Postpurchase Processes, Customer Satisfaction, and Customer Commitment 18 CHAPTER Postpurchase Processes, Customer Satisfaction, and Customer Commitment McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

PART IV: CONSUMER DECISION PROCESS 18-2

Learning Objectives L06 L01 L02 L05 L04 L03 Describe the various postpurchase processes engaged in by consumers Define and discuss postpurchase dissonance Discuss the issues surrounding product use and nonuse and their importance to marketers Summarize disposition options and their relevance to marketers and public policy Explain the determinants and outcomes of satisfaction and dissatisfaction Describe the relationship between satisfaction, repeat purchase, and customer commitment 18-3

Consumer Behavior In The News… Can emotional attachment sell brands? What are the top 5 brands in terms of consumer emotional attachment? What is the relationship with emotional attachment, loyalty, and repeat purchase? Source: J. Pollack, “Tech Tops in Creating Emotional Connection,” Advertising Age, October 17, 2011, p. 38. 18-4

Consumer Behavior In The News… Can emotional attachment sell brands? What are the top 5 brands in terms of consumer emotional attachment? iPod iPhone GoogleSearch Disney Parks Google Emotional attachment is important because it increases loyalty and purchase frequency. Source: J. Pollack, “Tech Tops in Creating Emotional Connection,” Advertising Age, October 17, 2011, p. 38. 18-5

Postpurchase Consumer Behavior 18-6

Postpurchase Dissonance Postpurchase Dissonance occurs when a consumer has doubts or anxiety regarding the wisdom of a purchase made and is a function of the following: The degree of commitment or irrevocability of the decision The importance of the decision to the consumer The difficulty of choosing among the alternatives The individual’s tendency to experience anxiety 18-7

Postpurchase Dissonance After the purchase is made, the consumer may utilize one or more of the following to reduce dissonance: Increase the desirability of the brand purchased Decrease the desirability of rejected alternatives Decrease the importance of the purchase decision Reverse the purchase decision (return before use) 18-8

Postpurchase Dissonance Consumption guilt - when guilt feelings are aroused by the product/service use. Marketers need to focus on validating the consumption for “high guilt” products. Indulging in chocolate for some can cause consumption guilt 18-9

Applications in Consumer Behavior Arm & Hammer’s “countless uses for under a $1” campaign is a classic example of use innovativeness! Courtesy Church & Dwight Co., Inc.. 18-10

Displaying complementary products together Product Use and Nonuse Product Use Retailers can frequently take advantage of the fact that the use of one product may require or suggest the use of other products, e.g., dresses and shoes. Retailers can promote such items jointly display them together, or train sales personnel to make relevant complementary sales Displaying complementary products together 18-11

Product Use and Nonuse Product Use Stringent product liability laws have made firms responsible for harm caused by products not only when the product is used as specified by the manufacturer, but in any reasonably foreseeable use of the products. When marketers discover confusion about proper use, they should engage in communications to increase the chances of proper use. 18-12

Disposition 18-13

Disposition Product Disposition and Marketing Strategy Marketers must be aware of the disposition factors that ultimately affect consumer purchase decisions. Helping consumers with the disposition of a used product can help the consumer through this process (e.g., developing products, packages and programs that encourage proper disposition). Best Buy’s “Buy Back Program” Viewer discretion due to language content YouTube Spotlight 18-14

Purchase Evaluation and Customer Satisfaction The Evaluation Process 18-15

Purchase Evaluation and Customer Satisfaction The Evaluation Process Determinants of Satisfaction and Dissatisfaction Instrumental performance relates to the physical functioning of the product. Symbolic performance relates to aesthetic or image-enhancement performance. Affective performance is the emotional response that owning or using the product or outlet provides 18-16

Dissatisfaction Process 18-17

Dissatisfaction Responses Marketing Strategy and Dissatisfied Consumers Firms need to satisfy consumer expectations by Creating reasonable expectations through promotional efforts, and Maintaining consistent quality so the reasonable expectations are fulfilled. 18-18

Dissatisfaction Responses Marketing Strategy and Dissatisfied Consumers When a consumer is dissatisfied, the most favorable consequence is for the person to communicate this dissatisfaction to the firm but to no one else. Unfortunately, many individuals do not communicate their dissatisfaction to the firm involved. Companies often make it difficult to complain or are unresponsive to complaints. 18-19

Customer Satisfaction, Repeat Purchases, and Customer Commitment Creating Committed Customers Is Increasingly the Focus of Marketing Strategy 18-20

Customer Satisfaction, Repeat Purchases, and Customer Commitment Repeat purchasers continue to buy the same brand though they do not have an emotional attachment to it. Switching costs are the costs of finding, evaluating, and adopting another solution. Brand loyalty involves commitment to the brand – it is a biased behavioral response expressed over time. 18-21

Customer Satisfaction, Repeat Purchases, and Customer Commitment Do you know your Net Promoter Score? Net Promoter Score (NPS) is an indirect word-of-mouth (WOM) measure of true attitudinal loyalty. There are three categories of consumers: Promoters Passively satisfied Detractors NPS = Promoters minus Detractors 18-22

Customer Satisfaction, Repeat Purchases, and Customer Commitment Repeat Purchasers, Committed Customers, and Profits A churn is a turnover in a firm’s customer base. Reducing churn is a major objective of many firms today. It typically costs more to obtain a new customer than to retain an existing one, and new customers generally are not as profitable as longer-term customers! Why? 18-23

Customer Satisfaction, Repeat Purchases, and Customer Commitment Sources of Increased Customer Profitability over Time 18-24

Customer Satisfaction, Repeat Purchases, and Customer Commitment Repeat Purchasers, Committed Customers, and Marketing Strategy Developing a marketing strategy for a particular segment includes identifying specific objectives to be pursued, such as Attracting new users to the product category Capturing competitors’ current customers Encouraging current customers to use more Encouraging current customers to become repeat purchasers Encouraging current customers to become committed customers 18-25

Customer Satisfaction, Repeat Purchases, and Customer Commitment Customer Satisfaction Outcomes 18-26

Customer Satisfaction, Repeat Purchases, and Customer Commitment Relationship Marketing Five key elements to Relationship marketing: Developing a core service or product around which to build a customer relationship Customizing the relationship to the individual customer Augmenting the core service or product with extra benefits Pricing in a manner to encourage loyalty Marketing to employees so that they will perform well for customers 18-27

Video Application The following Video Clip demonstrates how the Geek Squad provides great customer service! 18-28

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