Dean (2001), and Maxham and Netemeyer (2003), and in particular from Angur, Nataraajan, and Jahera (1999), in the sphere of the banking industry. Overall satisfaction was evaluated on a 10 point scale (SC). To measure job satisfaction of service employees (JS), there is a particularly interesting measurement proposal from Meli and Peir (1989) who designed a set of instruments (S4/82; S20/ 23, S10/12 and S21/26) with notable psychometric characteristics which could be selected according to the context in which the questionnaire was administered. Questionnaire S20/23 with 23 items was considered appropriate (see the Appendix). The psychometric properties of this scale were contrasted in later studies (e.g. Gil, Berenguer, Cervera, & Moliner, 2005), confirming their usefulness, reliability and validity. Given that some of the scales and the items were created in English, and they have been tested in a different language context, to ensure the validity of the item translation, a translate/ back translate procedure (Brisles, 1970; Laroche, Papadopoulos, Heslop, & Bergeron, 2003) was used. Finally, the classification variables such as gender, age, level of training, length of time in the company, department or type of contract with the organization, makes it possible to identify employee profile. 4. Analysis of data and discussion of the results We carried out different procedures to examine the psychometric properties of the proposed measurements. The items in the different scales were analyzed on the basis of procedures recommended in the methodology on scale design for evaluating marketing constructs (Churchill, 1979; Diamantopoulos &

Winklhofer, 2001; Judd & McClelland, 1998), and, where appropriate, of applying principal components analysis (hereinafter referred to as PCA) and confirmatory factor analysis (CFA). Reliability analysis, understood as internal consistency, was carried out by calculating Cronbach's coefficient and using measurements which relate each isolated item (item-total correlation and inter-item correlation). In the Service Encounter (SE) scale, the statistics analyzed confirm scale properties, and the items appear to show correct behavior and the measurements and typical deviations for each item appear approximately equal. Correlations of the indicators with respect to the total are moderate or high and positive in all cases. Finally the coefficient reaches a value of 0.9247, which is a good result, showing score stability and internal consistency. The structure of the relations between the variables in the scale was verified by PCA with orthogonal rotation using the VARIMAX method. The application of this statistical technique to our data, was supported by different criteria based on the correlation matrix. Both the KMO value (above 0.9) and Bartlett's test of Sphericity (p below the critical level of 0.01), indicate it is appropriate to develop a PCA. The results show there are five factors which coincide with the 5 stages defined, explaining 70.504% of the variance (see Table 1). The first factor which emerges can be considered as the preparation/assistance with the signature phase, it accounts for 19.15% of the variance and groups six indicators on assistance with preparing the signature, staff training, analysis of register viability, mistakes in preparing the signature, information prior to the signature and speed of any modification. The second and third factors describe respectively the registration/processing process and the documentation delivery phase and account for 15% of the variance. The contents of the four indicators in the second factor are related to the information, time used and the response to any event during deed processing. The contents of the indicators for the third factor relate to correct documentation, the form and method of delivering documentation and the time elapsing between the date it is dispatched and received. The fourth factor includes two items which explain 9% of the variance and refer to the study for the coverage of funds and the settlement sheet and has been termed settling the deposit. Finally we can identify

I. Gil et al. / Industrial Marketing Management 37 (2008) 921939 Table 2 CFA results of measures CFA results of measures for JS scale Items S3 S11 S19 S20 S22 S12 S16 S18 S21 S23 S14 S15 S17 S1 S2 S9 S4 S6 S13 S7 S8 (JS) 0.59 0.66 (5.54) 0.75 (5.85) 0.84 (6.21) 0.76 (5.67) 0.63 0.76 (7.76) 0.95 (4.99) 0.74 (4.34) 0.56 (4.97) 0.75 0.85 (6.15) 0.76 (5.28) 0.8 0.92 (9.57) 0.79 (9.39) 0.45 0.74 (3.10) 0.91 (2.92) 0.86 0.90 (7.60) R2 0.35 0.46 0.56 0.71 0.63 0.40 0.57 0.89 0.54 0.31 0.57 0.71 0.57 0.64 0.85 0.62 0.30 0.55 0.82 0.81 0.62 Reliability Composed reliability = 0.8504 AVE = 0.5358 Factor SAP: satisfaction with provision

929

Composed reliability = 0.8524 AVE = 0.5440

SAPE: satisfaction with physical working environment

Composed reliability = 0.8286 AVE = 0.6178

SAPAR: participation satisfaction

Composed reliability = 0.8751 AVE = 0.7014

IS: intrinsic work satisfaction

Composed reliability = 0.7568 AVE = 0.5265

SIR: satisfaction with inter-personal relations

Composed reliability = 0.8428 AVE = 0.7284

SASU: satisfaction with supervision

Discriminant validity

Correlation2 SAPSAPE = 0.2570 SAPSAPAR = 0.1739 SAPIS = 0.3226 SAPSIR = 0.4045 SAPSASU = 0.2285 SAPESAPAR = 0.1163 SAPEIS = 0.1102 SAPESIR = 0.1399 SAPESASU = 0.0936 SAPARIS = 0.3169 SAPARSIR = 0.3844 SAPARSASU = 0.3306 ISSIR = 0.3114 ISSASU = 0.2116 SIRSASU = 0.1459

