Consumer Relationships BABIN / HARRIS CB PART 5 CHAPTER 15 Consumer Relationships ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcomes List and define the behavioral outcomes of consumption. Know why consumers complain and the ramifications of complaining behavior for a marketing firm. Use the concept of switching costs to understand why consumers do or do not repeat purchase behavior. Describe each component of true consumer loyalty. Understand the role that value plays in shaping loyalty and building consumer relationships. 15-2 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Outcomes of Consumption Expanded disconfirmation framework Cognitive processes Procedural justice Affective reactions Behavioral outcomes LO1 15-3 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Complaining Occurs when a consumer actively seeks out someone to share an opinion with regarding a negative consumption event. Consumers who do complain react with different emotions (i.e., anger) than do those who do not complain. Complainers are valuable sources of feedback. LO2 15-4 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Result of Complaining: Complainers More likely to become a satisfied customer. More likely to return. Tells others when a company responds poorly. Valuable source of information. LO2 15-5 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Result of Complaining: Noncomplainers Unlikely to return. May tell others about experience. Can become a satisfied customer if firm can take preemptive action despite the lack of a complaint. LO2 15-6 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Handling Service Complaints Effectively Thank the guest 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. LO2 15-7 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Revenge Rancorous revenge—a consumer yells, insults and makes a public scene in an effort to harm the business. Retaliatory revenge—in extreme cases the furious consumer can become violent or try to vandalize the business. LO2 15-8 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Word-of-Mouth (WOM) Negative WOM—takes place when consumers pass on negative information about a company from one to another. LO2 15-9 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Word-of-Mouth (WOM) Positive WOM—occurs when consumers spread information from one to another about positive consumption experiences. LO2 15-10 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Handling Negative Publicity Do nothing; it will go away. Deny responsibility for any negative event. Take responsibility for any negative events and be visible in the public eye. Release information allowing the public to draw its own conclusion. LO2 15-11 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Switching Behavior Switching—a consumer chooses a competing choice, rather than the previously purchased choice, on the next purchase occasion. LO3 15-12 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Switching Costs Switching costs—the costs associated with changing from one choice to another. Procedural—involves lost time and effort. Financial—the total economic resources that must be spent to obtain value from a new choice. Relational—the emotional and psychological consequences of changing. LO3 15-13 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumer Loyalty Customer share—the portion of resources allocated to one brand from among the set of competing brands. Also known as share of wallet. Customer inertia—a consumer will tend to continue a pattern of behavior until some stronger force motivates a change. Loyalty card/program—keeps track of the amount of purchasing a consumer has had with a given marketer and offers rewards. LO4 15-14 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Customer Commitment A strong feeling of attachment, dedication, and sense of identification with a brand. Loyalty is a function of customer share and customer commitment. LO4 15-15 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Antiloyalty Antiloyal consumers—those who will do everything possible to avoid doing business with a particular marketer. LO4 15-16 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Relationships and the Marketing Firm The exchange between a business and a consumer comprise a relationship. Customers have a lifetime value to the firm. True loyalty involves both a continuing series of interactions and feelings of attachment between the customer and the firm. Relationship quality—represents the degree of connectedness between a consumer and a retailer. LO5 15-17 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Characteristics of Relationship Quality Competence Communication Trust Equity Personalization Customer oriented LO5 15-18 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.