Marketing – AEB 41 The post-purchase phase of consumption • Customer satisfaction and dissatisfaction (CSD) – Quality of goods (services) • Actual or perceived? • High quality product: more profits – Better margins – Easy sale and brand extension – Higher loyalty • Customer complaining behaviour
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Marketing – AEB 41 Research on quality and satisfaction • High quality leads to higher profits (Buzzel and Gale, 1987) • It costs less to retain existing customers than to gain new ones – Satisfied consumers do not look for alternatives • Total quality management (ISO 9000) • Product improvement driven by customer comments
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Marketing – AEB 41 Is it only the good? • Service components – Service environment • Store layout, etc. – Service product • How many tills (at the exit)? – Service delivery • Is the cashier smiling, kind, etc.? • Service happens in real time Consumer Behaviour and Food 4 Marketing – AEB 41 Two models of consumer satisfaction • Confirmation model (CM) – Familiarity/habit with unsatisfactory product – Confirmed negative expectation – Low arousal • Disconfirmation model (DM) – High arousal – Disconfirmed expectation • Exceeding expectation (satisfaction) • Not fulfilling expectation (dissatisfaction) • Simple confirmation Consumer Behaviour and Food 5 Marketing – AEB 41 The confirmation model Consumption
Expected negative outcome
Discontent
Little complaint or product
avoidance
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Marketing – AEB 41 What is consumer (dis)satisfaction? • The buyer’s cognitive state of being adequately or inadequately rewarded for the sacrifice he has undergone (1969) • Oliver (1981) definition (disconfirmation) – Summary psychological state – Disconfirmed expectations (prior feelings) – Short duration of surprise/excitement – Change of attitudes Consumer Behaviour and Food 7 Marketing – AEB 41 Consumer satisfaction • It is a post-consumption evaluation that a chosen alternative at least meets or exceeds expectations Engel et al., 1995
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Marketing – AEB 41 Expectations • Equitable performance – Normative judgement reflecting the performance that should be provided by the product, given costs and efforts devoted to purchase and use • Ideal performance • Expected performance – What the performance probably will be Consumer Behaviour and Food 9 Marketing – AEB 41 Factors affecting (dis)satisfaction in the DM • Size of discrepancy between expectation and experience • Importance or value of the product • Perception of the product performance (CM satisfaction effect) – High performance when HP is expected is better than low performance when LP is expected Consumer Behaviour and Food 10 Marketing – AEB 41 Disconfirmation model (unsatisfactory case) Consumption
Perception of actual Expectation about
attributes attributes
Disconfirmation (perception-expectation)
Dissatisfaction (modified by explanations such as Expectation,
bad luck, responsibility, etc.) attitude, loyalty and RESPONSE consumption (word of mouth, complaint, switch, nothing) are affected Consumer Behaviour and Food 11 Marketing – AEB 41 Satisfaction • It is also strongly influenced by disconfirmation • Satisfaction is additive (retail satisfaction) • Measuring satisfaction and dissatisfaction in questionnaires: – Negative emotion – Positive satisfaction • Surprise • Interest
Marketing – AEB 41 Satisfaction, perceived quality and attitudes • Disconfirmation is based on episodes • Over time, satisfaction is reflected by attitudes • By measuring attitude, we can measure perceived quality
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Marketing – AEB 41 Response to consumer satisfaction and dissatisfaction • About 15-25% of products are unsatisfactory • Response to perceived product failure – Exit (switching, boycotting…) – Voice (complaining) • Negative word of mouth • Complain to supplier (e.g. substitution) • Legal complaints – Vandalism?
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Marketing – AEB 41 Attribution of performance to supplier and dissatisfaction • Availability of explanations – Ease of recall – Distinctiveness of a product failure – Worse-than-expected outcomes have a larger impact than Better-than-expected ones (endowment effect, prospect theory) • Causal inferences – Stability (is the problem clearly due to someone/something and not exceptional?) – Locus of causality (who is to blame? Me or the supplier?) – Controllability (can the agent intervene and solve the problem?)
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Marketing – AEB 41 Complaining
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Marketing – AEB 41 Factors affecting complaining behaviour • Reluctance to complain – Word of mouth is often enough • Low relation between the degree of dissatisfaction and the likelihood to complain • Theory of Planned Behaviour – Expected outcomes – Normative influence – Control factors
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Marketing – AEB 41 Expected outcomes • Expected returns vs opportunity costs – Replacement, apology, better goods/service in the future – Wasted time, embarrassment, lost opportunities • Importance of the product
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Marketing – AEB 41 Normative influence • What other think I should do? – Not necessary that someone else should be actually aware of decision
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Marketing – AEB 41 Control factors • Knowledge – Ease of access to key personnel – Understanding of causes • Skills – Ability to express complaint • Time
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Marketing – AEB 41 Is it good to receive complaints? • Reduce negative comments to other potential customers • After complaining (if it is satisfactory) it is more likely to repeat purchase (?) • Good complain-handling raise loyalty
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Marketing – AEB 41 The typical complainer • Young • Higher-than-average education • Higher-than-average income • Other typical characteristics – Positive about consumerist activities – Prefer a lifestyle that demonstrates difference and individuality – Little hesitancy in letting their problem known
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Marketing – AEB 41 Strategies to handle dissatisfaction • Refining the product • Belief management • Damage limitation
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Marketing – AEB 41 Refining the product • Feedback from consumer • “Technical” improvement – Customer preference – Monitor competitors practices – Research • Conjoint analysis • Preference Mapping Consumer Behaviour and Food 25 Marketing – AEB 41 Belief management • Influence relevant expectation – Forewarning customers about problems (price increase) • Reveal hidden benefits – Focus on certain characteristics (GM free, organic produce) • Cue negative beliefs about competitors – Competitive advertising • Don’t draw attention to the unnoticed – Do not apologise for minor shortfall…
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Marketing – AEB 41 Damage limitation • Handling complaints politely • Recognising the deficiency • Apologising and responsibility to assist customers (not necessarily for causing the problem) • Explain what’s gone wrong: it is an exception (?) • Compensating customers where appropriate • Improve the product to answer to complaints
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Marketing – AEB 41 Customer retention • Individualised marketing • Total quality control policy • Early warning satisfaction feedback system (questionnaires on expectations) • Build realistic expectations • Provide guarantees • Provide information on product use • Solicit customer feedback • Reinforce customer loyalty
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Marketing – AEB 41 A case study • General Mills (cereals, baking products…) – Operation sensory department – Test acceptance of new product – Sensory panels with daily grading • Results of the program: – Reduction in complaints – Reduction of costs (returned products)