Chi-squared (174) = 206.43 p = 0.04; GFI = 0.806; CFI = 0.947; RMSEA = 0.053; BB-NNFI = 0.935; BB-NFI = 0.795 CFA results of measures for SE scale Items I3 I4 I5 I6 I7 I8 I9 I10 I11 I12 I13 I14 I15 I16 I17 I18 I1 I2 Discriminant validity (SE) 0.79 0.77 (10.86) 0.75 (10.38) 0.67 (9.13) 0.61 (7.36) 0.63 (7.83) 0.72 0.78 (17.69) 0.75 (9.98) 0.78 (9.92) 0.77 0.75 (12.07) 0.76 (11.12) 0.79 (10.34) 0.69 0.85 (8.21) 0.73 0.87 (6.79) R2 0.62 0.56 0.56 0.47 0.39 0.40 0.52 0.59 0.56 0.60 0.59 0.56 0.60 0.59 0.47 0.716 0.53 0.76 Correlation2 FACASSISTFACREG = 0.4651 FACASSISTFACDOCDEL = 0.4277 FACASSISTFACDEPSET = 0.3819 FACASSISTFACTELSERV = 0.2873 FACREGFACDOCDEL = 0.4583 Chi-squared (125) = 174.03 p = 0.002; GFI = 0.897; CFI = 0.969; RMSEA = 0.046; BB-NNFI = 0.961; BB-NFI = 0.900 FACREGFACDEPSET = 0.5595 FACREGFACTELSERV = 0.2285 FACDOCDELFACDEPSET = 0.4624 FACDOCDELFACTELSERV = 0.1616 FACDEPSETFACTELSERV = 0.1475 Reliability Composed reliability = 0.8561 AVE = 0.5003 Factor FACASSIST

Composed reliability = 0.8398 AVE = 0.5675

FACREG

Composed reliability = 0.8499 AVE = 0.5863

FACDOCDEL

Composed reliability = 0.7422 AVE = 0.5929 Composed reliability = 0.7845 AVE = 0.6472

FACDEPSET FACTELSERV

930 Table 2 (continued ) Discriminant validity CFA results of measures for SV scale Items V1 V2 V3 V4 V5 V6 V7 V8 V9 V10 (SV) 0.76 0.80 (12.65) 0.80 (11.28) 0.78 (9.98) 0.75 (10.02) 0.66 (9.76) 0.56 (7.18) 0.78 (17.87) 0.59 (9.33) 0.78 (15.10)

I. Gil et al. / Industrial Marketing Management 37 (2008) 921939

R2 0.57 0.63 0.64 0.61 0.57 0.43 0.31 0.61 0.34 0.61

Reliability Composed reliability = 0.9182 AVE = 0.5323

Factor SV

Chi-squared (35) = 49.78 p = 0.031; GFI = 0.939; CFI = 0.983; RMSEA = 0.051; BB-NNFI = 0.977; BB-NFI = 0.952. Note: loadings are significative at 99%.

telephone service which accounts for 9% of the variance, a value very close to factor four. As shown in Table 1, the coefficient in the factors varies between 0.73 and 0.86. After defining the factors and studying their internal consistency, we proceed to analyze the validity of the proposed scale. In our opinion, the measurement verifies content validity as the domain of the construct has been specified and all the possible dimensions and contents for the concept under analysis have been considered. On the same lines, we can also state the nomological validity of the scales using Pearson's correlations between scale items and the overall evaluations for each of the five stages (item-test correlation) through IGi indicators. As the Service Value (SV) scale was defined as additive, four basic aspects were considered (Hair, Anderson, Tatham, & Black, 1999): (1) conceptual definition; (2) dimensionality; (3) reliability; and (4) validity. In terms of conceptual definition, in our proposal there is a correspondence between the individual items and the concept, as shown in the literature review. In relation to dimensionality, the scale shows a unidimensional behavior achieving an explained variance of 58.417 (see Table 1). The third underlying assumption is reliability, in this sense, the relation statistics of each item with the other items behave correctly. Item correlation with respect to the total is high in all cases. The coefficient shows the test's high internal consistency, with a value of 0.9089. Finally in relation to scale validity, the scale shows high criteria or concurrent validity as the correlation matrix between items and a single-item criterion external to the test which we call GV (Global Value) were all positive and neither very high nor very low. Correlation of the resulting sum scale with the item GV makes it possible to confirm concurrent validity of the SV scale. Finally, nomological validity, observed by correlating SV with the SE scale is verified for both scales. In relation to customer satisfaction, the correlation coefficient was calculated between items for the evaluation of each stage and the overall evaluation, with significant correlations in all cases. Finally, the multi-item scales of job satisfaction of service employees (JS) used were defined as additive, and checked for concept, reliability, dimensionality and validity (Hair et al., 1999:105106). The job satisfaction of service employees JS scale was found to be satisfactory in terms of reliability. Relational statistics showed correct behavior for all the items, with moderate to high, positive correlations in all cases with

