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1 Introduction
Service recovery has become a key issue for companies in the competitive market place. According to [19] Oliver (2010), customers who experience service failure typically discuss the incident with ten other persons, while those not experiencing failure only tell five other persons about their positive experience. Moreover, effective service recovery is vital to maintain customer and employee satisfaction and loyalty, which in turn contribute significantly to a company's revenues, growth and profitability ([21] Parasuraman et al. , 2005; [2] Boshoff, 2005; [11] Heskett et al. , 2008). However, most customers are dissatisfied with how companies resolve their complaints, and most companies do not take advantage of the learning opportunities afforded by service failures ([20] Parasuraman and Grewal, 2000; [16] Marimon et al. , 2012; [23] Petnji et al. , 2013).
Furthermore, in the consumer marketing community, customer loyalty has long been regarded as an important goal. Both academics and professionals have attempted to uncover the most prominent antecedents of customer loyalty ([28] Yang and Peterson, 2004; [10] Herington and Weaven, 2009). Consequently, a growing body of extant literature has analyzed the relationships between service quality/recovery, satisfaction and loyalty. However, the outcome of the theoretical and empirical results of these studies appeared to be incongruent. For example, while [21] Parasuraman et al. (2005), [2] Boshoff (2005) and [16] Marimon et al. (2012) confirmed service recovery to be directly/indirectly related to customer loyalty via perceived value and satisfaction; [13] Johnson et al. (2001) study showed complaint-handling construct has little effect on either satisfaction or loyalty. Thus, prompting call for further investigation.
In addition, unlike tangible products where the possibilities of errors, malfunctioning or service failures and hence the need for recovery are easily detectable, services are intangible, and customers are aware of the possibility of service failures from both the operational and the customer perspective ([7] Estelami, 2000). This awareness perhaps results because customers are often called to participate in the service production and consumption process ([14] Johnson and Nilsson, 2003; [100] East et al. , 2005). Therefore, customers appeared to have unclear expectations about the service because they do not know what they are going to get. Subsequently, the majority of dissatisfied service customers often choose not complaining following service failures; instead they...