Final answer:
The statement is true as customer satisfaction depends on both the delivery and the perceived quality of service. Firms pursue a good reputation to ensure repeat customers and high satisfaction. Imperfect information may lead to dissatisfaction, but a firm's reputation can offset concerns about product quality.
Step-by-step explanation:
The statement that customer satisfaction with the service depends not only on the firm's ability to deliver what customers want, but also on the customers' perceptions of the quality of service received is true.
Every purchase is based on a belief about the satisfaction that the good or service will provide. This belief is formed by the information the buyer possesses. However, if this information is imperfect or unclear, it can result in buyers regretting their purchases or avoiding future transactions. Firms are aware of this, and hence, they strive to build a strong reputation to ensure customer satisfaction and foster repeat business.
Firms want repeat customers because they are likely to recommend the business to others. A good reputation means that customers are less worried about the quality of the product or service they are purchasing. For instance, a reputable grocery store can charge more than a temporary farmer's market stand since customers trust the consistent quality it offers and believe in the value of the service they receive.