respect to the total. Internal scale consistency measured by Cronbach's alpha was 0.9155 which is very close to the 0.92 obtained by Meli and Peir. A principal components analysis (PCA) was performed to analyze scale components with orthogonal rotation using the VARIMAX method. Application of this statistical technique to our data was supported by correlation matrix based criteria. As Table 1 shows, the 23 items were grouped into six factors explaining 72.560% of the total variance, using latent root criteria. The first component which clearly emerges relates five items explaining 15.047% of the variance and is known as satisfaction with provision SAP. The second factor which can be termed satisfaction with the physical working environment SAPE, accounts for 11.588% of the variance explained, grouping five items. The third factor, participation satisfaction SAPAR, includes three items which explain 7.707% of the variance. The fourth factor accounts for 6.552% of the variance and has been called intrinsic work satisfaction IS. Two final factors emerge, the fifth factor which accounts for 5.5% of the variance and a sixth factor accounting for 5.2% of the variance, both have two items each, denominated respectively as satisfaction with inter-personal relations SIR, and satisfaction with supervision SASU. The internal consistency of the set of items used to evaluate each type of job satisfaction of service employees, defines an alpha in the factors which oscillates between 0.80 and 0.87. If the small number of items in each factor is taken into account, reliability can be considered excellent. For each factor, correlations between the different indicators item-total were greater than 0.5 in all cases. Once the exploratory factor structure of the scales was delimited, we proceeded to confirm the obtained factors through confirmatory factor analysis (CFA). The measurement model estimation was performed with the Robust Maximum Likelihood Method using the asymptotic variancecovariance matrix and with the EQS 6.1 software package. We firstly calculated the internal consistency of the dimensions that compose each scale, considering simultaneously two indicators: composed reliability coefficient whose minimum threshold value is 0.7 (Anderson & Gerbing, 1988; Bagozzi & Yi, 1988), and the extracted variance in each scale whose value must exceed 0.5 (Fornell & Larker, 1981). These indexes, all of them shown in Table 2, proved to be acceptable for all factors obtained.

I. Gil et al. / Industrial Marketing Management 37 (2008) 921939 Table 3 Analysis of the association between interactions in the episode and service value Regression equation 1: SE SV Independent F1: variables FACASSIST F2: FACREG F3: F4: F5: Constant FACDOCDEL FACDEPSET FACTELSERV 1.617 (8.842) 0.349 0.839 (4.587) 0.181 R R2 Standard F model R2 corrected error 2.54019

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Durbin Watson

2.468 1.765 1.628 (13.498) (9.653) (8.906) 0.533 0.381 0.352

44.146 0.841 0.707 0.699 (242.062)

90.780 1.814

Significance less than or equal to 0.01; significance less than or equal to 0.05 but greater than 0.01; significance less than or equal to 0.10 but greater than 0.05. Student's absolute t statistic value is shown in brackets under the respective estimated parameter which represents the non-standardised coefficient. The value which appears below the t statistic is the standardised coefficient.

Taking into account the global result obtained, we can state that there is a sufficient level of internal consistency in the items, what means that the ability of the set of items employed to represent each of the latent constructs is satisfactory. Finally, construct validity (convergent and discriminant validity) of the scales was analyzed. In the case of the unidimensional scale SV, convergent validity can be stated as all its variables are associated to significant and high loadings at least at 95% (t N 1.96). In the case of the multi-dimensional scales, (SE and JS scales), convergent validity was corroborated given that, apart from the significant loadings obtained, correlations among different dimensions loading on a second latent factor proved to be significant at 95%. Therefore, it can be stated that scales have convergent validity (Anderson & Gerbing, 1988). Discriminant validity, which means that each factor represents a separate dimension, was analyzed through lineal correlations or standardised covariances among latent factors. These values showed evidence of discriminant validity given that they showed values well below the unit. Furthermore, it was verified that extracted variance in each of the dimensions was higher than square correlations (Table 2). It can be stated therefore that constructs show discriminant validity (Fornell & Larcker, 1981). After the above analysis it can be concluded that factors are stable, corroborating the exploratory structure, and dimensions show validity, so they can therefore be retained for theory testing. Given the global results obtained on the quality of the measures, we can state that the subscales employed in our questionnaire are validated. At a global level, other indexes for corroborating the goodness of fit of the model provided satisfactory results (Chi-squared; RMSEA b 0.08; GFI close to or higher than 0.9; Bentley Bonnet normed and non-normed (1990) indexes BB-

NFI, BB-NNFI close to or higher than 0.9; and Compared Fix Index CFI N 0.9 for all subscales). After analyzing measurement accuracy, regression analysis with mediation was used to contrast the hypotheses on the links between the constructs analyzed. Regression analysis has sometimes been used to evaluate the predictive capacity of service quality measurements (Angur et al., 1999) or to research the influence of perceived price and service quality on satisfaction (Mittal & Lassar, 1996; Novack, 1997) and on loyalty (Bei & Chiao, 2001; Lee & Cunningham, 2001; Zeithaml, Berrry, & Parasuraman, 1996), to determine the moderating role of value in satisfaction (Caruana et al., 2000) and that of satisfaction on loyalty (De Ruyter & Bloemer, 1999). Modelling including mediation processes is common in social psychology, other previous research focused on variables in relation to satisfaction have recently applied this methodology with success (e.g. Bei & Chiao, 2001; Gil et al., 2005; Maxham & Netemeyer, 2003). In general, a variable can be defined as a mediator to the extent that it influences the relation between the predictor and the criterion. When the measurement model involves latent constructs, modelling through structural equations provides the basis for the data analysis strategy. If the measurement model only involves measured variables, the basic analytical approach is multiple regression (Kenny, Kashy, & Bolger, 1998). Whatever data analysis method is used, the steps required to test mediation are the same. In accordance with Baron and Kenny (1986:1177), three regression equations should be estimated to contrast mediation: first the mediator is regressed on the independent variable, second, the dependent variable is regressed on the independent one and, third, the dependent variable is regressed on both the independent variable and the mediator. These three equations are the basis for observing relations in a mediation model under the following

