Lecture # 06 & 07: Post-Purchase Processes, Customer Satisfaction and Consumer Loyalty

Lecture # 06 & 07
Post-purchase processes,
customer satisfaction and
consumer loyalty
AVINASH BBA-4 081107 1

Management 8/e - Chapter 14
Lecture overview
 What is the postpurchase process?
 What is postpurchase dissonance?
 Why is product use is important to marketers?
 Why is product disposal is important to
consumers?
 What do we mean by ‘customer satisfaction’?
 What is ‘consumer loyalty’?
AVINASH BBA-4 081107

Postpurchase Consumer Behaviour

Post-purchase Dissonance
(Disagreement/ Conflict/ Difference)
 Some consumers experience doubts or anxiety about the
wisdom of the purchase. This is known as post-purchase
dissonance. It is most likely to occur:
 among individuals with a tendency to experience anxiety;
 after an irrevocable (Final/ Permanent) purchase;
 when the purchase was important to the consumer; and
 when the purchase involves a difficult choice between two
or more alternatives.
 Postpurchase dissonance is important to the marketing
manager because, if not resolved, it can result in a returned
product or a negative evaluation of the purchase.
Postpurchase Consumer Behaviour
 If complaint behaviour is not managed to

the satisfaction of the consumer, then it may
result in low satisfaction, subsequent brand-
switching and possible discontinued use of
the product.

Product Use and Non-Use
 Most purchases are followed by product use. This
use may be by the purchaser or by some other
member of the purchasing unit. Marketing
managers are interested in product use for a
variety of reasons. The main reason is that
consumers use a product to fulfil certain needs. If
the product does not fulfil these needs, a negative
evaluation may result. Therefore, managers must
be aware of how products perform in use.
 Monitoring product usage can indicate new
uses for existing products, needed product
modifications, appropriate advertising
themes, and opportunities for new products.
Product liability laws have made it
increasingly important for marketing
managers to be aware of all potential uses
of their products.
 Product use
– use innovativeness
– regional variations
– multiple vs. single use
Packaging

Product Disposal (Removal)
 Disposal of the product or its package may occur before,
during or after product use. Understanding disposal
behaviour has become increasingly important to marketing
managers, because of the ecological concerns of many
consumers, the costs and scarcity of raw materials, and the
changing laws; for example, laws in the EU make
manufacturers responsible for package disposal. The ease
of recycling or re-using a product’s container is an
important product attribute for many consumers. These
consumers, sometimes referred to as ‘socially-conscious’
consumers, are an important market segment not only
because of their purchases, but also because of their social
and political influence.

Marketing Strategy
 Marketing managers are concerned with product disposal
because the product disposal decision often affects the
purchase decisions of both the individual making the
decision and other individuals in the market for that
product category. Disposal sometimes occurs before the
acquisition of a replacement (trade-in). Second, frequent
decisions by consumers to seel, trade or give-away
products may result in a large used-product market which
can reduce market for new sales. Australian societies are
not ‘throw-away’ societies; we are generally concerned
with waste. Environmentally sound disposal decisions
benefit society as a whole.
Product Disposal and
Marketing Strategy
 Recycling
– product
– package
 Trade-ins
– to motivate replacement
 Second-hand markets
– e.g. textbooks, clothes
– ‘Cash Converters’

Product-Disposal Alternatives

Purchase Evaluation
 Evaluation of a purchase is influenced by:
– expectations
– perceived performance

Dissatisfaction Responses
 Possible outcomes of a negative purchase
evaluation:
– Taking no action
– Switching brands, products or stores
– Warning friends and colleagues

Actions Taken by Consumers in Response to
Product Dissatisfaction

Marketing Strategy and
Dissatisfied Consumers
 Marketers need to satisfy consumer
expectations by:
– creating reasonable expectations through
promotional efforts
– maintaining consistent quality so that these
reasonable expectations are fulfilled

Repeat Purchase Behaviour
Note the difference between:
 Brand loyalty
– implies a psychological commitment to the
brand and
Repeat purchase behaviour
– simply involves the frequent repurchase of
the brand

Brand Loyalty is…
 biased
 a behavioural response
 expressed over time
 where a consumer selects a brand over
alternative brands
 a function of psychological processes

Biased
 Some brand managers have an aim of
converting customers to brand loyals, where
they are biased towards the brand and,
given the opportunity, choose it frequently
over alternative brands

Relationship Marketing
 is a philosophy of doing business that focuses

on keeping and improving current customers
 does not necessarily emphasize acquiring new
customers
 is usually cheaper (for the firm)--to keep a
current customer costs less than to attract a new
one
 goal = to build and maintain a base of
committed customers who are profitable for the
organization
 thus, the focus is on the attraction, retention,
and enhancementAVINASH
of customer relationships
BBA-4 081107
Customer Goals of
Enhancing
Retaining
Satisfying
Getting

The five key elements:
1. Developing a core product/service on which to build
2. Customising the relationship to the individual
customer
3. Augmenting the core product/service with extra
benefits
4. Pricing in a manner that encourages loyalty
5. Marketing to employees so that they perform well for
customers

A Loyal Customer is One
Who...
 Shows Behavioral Commitment
– buys from only one supplier, even though other options exist
– increasingly buys more and more from a particular supplier
– provides constructive feedback/suggestions
 Exhibits Psychological Commitment
– wouldn’t consider terminating the relationship--
psychological commitment
– has a positive attitude about the supplier
– says good things about the supplier

Benefits to the Organization of Customer
Loyalty
 loyal customers tend to spend more with the organization

over time
 on average costs of relationship maintenance are lower
than new customer costs
 employee retention is more likely with a stable customer
base
 lifetime value of a customer can be very high

Benefits to the Customer
 inherent benefits in getting good value

 economic, social, and continuity benefits
– contribution to sense of well-being and quality
of life and other psychological benefits
– avoidance of change
– simplified decision making
– social support and friendships
– special deals
Value of Customer Loyalty
 Increased purchases of the existing product
 Cross-purchases of your other products
 Price premium due to their appreciation of your
added-value services
 Reduced operating cost because of familiarity with
your service system
 Positive word-of-mouth which refers other
customers to your firm

“Loyal customers expect a good
price, but they crave value most of
all.”
(Palmer, 1996)

Measuring Customer
Satisfaction
 Qualitative measurement techniques
 Focus groups
 Monitoring surveys

A model of consumer behaviour

Model of consumer behaviour
 Successful marketing decisions require a
thorough knowledge of consumer
behaviour
 The consumer behaviour model is
conceptual and organisational:
– Provides logical way of organising the many
variables which influence consumers and their
decision making processes
A model of consumer
behaviour – the consumer decision process
(Neal et al p. 19)

Next Lecture…
Perception

To Students BBA VIII
Special Thanks
AVINASH BBA-4 081107 33


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Lecture # 06 & 07

AVINASH BBA-4 081107 1

AVINASH BBA-4 081107

AVINASH BBA-4 081107

 If complaint behaviour is not managed to

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

 is a philosophy of doing business that focuses

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

 loyal customers tend to spend more with the organization

AVINASH BBA-4 081107

 inherent benefits in getting good value

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107

AVINASH BBA-4 081107 33

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