Market segmentation, service quality, and overall satisfaction: self-organizing map and structural equation modeling methods

In a service-dominant paradigm, service is the core of society and industry. This study explores the hierarchical roles of core service, facilitating service, and supporting service that affect customer satisfaction in the service industry. Cable TV services in Taiwan are employed as an example, because their penetration rate in is over 70% with customer experience for over 20 years. In this study, customers are first segmented by the self-organizing map (SOM) technique and then service quality is measured with SERVPREF method. A proposed model, derived from the service marketing literature, is tested with structural equation modeling (SEM). Finally, moderating effects of customer segments on the proposed SEM model are examined. Results show the SOM technique is a valid method for market segmentation. Additionally, the moderating effect of market segments may impact the evaluation of core service quality (CSQ) and overall satisfaction. Furthermore, CSQ determines overall satisfaction for heavy users, whereas facilitating service quality greatly influences younger consumers’ satisfaction.