Table 4 Analysis of the association between interactions in the episode and customer satisfaction Regression equation 2: SE SC Independent variables F1: FACASSIST 0.274 (5.657) 0.305 F2: FACREG 0.335 (6.917) 0.372 F3: FACDOCDEL 0.206 (4.252) 0.229 F4: FACDEPSET 0.330 (6.809) 0.367 F5: FACTELSERV 0.173 (3.573) 0.192 Constant 5.585 (177.582) R 0.675 R2 0.455 R2 corrected 0.441 Standard error 0.6733 F model 31.411 Durbin Watson 1.834

Significance less than or equal to 0.01; significance less than or equal to 0.05 but greater than 0.01; significance less than or equal to 0.10 but greater than 0.05. Student's absolute t statistic value is shown in brackets under the respective estimated parameter which represents the non-standardised coefficient. The value which appears below the t statistic is the standardised coefficient.

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I. Gil et al. / Industrial Marketing Management 37 (2008) 921939

Table 5 Analysis of the association between interactions in the episode, service value and customer satisfaction Regression equation 3: SE SC Independent SV variables F2: F1: FACASSIST FACREG F3: F4: F5: Constant FACDOCDEL FACDEPSET FACTELSERV 0.154 (3.093) 0.171 n.s. R R2 Standard F model R2 corrected error 0.6391 Durbin Watson

0.109 n.s. (9.404) 0.561

0.143 n.s. (2.834) 0.159

3.769 0.710 0.504 0.496 (7.332)

64.338 1.905

Significance less than or equal to 0.01; significance less than or equal to 0.05 but greater than 0.01; significance less than or equal to 0.10 but greater than 0.05. Student's absolute t statistic value is shown in brackets under the respective estimated parameter which represents the non-standardised coefficient. The value which appears below the t statistic is the standardised coefficient.

conditions: first, the independent variable must affect the mediator in the first equation; second the independent variable must affect the dependent variable in the second equation; and third, the mediator must affect the dependent variable in the third equation. If all the conditions are verified in the predicted direction, then the effect of the independent variable on the dependent one must be less in the third equation than in the second. Perfect mediation occurs if the independent variable loses its influence when the mediator is included in the equation (Kenny et al., 1998:260). In this case, the influence of the independent variable on the dependent variable disappears completely in the presence of the supposedly mediating variable (Chumpitaz & Vanhamme, 2003:81). Thus, to examine whether the proposed hypotheses are fulfilled and the mediating effects associated with the sequence SE SV CS, first we regressed the variables related to service value (mediator), to the predictive variables related to service encounter. Thus, the regression 1 equation in Table 3 analyses the effect of the independent variable service encounter on the mediators in service value. As can be seen, service encounter dimensions significantly and positively affect service value. Thus, the first mediation condition has been satisfied for most of the variables, verifying H1. Secondly, we regress service encounter dimensions (predictive variables) to overall satisfaction. The regression 2 equation in Table 4 shows that service encounter dimensions significantly and positively affect overall satisfaction. The second mediation condition can therefore be said to be fulfilled, as the predictive variable affects the dependent variable. The third and fourth mediation conditions are observed in the same regression equation, as the dependent variable is regressed

on both the mediator and the predictors. As in the above sections, we carry out multiple linear regression analysis. The first variable to enter is service value (SV) followed by factor 4 and factor 2 from the scale interactions in the episode, excluding the other factors from the model as they are not significant. For the entire mediation to be statistically supported, the effects of the predictive variable in the dependent variable must not be significant, dominated by the mediator. However, as we have already indicated, complete mediation is not very common in the social sciences (Baron & Kenny, 1986; Maxham & Netemeyer, 2003) and in this context it is considered that partial mediations can support a mediation hypothesis (Kenny et al., 1998). Thus when the effects of the predictive variables in the dependent variable decrease in equation 3 (dominated by the mediator) with regard to those obtained in equation 2 (not dominated by the mediator), mediation is supported (see Table 5). In regression equation 3, the mediator is significant and in addition the beta coefficients for the predictive variables (the factors which define interactions 2 and 4 which have been significant) are smaller than regression equation 2 (its value decreases from 0.367 to 0.171 in FACPROCEL and from 0.372 to 0.159 in FACASSIST) and its significance decreases from 0.01 to 0.05 (Liu, Luo, & Shi, 2002). Thus the effect of the interactions on satisfaction diminish in size and significance when service value is controlled in the regression. Service value is shown as a mediator which significantly decreases the relation between the dependent and independent variable rather than eliminating it. Finally, in the last model, tolerance, i.e. the proportion of variance in each predictive variable not explained by the other predictive variables takes values close to 0.8 and the inverse, the variance inflation factor (VIF), takes values close to 1.2 which

