Chapter 15 Consumer Relationships

Learning Outcomes List and define the behavioral outcomes of consumption Know why and how consumers complain and spread word of mouth and know the ramifications of for the marketing firm Use the concept of switching costs to understand why consumers do or do not repeat purchase behavior

Learning Outcomes Describe each component of true consumer loyalty Understand the role that value plays in shaping loyalty and building consumer relationships

Outcomes of Consumption Procedural justice - The extent that consumers believe the processes involved in processing a transaction, performing a service or handling a complaint is fair Critical incident - Exchanges between consumers and business that the consumer views as unusually negative

Complaining Behavior Occurs when a consumer actively seeks out someone to share an opinion about a negative consumption event

Handling Service Complaints Effectively Thank the customer for providing the information Ask questions to clarify the issue Apologize sincerely Show empathy for the customer’s situation Explain the corrective action that will take place Act quickly Follow up with the customer after the corrective action

Results of Not Complaining Consumer may remember the incident May complain to others about the incident Consumers may retaliate with revenge-oriented behaviors Rancorous revenge Retaliatory revenge

Word-of-Mouth (WOM) Negative WOM Positive WOM

Influences of Word-of-Mouth Negative public publicity Doing nothing Denying responsibility Taking responsibility Releasing information Participating in negative WOM Implications of negative WOM 3rd party endorsements

Switching Behavior Consumer chooses a competing choice, rather than the previously purchased choice, on the next purchase occasion

Categories of Switching Costs Procedural - Involve lost time and effort Financial - Total economic resources that must be spent or invested as a consumer learns how to obtain value from a new product choice Relational - Emotional and psychological consequences of changing from one brand/retailer/service provider to another

Satisfaction and Switching Switching costs a reason why consumer satisfaction/dissatisfaction results fail to predict future purchasing behavior Competitive intensity - The number of firms competing for business within a specific category

Customer Share The portion of resources allocated to one brand from among the set of competing brands Customer inertia Consumer tends to continue a pattern of behavior until some stronger force motivates him or her to change

Customer Commitment A combination of high customer share and a strong feeling of attachment, dedication, and sense of identification with a brand Antiloyal consumers - Do everything possible to avoid doing business with a particular marketer

Relationships and the Marketing Firm Exchange between a business and a consumer comprise a relationship Customers have a lifetime value to the firm True loyalty involves continuing series of interactions and feelings of attachment between customer and firm Relationship quality - Degree of connectedness between a consumer and a retailer

Value and Relationship Quality A healthy relationship between a consumer and a marketer enhances value for the consumer and the marketer When relationship quality is very strong, the marketer and the customer act as partners