Impact Of Perceived Service Quality On Customer Satisfaction And Brand Loyalty
[A CASE STUDY OF HONEYWELL FLOUR MILLS PLC]

2.2.3.     Expectancy Theory: By Vroom (1964)
This theory is founded on the idea that people prefer certain outcomes from their behaviour, to others. They anticipate feelings of satisfaction should the preferred outcome be achieved. Thus, consumers are motivated to buy a product or service depending on the attractiveness of the product or service in providing some desired outcomes. For example, a person whose clothes are dirty seeks a detergent that will provide cleanness to the clothes. Cleanness is a desired outcome for the purchase of the detergent. If the desired outcome is achieved, satisfaction is ensured and the individual is favourably disposed to repurchase the detergent. Cleanness is a first level desired outcome; self-esteem could be a second level outcome because a person who wears clean clothes will be well regarded by his peers and the public.
Vroom called the satisfaction from the first level outcome, valence. He further stated that sometimes a first level outcome could lead to a second level outcome. When this happens, the first level outcome becomes an instrumentality for the second level outcome. Thus cleanness is an instrumentality to esteem.
Expectancy is the perception of people concerning the degree of probability that the choice of a particular action will actually lead to the desired outcome. Expectancy is the relationship between a chosen course of action and its predicted outcome. Thus the purchase of "OMO" detergent instead of "Elephant" is a result of expectancy or a perception that in all probability, “OMO” will give a higher cleanness to clothes, which will look fresh and win for the wearer, the respect of other people.
The customer's expectations are (probably) based on his past experience, advocacy of friends or relations and the manufacturers' advertisement. If the product meets the expectancy of the consumer, the consumer becomes satisfied and this results in repeat buying and building up of customer loyalty.
2.2.4.     Equity Theory of Motivation by Adams (1965)
This theory focuses on people's feelings of how fairly they have been treated in comparison with the treatment received by others. It is based on exchange theory. People evaluate their social relationships in the same way as buying or selling an item. People expect certain outcomes in exchange for certain contributions, or inputs. When the ratio of a person's total outcomes to total inputs equals the perceived ratio of other people's total outcomes to total inputs, there is equity. When there is an unequal comparison of ratios the person experiences a sense of inequity.
This theory is strongly established in business exchanges. A loyal customer of a bank will expect an overdraft or a loan facility from his/her bank when he/she is in need of extra cash. A trader who has a long tenure of business transactions with a manufacturing or merchandising concern will feel free to ask for a substantial discount or credit for his/her purchases. Equity theory is also illustrated with various promotional schemes executed by marketers, to reward loyal customers. It could be temporary price reductions, high volume pack sold at the price of smaller packs, gift items, club membership, free scholarship to children of customers, free tickets to social events like exhibitions, sports, dramas etc.
To generate a sense of equity in a loyal guest, an hotel will welcome him/her with a free drink or meal and may allow a late check-out without paying for the extra hours of using the room.
A feeling of inequity causes tension, which is an unpleasant experience. The presence of inequity therefore motivates the person to reduce or remove the levels of tension and the perceived inequity. A customer with this experience may reduce his/her input (purchases) or may simply defect to another organisation or product, which may in fact not be better than the one from, which he/he is divesting. On the other hand, if a customer perceives equity, he/she is delighted and continues to purchase the product or service and increases purchases if his/her needs get higher.