Table 6 Values measured by department in the measures of job satisfaction which show different perceptions Department Job satisfaction (JB) SAP: satisfaction with provision Average 3.84 2.61 2.72 2.42 3.44 2.75 Standard deviation 0.40 0.67 0.96 0.88 0.88 0.83 SAPAR: participation satisfaction Average 3.46 2.95 3.53 2.66 3.76 3.54 Standard deviation 0.83 0.71 1.06 0.56 0.78 0.61 IS: intrinsic work satisfaction Average 4.00 3.43 4.25 3.25 3.65 3.31 Standard deviation 0.61 0.78 0.63 0.85 0.81 0.65 SIR: satisfaction with inter-personal relations Average 4.50 3.67 4.25 3.06 3.80 4.00 Standard deviation 0.50 0.99 0.82 0.62 0.58 0.75

Average Reception Authorization Signings Tax liquidation External relations Verification and control of documentation 3.97 3.18 3.63 2.97 3.74 3.33

Standard deviation 0.49 0.48 0.55 0.49 0.64 0.44

I. Gil et al. / Industrial Marketing Management 37 (2008) 921939 Table 7 Analysis of the associations between interactions in the episode and service value according to the level of job satisfaction of service employees Independent F1: variables FACASSIST 2.721 (11.145) 0.571 JS LOW 2.449 N = 67 (8.645) 0.524 TOTAL 2.468 SAMPLE (13.498) N = 194 0.533 Difference t = 0.7758 analysis JS HIGH N = 127 F2: FACREG 1.229 (5.290) 0.270 2.549 (8.987) 0.540 1.765 (9.653) 0.381 t = 3.7058 F3: F4: FACDOCDEL FACDEPSET 1.605 (6.687) 0.337 1.603 (6.103) 0.358 1.628 (8.906) 0.352 t = 0.0057 1.263 (5.282) 0.266 2.008 (7.592) 0.450 1.617 (8.842) 0.349 t = 2.1325 F5: Constant FACTELSERV 0.657 (2.902) 0.147 1.052 (3.588) 0.211 0.839 (4.587) 0.181 t = 1.0915 R R2 Standard F model R2 corrected error 2.4998

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Durbin Watson

44.181 0.834 0.695 0.683 (193.081) 43.941 0.889 0.791 0.774 (141.413) 44.146 0.841 0.707 0.699 (242.062)

55.175 1.608 46.188 2.376 90.78

2.3589

2.54019

1.814

Significance less than or equal to 0.01; significance less than or equal to 0.05 but greater than 0.01; significance less than or equal to 0.10 but greater than 0.05. Student's absolute t statistic value is shown in brackets under the respective estimated parameter which represents the non-standardised coefficient. The value which appears below the t statistic is the standardised coefficient.

denotes little co-linearity with no redundant or superfluous variable. Overall, the results support the idea that service value partially mediates the links between SE and SC. Thus, it can be seen that: (1) variations in the perceptions of interactions significantly influence variations in the levels of perceived service value. Institutional customer perceptions of the technical and functional characteristics of the encounter cascade therefore do directly affect service value; (2) variations in the perceptions of the interactions significantly influence variations in satisfaction levels, with a partially mediated effect through service value and (3) variations in service value significantly influence satisfaction. Thus including service value in the model intensifies its power of explanation as it supplies information on how and why the interactions affect satisfaction. Thus, partial mediation has been supported and H2H3 confirmed.

After studying the behavior of the mediating variable, we then studied the effect of the service encounter on service value and customer satisfaction to see if it was modified according to the level of job satisfaction of service employees. The variable job satisfaction of service employees shows differences both overall and by satisfaction components, except for intrinsic satisfaction and satisfaction with the physical environment, according to the department the employee belongs to. Table 6 shows the basic descriptives for these variables. The highest averages in these departments are observed in satisfaction with relations and the lowest for satisfaction with benefits and participation. The tax liquidation department shows the lowest levels of satisfaction while overall the most satisfied employees are in reception and signing. All these results show that employee perceptions differ according to the department where they work and that means we can focus on the

Table 8 Analysis of the association between interactions in the episode, service value and customer satisfaction in situations of high and low job satisfaction of service employees Regression equation 2: SE SC F2: Independent F1: variables FACASSIST FACREG JS HIGH N = 127 JS LOW N = 67 0.324 (4.481) 0.381 0.251 (3.602) 0.260 0.440 (6.074) 0.513 0.282 (4.259) 0.306 F3: F4: F5: SV FACDOCDEL FACDEPSET FACTELSERV 0.218 (3.251) 0.268 0.198 (2.897) 0.206 0.323 (4.780) 0.397 0.334 (4.898) 0.347 0.187 (2.497) 0.206 10.170 (2.626) 0.187 Constant R R2 Standard F model R2 corrected error 0.6025 Durbin Watson

8.541 0.767 0.538 0.550 (107.634) 8.610 0.629 0.396 0.371 (131.889)

17.433 2.009 15.858 2.032

0.7132

Regression equation 3: SE SC JS HIGH n.s. 0.137 N = 127 (2.110) 0.149 JS LOW n.s. n.s. N = 67

n.s.

n.s.

0.195 n.s. (2.894) 0.202 n.s. n.s.

0.108 (7.174) 0.532 0.135 (8.905) 0.741

3.828 (5.714) 2.625 (3.955)

0.682 0.465 0.452

0.6656

35.648

2.032

0.741 0.550 0.543

0.6105

79.298

1.730

Significance less than or equal to 0.01; significance less than or equal to 0.05 but greater than 0.01; significance less than or equal to 0.10 but greater than 0.05. Student's absolute t statistic value is shown in brackets under the respective estimated parameter which represents the non-standardised coefficient. The value which appears below the t statistic is the standardised coefficient.

