The concept of consumer satisfaction is a central issue in marketing and much research has been conducted. However, hardly any of this research into satisfaction has focused on the typical features of services. This thesis focuses on two of them: (1) the performance heterogeneity inherent in service encounters, and (2) their experiential nature. Extensive research on performance heterogeneity has been conducted on the prechoice process. Examples are the literature on decision making under uncertainty, uncertain attributes in multiattribute models and perceived risk. This thesis however, looks for the first time at the role of heterogeneity in the satisfaction process. The main feature of services is their experiential nature. Several researchers have suggested that the commonly applied cognition based multiattribute and dlisconfirmation models are inadequate for capturing the experiential nature of the service encounter. Therefore, alternative models that use affect as a mediating variable between stimuli, cognitive processes and subsequent behaviour have recently been proposed. A review of the psychology and services marketing literature suggest that Russell's (1980) circumplex model is currently the best conceptualization of affect. In this thesis, it is examined whether Russell's model can be applied to service experiences, and whether affect can be included in satisfaction models with services to better capture their experiential nature. Consumption experience with a PC-based homebanking service was simulated in a laboratory. A 2 (expected mean performance) x 2 (expected variance in performance) x 2 (actual level of performance) factorial design was employed. Measures of disconfirmation, affect and satisfaction were taken. The results on the heterogeneity issue were surprising. All hypotheses developed had to be refuted, and alternative interpretations of the data were proposed. On the other hand, the data clearly support the inclusion of affect in satisfaction models. The implications of the findings on marketing theory and services management are discussed.