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Consumer Behavior Consumer Behavior

Consumer Satisfaction
Consumer
Satisfaction
Consumer Behavior 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


Consumer Behavior Consumer Behavior
Consumer Satisfaction
Consumer satisfaction/dissatisfaction
satisfaction refers to a consumers judgment
that a product (or its features) provided a
pleasurable level of consumption-related
fulfillment (Oliver 1997);
distinguish:
transactions-specific satisfaction
cumulative satisfaction
Consumer Behavior Consumer Behavior
Consumer Satisfaction
Expectancy-disconfirmation theory
According to ED-theory, 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, leading to positive or negative
disconfirmation or confirmation;
Consumer Behavior Consumer Behavior
Consumer Satisfaction
Attribution theory
success and failure experiences with products lead to
positive or negative overall emotional reactions, but may
also elicit causal inferences along three dimensions:
locus
stability
controllability
(dis) satisfaction appears to be primarily related to locus of
causality; in addition, particular attributions seem to be
linked to specific emotions (e.g., failures controllable by
the marketer lead to anger) and may influence the type of
redress sought (e.g., consumers prefer a refund to an
exchange in the case of stable attributions for product
failure);
Consumer Behavior Consumer Behavior
Consumer Satisfaction
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?

In-class exercise:
Satisfaction measurement
Consumer Behavior Consumer Behavior
Consumer Satisfaction
Measurement and management of
customer satisfaction
qualitative methods:
ghost shopping
complaint and suggestion systems
critical incident method (Bitner et al.)
quantitative methods
direct ratings of overall satisfaction
derived measures of satisfaction
importance-performance measures
disconfirmation measures (GAPS, ACSI)
Consumer Behavior Consumer Behavior
Consumer Satisfaction
Critical incident technique
(Bitner et al.)
critical incidents are specific interactions between
customers and service firm employees that are
especially satisfying or especially dissatisfying;
incident classification:
employee response to service delivery failure (e.g.,
unavailable or slow service);
employee response to customer needs and requests
(e.g., special needs, customer preferences, customer
errors);
unprompted and unsolicited employee actions (e.g.,
level of attention, unusual employee behavior);
Consumer Behavior 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. Think about the
9 paths (arrows) in the model and try to figure out the sign of
the relationships. Once you are familiar with the model,
study the National Quarterly Scores (use the link on the home
page). Pick an industry that youre interested in and study the
historical performance of the major players in this industry.
What are the implications of these scores for the future
performance of these companies?

Consumer Behavior Consumer Behavior
Consumer Satisfaction
market-based performance measure for firms, industries, economic
sectors, and national economies; assessment of overall customer
satisfaction as well as its antecedents and consequences; can be used
for benchmarking over time and cross-sectionally;
American Customer Satisfaction Index
(Fornell et al.)
perceived
quality
customer
expectations
perceived
value
customer
satisfaction
customer
complaints
customer
loyalty
Consumer Behavior Consumer Behavior
Consumer Satisfaction
The GAPS model
WOM
Personal Needs
Past Experience
External
Communication
to Consumers
Expected Service
Perceived Service
Service Delivery
Translation of Mgmt.
Perceptions into SQ specs
Management Perceptions
of Consumer Expectations
GAP 3
GAP 2
GAP 5
GAP 1
GAP 4
C
O
N
S
U
M
E
R
M
A
R
K
E
T
E
R
Consumer Behavior Consumer Behavior
Consumer Satisfaction
Dimensions of perceived service quality
(Parasuraman, Zeithaml, and Berry)
reliability: ability to perform the promised service dependably,
accurately, and on time;
assurance: knowledge and courtesy of employees and their
ability to inspire trust and confidence;
tangibles: appearance of physical facilities, equipment, and
contact personnel;
empathy: caring, individualized attention the firm provides
its customers;
responsiveness: willingness to help customers and provide
the requested service promptly;
Consumer Behavior Consumer Behavior
Consumer Satisfaction
Consequences of dissatisfaction
responses to dissatisfaction:
do nothing;
avoid seller/brand in the future (exit);
negative word of mouth to friends;
complain to seller or a third party (voice);
action taken depends on such factors as the level
of dissatisfaction, the importance of the product,
the costs and benefits of actions, attribution of
blame, and personal characteristics;
Consumer Behavior Consumer Behavior
Consumer Satisfaction
Loyalty
a deeply held commitment to rebuy or
repatronize a preferred product or service in
the future, despite situational influences and
marketing efforts having the potential to
cause switching behavior (Oliver);
often measured by share of purchases, intent
to repurchase, RFM, retention and longevity,
positive WOM, etc.;
Consumer Behavior Consumer Behavior
Consumer Satisfaction
Satisfaction and loyalty
(Heskett et al.)
0%
20%
40%
60%
80%
100%
1 2 3 4 5
extremely
dissatisfied
somewhat
dissatisfied
slightly
dissatisfied
satisfied very
satisfied
terrorist
apostle
zone of affection
zone of indifference
zone of defection
satisfaction
Loyalty
(retention)
Consumer Behavior Consumer Behavior
Consumer Satisfaction
Extending the duration of customer
relationships
the notion of exchange has shifted from a transaction
paradigm to a relationship paradigm;
however, the economics of defections are often not
well understood (e.g., can a reduction of defections
by 5 % really boost profits by 25% to 85% ?);
customers become more profitable over time
because operating costs decline, purchases tend to
increase, price premiums can be charged, and loyal
customers provide free WOM;
Consumer Behavior Consumer Behavior
Consumer Satisfaction
How much profit a credit card customer
generates over time (Reichheld and Sasser)
-51
30
42
44
49
55
-60
-40
-20
0
20
40
60
80
0 1 2 3 4 5
year
p
r
o
f
i
t

p
e
r

c
u
s
t
o
m
e
r
Consumer Behavior Consumer Behavior
Consumer Satisfaction
A credit card companys defection curve
(Reichheld and Sasser)
$20
$38
$70
$134
$300
$525
$0
$200
$400
$600
$800
$1,000
0% 10% 20% 30% 40% 50%
defection rate
c
u
s
t
o
m
e
r

v
a
l
u
e
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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