934 Table 9 Analysis of average differences in the groups

I. Gil et al. / Industrial Marketing Management 37 (2008) 921939

JS high I1. Waiting time before the switchboard takes your call I2. Waiting time before being able to speak to the appropriate person IG1. Overall evaluation of the telephone service I3. Service provided during preparation of the signing I4. Preparation and technical training of the staff I5. Pre-authorization or legal report with analysis of register viability I6. Mistakes or errors in preparing the signing I7. Information provided before the signing I8. Speed of attending to any last minute change or modification IG2. Overall evaluation of in-company service I9. Information provided during processing the deeds I10. Information provided in the operations processed I11. Time used in the processing phase I12. Response to any event IG3.Overall evaluation of behavior in the processing phase I13. Accuracy in the documents we deliver I14. Form of delivering documentation (packaging, order, etc.) I15. Method of delivering documentation I16. Period between the date of dispatch and reception IG4.Overall evaluation of documentation delivery I17. Coverage of funds study I18. Settlement sheet IG5.Overall evaluation of the liquidation phase V1. Reliability V2. Professionalism V3. Shows interest V4. Rapid response V5. State of the art management services V6. Trust V7. Problem solving V8. Efficient service provision V9. Efficient staff V10. Quality/price relation Significance less than or equal to 0.05. 4.34 4.14 4.40 4.36 4.53 4.33 4.39 4.28 4.37 4.24 4.23 4.20 3.96 4.38 4.23 4.37 4.41 4.28 4.14 4.31 4.10 4.30 4.29 4.62 4.63 4.52 4.47 4.29 4.64 4.39 4.39 4.57 3.95

JS low 4.36 4.30 4.52 4.17 4.29 4.15 4.31 4.23 4.30 4.17 4.15 4.18 3.86 4.36 4.19 4.45 4.45 4.36 4.20 4.41 4.09 4.02 4.08 4.51 4.57 4.49 4.43 4.27 4.47 4.26 4.32 4.52 3.69

perceptions of employees in the authorization department, the one with the maximum responsibility for providing the service being studied. Thus for each customer request there is an employee in that department who monitors the different stages of the service and acts as contact employee, in other words as the service's front-line employee for the customer. In this context and in the light of the literature review, we understand that the attitudes expressed by these employees could influence customer perception of the value of the service provided. Thus we went on to examine whether job satisfaction of service employees is a moderating variable for the relation defined between the interactions in the episode and service value. In this way, we established dyadic relations between these employees and the banks involved in the analysis. There are different analytical procedures for testing moderation. Moderation implies that the causal relation between two variables changes according to the moderating variable. The statistical procedure should therefore measure and test the differential effect of the dependent variable on the independent one as a function of the moderator. The channel for comparing and

measuring this effect depends in part on the measurement level for the independent variable and the moderating variable. In our research scenario, we considered it appropriate to distinguish between employees with the highest satisfaction scores and those with the lowest, defining two groups of employees: those above average and those below average. Thus in overall job satisfaction of service employees we differentiate two levels and, following Baron and Kenny (1986), we measure the effect of the independent variable on the dependent variable through nonstandardised regression coefficients. We then test the difference between these coefficients (see Cohen & Cohen, 1983). The result was a group of 127 banks which work with the employees we have named as more satisfied and a second group of 67 banks working with those less satisfied. After identifying the groups the objective is to observe whether the associations between the predictive variables and the criterion are significantly different. Table 7 shows the relations between the variables for the two levels of job satisfaction of service employees identified by regression analysis. Following Sharma and Patterson (2000) we first contrasted the two groups using Chow's test. Chow's test shows that the forms and slopes of the two regression models are significantly different, the value of the statistic F = 3,2534 N F(6,182) at 0.05 means that H0 on structural stability can be rejected while also verifying that the dependent variable service value is explained in a significantly different way in both models. Chow's test evaluates whether there are global differences in intra-group parameter values but it does not evaluate the significance of the individual estimated parameters. The statistically significant differences between the individual regression coefficients were analyzed using tests recommended by Cohen and Cohen (1983). The analyses used to investigate the significance of the differences in the defined regression coefficients in the two groups (see the last row in Table 7) identify differences in the regression coefficients associated to the perceptions of the bank in the stages identified by process of registering/processing and settlement of the deposit. Observation of the corresponding estimated parameters shows that both interactions have a lower impact on service value in the banks with more satisfied employees than in those with less satisfied employees, thus confirming the moderating character of job satisfaction of service employees and consequently H4. Note that these factors were the ones which showed direct effects on overall customer satisfaction, which suggests that in the two groups, service value contributes different explanations for overall customer satisfaction. A regression analysis with mediation was then considered for both groups. Table 8 shows the last regression model for the two mediation assumptions, and it can be seen that for the group with low job satisfaction, service value completely mediates the effect of interactions on overall satisfaction while in the situation of high job satisfaction there are direct effects on factors 2 and 4 in global satisfaction. This second sequence is identical to the behavior observed overall. The global statistics for each of the groups (Table 9) in the variables in scales SE and SV, show that banks with more satisfied contact employees perceive slightly higher levels of service value in all the indicators, with higher perceptions of

