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Published by: Abhishek Neha on Feb 04, 2013
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12/14/2015

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Consumer Behavior Consumer Satisfaction

Consumer Satisfaction

Consumer Behavior Consumer Satisfaction Outline • The concept of consumer satisfaction/ dissatisfaction • Theoretical frameworks: – – Expectancy-disconfirmation theory Attribution theory • Measurement and management of consumer satisfaction • Consequences of satisfaction/dissatisfaction .

• distinguish: – transactions-specific satisfaction – cumulative satisfaction .Consumer Behavior Consumer Satisfaction Consumer satisfaction/dissatisfaction • satisfaction refers to a consumer‟s judgment that a product (or its features) provided a pleasurable level of consumption-related fulfillment (Oliver 1997).

.Consumer Behavior Consumer Satisfaction Expectancy-disconfirmation theory According to ED-theory. leading to positive or negative disconfirmation or confirmation. satisfaction is a function of three variables:  expectations regarding product performance formed prior to purchase  perceptions of product performance resulting from experience with the product  comparison of perceived performance with prior expectations.

. but may also elicit causal inferences along three dimensions: • locus • stability • controllability • (dis) satisfaction appears to be primarily related to locus of causality. consumers prefer a refund to an exchange in the case of stable attributions for product failure)..g. failures controllable by the marketer lead to anger) and may influence the type of redress sought (e. particular attributions seem to be linked to specific emotions (e.. in addition.g.Consumer Behavior Consumer Satisfaction Attribution theory • success and failure experiences with products lead to positive or negative overall emotional reactions.

Consumer Behavior Consumer Satisfaction In-class exercise: Satisfaction measurement • How satisfied are customers with the company's product? • What are the company's strengths and weaknesses? • What recommendations would you make to the management of this company? • What other data would you collect to assess how well the company satisfies its customers? .

) • quantitative methods – direct ratings of overall satisfaction – derived measures of satisfaction • importance-performance measures • disconfirmation measures (GAPS. ACSI) .Consumer Behavior Consumer Satisfaction Measurement and management of customer satisfaction • qualitative methods: – ghost shopping – complaint and suggestion systems – critical incident method (Bitner et al.

• incident classification: – employee response to service delivery failure (e.) • critical incidents are specific interactions between customers and service firm employees that are especially satisfying or especially dissatisfying.. customer errors). – unprompted and unsolicited employee actions (e. „special‟ needs. ..g. customer preferences. – employee response to customer needs and requests (e.Consumer Behavior Consumer Satisfaction Critical incident technique (Bitner et al. unavailable or slow service).g.g. unusual employee behavior).. level of attention.

Once you are familiar with the model. Think about the 9 paths (arrows) in the model and try to figure out the sign of the relationships. What are the implications of these scores for the future performance of these companies? .Consumer Behavior Consumer Satisfaction In-class exercise: ACSI Read the description of the ACSI model and be prepared to discuss the constructs included in the model. study the National Quarterly Scores (use the link on the home page). Pick an industry that you‟re interested in and study the historical performance of the major players in this industry.

Consumer Behavior Consumer Satisfaction American Customer Satisfaction Index (Fornell et al. industries. can be used for benchmarking over time and cross-sectionally. economic sectors. assessment of overall customer satisfaction as well as its antecedents and consequences. customer expectations customer satisfaction customer loyalty customer complaints perceived value perceived quality .) market-based performance measure for firms. and national economies.

Consumer Behavior Consumer Satisfaction The GAPS model C O N S U M E R Expected Service GAP 5 WOM Personal Needs Past Experience Perceived Service M A R K E T E R GAP 1 GAP 3 Service Delivery GAP 4 External Communication to Consumers Translation of Mgmt. Perceptions into SQ specs GAP 2 Management Perceptions of Consumer Expectations .

equipment. . and contact personnel. Zeithaml. individualized attention the firm provides its customers. • tangibles: appearance of physical facilities. • empathy: caring.Consumer Behavior Consumer Satisfaction Dimensions of perceived service quality (Parasuraman. accurately. and on time. and Berry) • reliability: ability to perform the promised service dependably. • responsiveness: willingness to help customers and provide the requested service promptly. • assurance: knowledge and courtesy of employees and their ability to inspire trust and confidence.

– avoid seller/brand in the future (“exit”).Consumer Behavior Consumer Satisfaction Consequences of dissatisfaction • responses to dissatisfaction: – do nothing. the costs and benefits of actions. • action taken depends on such factors as the level of dissatisfaction. – complain to seller or a third party (“voice”). and personal characteristics. attribution of blame. – negative word of mouth to friends. the importance of the product. .

RFM. positive WOM..Consumer Behavior Consumer Satisfaction Loyalty • a deeply held commitment to rebuy or repatronize a preferred product or service in the future. etc. • often measured by share of purchases. . intent to repurchase. despite situational influences and marketing efforts having the potential to cause switching behavior (Oliver). retention and longevity.

) Loyalty 100% (retention) apostle zone of affection 80% 60% 40% 20% terrorist zone of indifference zone of defection 0% 1 extremely dissatisfied satisfaction 2 somewhat dissatisfied 3 slightly dissatisfied 4 satisfied 5 very satisfied .Consumer Behavior Consumer Satisfaction Satisfaction and loyalty (Heskett et al.

Consumer Behavior Consumer Satisfaction Extending the duration of customer relationships • the notion of exchange has shifted from a transaction paradigm to a relationship paradigm. .g. • however.. purchases tend to increase. and loyal customers provide free WOM. price premiums can be charged. can a reduction of defections by 5 % really boost profits by 25% to 85% ?). the economics of defections are often not well understood (e. • customers become more profitable over time because operating costs decline.

Consumer Behavior Consumer Satisfaction How much profit a credit card customer generates over time (Reichheld and Sasser) 80 55 profit per customer 60 40 20 0 -20 -40 -60 -51 0 1 30 42 44 49 2 3 4 5 year .

Consumer Behavior Consumer Satisfaction A credit card company’s defection curve (Reichheld and Sasser) $1. .000 customer value $800 $600 $400 $200 $20 $0 50% $134 $38 40% $70 30% 20% 10% 0% $525 $300 defection rate Note: Customer value refers to the net present value of the profit streams a customer generates over the average customer life.

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