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service value and in general more positive perceptions with regard to the interactions in the episode. A t test on the averages for the technical and functional characteristics which describe each service stage shows that the service provided during the preparation of the signing, the report and the preparation and training for staff providing the service to the bank are significantly different in the two groups, with a lower value in the group of employees with a lower level of job satisfaction. Thus, we can state that job satisfaction of service employees moderates the effect perceptions on the interactions in an episode have on service value, such that in situations of low job satisfaction the effect of the predictors process of registering/processing and settlement of deposit on the service value intensifies, with service value acting here as intervening variable. While in situations of high job satisfaction of service employees the interactions occurring in the relation episode affect overall customer satisfaction thus generating proof that high employee job satisfaction permits encounters with the bank that contribute to explaining satisfaction. 5. Conclusions and future lines of research For more than two decades, scientific research has dealt with the issues analyzed in this work the service encounter, service value, customer satisfaction and job satisfaction of service employees and some of the relations between them, occasionally in the scenario of B2B relations, with fruitful but not conclusive results (Yeung et al., 2002). We consider that this is therefore an opportunity to develop research which will help to further this line of study and at the same time respond to Parasuraman's (1998) call for research. In fact, as pointed out in the introduction to this paper, the literature in general has shown a predominant focus on consumer services rather than business services, but fundamental differences between B2B and B2C marketing invite for specific research in this area. Moreover, changes in the economy, with the growing importance of both business related services and professional services gives rise to specifically developing research in this area. From a conceptual point of view, the contributions of this study relate to the definition conceptualization and operationalization of the constructs analyzed and empirical analysis of the relation between all the proposed concepts. We consider that the definition and operationalization of perceived value is of particular interest. The literature review has established the basic proposition that value can be defined on the basis of quality, incorporating another type of benefits and sacrifices. Furthermore, in the sphere of inter-organizational relations, the origin of the evaluations of this perceived value are to be found in the interactions between the service provider and the customer in each episode of the relation. The development of a measurement scale for this construct adapted to the context under study (Eriksson & Lofmark Vaghult, 2000) and, in this case, a B2B relation may be an interesting contribution. In the sphere of the relation between the concepts of value, customer satisfaction and job satisfaction of service employees throughout the service encounter, verification of the hypotheses has led to several conclusions.

Considering the service encounter as a dyadic provider customer interaction has provided a suitable framework for analyzing the contributions of perceptions from both collectives to service evaluation. Thus in the sphere of intermediation services for a mortgage, the stages in the service encounter have been defined and service value proved to be a variable which partially mediates the effect of the interactions in each episode on overall customer satisfaction. Perceptions concerning the encounter cascade generate direct, mediated effects through service value, on institutional customer satisfaction. Thus, the evaluation process originates in the interactions which take place in the relation episode and this suggests that this process can be better understood by including service value as a mediating variable in these perceptions and customer satisfaction. Furthermore, considering the encounter as dyadic underlines the determining role of the employee in service provision. The literature suggested the mirror of satisfaction concept to describe the relation between job satisfaction of service employees and customer satisfaction, establishing that satisfied employees perform their work better and contribute to increasing customer satisfaction levels. Thus the employee has a decisive role in service provision. If employees are part of a solid service culture and receive management support for delivering improved service to the client, this more positive experience may lead to increased job satisfaction of service employees and thus influence customer perceptions. Our hypotheses proposed analyzing whether employee job satisfaction moderated the existing relation between the perceptions which occur in the relation episode and service value. Empirical evidence found in the literature suggested that this relation is very weak and the results were not very conclusive and even the reverse and therefore analysis of the proposed relations was a research opportunity. The empirical results indicate that the level of employee job satisfaction for those in charge of monitoring the service being studied appears to moderate the relation between customer perceptions in episode interactions and service value. We can therefore suggest that a way of adding service value and increasing customer satisfaction is through employee job satisfaction. Finally, despite the fact that the objectives considered have been verified, this work presents a series of limitations which open lines for future research. Firstly, the use of just one company for the research invites a repeat study in other companies in the sector and in other service contexts in order to confirm or reject the relations found here. Replica studies are necessary to validate the scales used with larger, random samples. The non-randomness of the process for selecting the units for research and their limited size, generate reservations on generalizing the results. Secondly, cross-cultural approaches to the constructs analyzed would be interesting to check for differences in conceptualization and operationalization. Thirdly, the line of research opened provides the opportunity to observe how the constructs under investigation evolve with time. It may well be relevant to use longitudinal approaches for a better understanding of the dynamic behavior of the variables analyzed. Fourth, future research needs to be done on the links between variables analyzed and the expected relationships which turned out to be weaker.

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One important element for further research would be related to the importance of emotion and of the affective side in perceptions of relationships among providers and customers in industrial settings, as previously analyzed in bank customers by Barnes (1997). All these aspects underline the importance of front-line employees in the creation of value and satisfaction for customers as also proved in industrial settings, and, therefore, the critical nature of human resources management for companies, not only in consumer settings, but also in industrial spheres. Finally we should emphasize the need to try out new analytical methods to enrich and confirm the present results, both with regard to measurement capacity and the relations identified among them all. The problem of measurement in marketing has been approached with two main types of indexes (Diamantopoulos & Winklhofer, 2001): reflective and formative. This study was developed based on formative indexes which, because they are aggregates of simple items means there are no measurement errors and they can be incorporated directly into explanatory techniques such as the regression model. They cannot, however, recognize the existence of latent factors. A future line of research would therefore be to study alternative methodologies in-depth which make it possible to unite the capacities of both types of index such as for example specific developments of LISREL to incorporate formative indexes with latent variables. These developments, based on MIMIC models are very interesting and are a line of research to be followed. The problem with them and the reason why they were difficult to apply in this study is that a large sample size is needed to provide a robust approach to the multiple relations which emerge. Appendix A. Measurement scales in the model
SE. Service encounter Customer perceptions of technical and functional characteristics of the service provided by the provider organization, reflecting the service encounter cascade or interactions in a relation episode I1. Waiting time before the switchboard takes your call I2. Waiting time before being able to speak to the appropriate person I3. Service provided during preparation of the signing I4. Preparation and technical training of the staff I5. Pre-authorization or legal report with analysis of register viability I6. Mistakes or errors in preparing the signing I7. Information provided before the signing I8. Speed of attending to any last minute change or modification I9. Information provided during processing the deeds I10. Information provided in the operations processed I11. Time used in the processing phase I12. Response to any event I13. Accuracy in the documents delivered I14. Form of delivering documentation (packaging, order, etc.) I15. Method of delivering documentation I16. Period between the date of dispatch and reception I17. Coverage of funds study I18. Settlement sheet SV. Service value The advantages perceived in exchange for the charges borne (Berry and Yadav, 1997: 29) Judgments or evaluations of what the customer perceives he has received from the seller in a specific purchase or use situation (Flint et al., 2002: 103)

V1. The service provider is reliable V2. The service provider is professional V3. The service provider shows interest V4. The service provider responds quickly V5. The service provider has state of the art equipment and infrastructures and equipment in management services V6. I trust the service provider V7. The service provider solves problems for me V8. Efficiency of the service provided V9. The service provider's staff are efficient V10. Quality/price relation of the service they provide CS. Overall client satisfaction/IGi. Satisfaction by stages of service delivery This is a global evaluation based on total consumption experience (Anderson et al. 1994: 54; Fornell, 1992: 11). A global measurement of a set of satisfactions with specific previous experiences (Yu & Dean, 2001: 235) CS. Overall client satisfaction IG1. Telephone service IG2. In company service IG3. Behavior in the processing phase IG4. Documentation delivery IG5. The liquidation phase JS. Job satisfaction of service employees Positive, pleasurable emotional state resulting from the evaluation of one's own work or of one's employment experiences (Locke, 1969) S20/23 (Meli & Peir, 1989) S1. The job itself (in general). S2. The opportunity your job offers to do the things you do well S3. The salary you receive S4. The objectives. goals you must reach S5. The training opportunities offered by the company S6. Personal relations with your superiors S7. Supervision of your work S8. The proximity and frequency of that supervision S9. The chance to do things you enjoy in your job S10. The way your supervisors (or superiors) judge your work S11. Equality and Fairness in the way you are treated by the company S12. Physical environment and the space you have in your workplace S13. The support you receive from your superiors S14. The capacity for autonomous decisions on aspects of your job S15. Participation in the decisions made by your department or section S16. Lighting in your workplace S17. Participation in working group decisions concerning the company S18. Ventilation in your workplace S19. Opportunities for Promotion S20. The extent to which the company complies with the collective agreement. labor law and regulations S21. The temperature in the workplace S22. How negotiation on employment aspects is carried out in the company S23. Cleanliness and hygiene in the workplace.

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Yu, Y. T., & Dean, A. (2001). The contribution of emotional satisfaction to consumer loyalty. International Journal of Service Industry Management, 12(3), 234250. Zeithaml, V. A. (1984). Issues in conceptualising and measuring consumer response to price. Advances in Consumer Research, 11, 612616. Zeithaml, V. A. (1988, July). Consumer perceptions of price, quality and value: A means-end model and synthesis of evidence. Journal of Marketing, 52, 222. Zeithaml, V. A., Berrry, L. L., & Parasuraman, A. (1996, April). The behavioral consequences of service quality. Journal of Marketing, 60, 3146. Zeithaml, V. A., & Bitner, M. J. (2002). Marketing de Servicios. Un enfoque de integracin del cliente a la empresa, 2a Edicin. Mjico: Mc Graw Hill. Zurriaga, R. (1990). La satisfaccin laboral en profesionales sanitarios de organizaciones pblicas y privadas. Revista de Psicologa del Trabajo y de las Organizaciones, 6(16), 6773. Dr. Irene Gil. Professor in Marketing at University of Valencia (Spain). She has published at several international journals as the Annals of Tourism Research, The International Review of Retail, Distribution and Consumer Research, The International Journal of Retail and Distribution Management, among others. She has visited several universities like University of Paris I, Rennes I (France). Her research interests are customer orientation, services and retailing. Dr. Gloria Berenguer. Assistant Professor in Marketing at the University of Valencia (Spain). She has published different books about consumer behavior and several articles at national Spanish journals. Her research interests are consumer satisfaction, child as consumer and retailing. Dr. Amparo Cervera. Assistant Professor in Marketing at the University of Valencia (Spain). She is a member of the Emerald Literati Club. She has published at several international journals as the Journal of Product and Brand Management, European Journal of Marketing, Benchmarking: an International Journal, International Journal of Service Industry Management, among others. She has visited several universities like University of Birmingham (UK), Harvard University (USA). Her research interests are customer/market orientation, services and consumer behavior.