1. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 17 Chapter Consumer Satisfaction

3. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives After completing this chapter, you should be able to: Describe consumer satisfaction. Identify basic factors that influence satisfaction. Discuss the relationship between needs and satisfaction. Explain how quality and satisfaction are related. Describe the expectancy disconfirmation model and its limitations. Identify different emotions associated with satisfaction. Exemplify different types of satisfaction. Identify the consequences of satisfaction and dissatisfaction.

4. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Overview Marketers have shifted their focus to developing long-term relationships with consumers. This chapter focuses on factors that lead to satisfaction and the outcomes of satisfaction for consumers and marketers. Consumer satisfaction often reflects neutral emotional state and little cognition.

5. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Defining Satisfaction Satisfaction is a judgment of a pleasurable level of consumption-related fulfillment, including levels of underfulfillment and overfulfillment. Consumers can make satisfaction judgments with respect to any or all of the aspects or stages of product and service experience. satisfaction focuses on fulfillment satisfaction is an internal state accounts of satisfaction must highlight the meanings that operate in the customers’ field of awareness. Dissatisfaction is an unpleasant level of consumption- related fulfillment.

6. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. What Causes Satisfaction? Service or product quality is a frequent organizational goal, yet manufacturers and consumers don’t necessarily agree about product and service quality Research findings indicate: (1) there is no such thing as objective quality (judgments are always based on someone’s perceptions) (2) managers interested in customer satisfaction need to find out how customers (who buy the product or service) perceive quality. Perceived quality involves preferences, is based on comparative standards, differs among customers and situations, and resides in the use or consumption of the product or service.

7. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. How are Performance and Satisfaction Related? Perceived quality is an important predictor of consumer satisfaction. QualitySatisfactionPurchase Intention Eight general dimensions of quality have been proposed: features, performance, reliability, conformance, durability, serviceability, aesthetics, perceived quality. SERVQUAL scale developed to measure service quality 21 perception items, distributed through five service quality dimensions reliability, empathy, tangibles, responsiveness, assurance

8. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. How are Choice and Satisfaction Related? Distinction between product and service choice criteria and drivers of satisfaction. Consumers have trouble foreseeing the possible problems and benefits of consumption. Aspects of the consumption situation that directly affect satisfaction and dissatisfaction are unpredictable and hence can’t be used as choice criterion. Consumers’ satisfaction judgments focus on purchase outcomes, whereas firms emphasize differences between product or brand attributes in their marketing communications.

9. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Exhibit 17.1 Drivers of Choice and Satisfaction

10. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. How do Consumers Judge Satisfaction Expectations: anticipation or predictions of future events. Expectancy-Disconfirmation Model of Satisfaction: disconfirmation of preconsumption expectations is the key influence on consumer satisfaction. Positive disconfirmation: performances exceed expectations negative disconfirmation: expectations are not met Ceiling floor effect: Very high expectations (ceiling) are more likely to result in negative disconfirmation and very low expectations (floor) in positive disconfirmation.

11. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Exhibit 17.2 A Simplified Expectancy- Disconfirmation Framework

12. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. How do Consumers Judge Satisfaction Sources of expectations include: memories of past experiences, word-of-mouth communications, third party information, cultural milieu. Expectations vary in abstractness, complexity, accessibility. active expectations passive expectations Satisfaction is a process extending across the entire consumption experience.

13. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Desires as a Satisfaction Standard Desires model of satisfaction Satisfaction is a function of the consumer’s assessment of the degree to which a product meets or exceeds his or her desires, the outcome being called desires congruency Desires are levels of products’ attributes and benefits that a consumer believes will lead to, or are connected with, higher-level values.

14. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Fairness as a Satisfaction Standard Fairness Perceptions of fairness affect consumers’ satisfaction Homans’s rule of justice proclaims parties’ rewards in exchanges with others should be proportional to their investments (or losses) Three dimensions of fairness and satisfaction/ dissatisfaction Distributional fairness procedural fairness interactional fairness

15. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Exhibit 17.3 The Relationship between Fairness and Satisfaction

16. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Consumer Attributions and the Satisfaction Process When products or services fail, consumers attempt to understand the reason why. Attribution theory was developed to understand how individuals find explanations for outcomes or behaviors. The relationships between attributions and anger (dissatisfaction) toward the firm are summarized in Exhibit 17.4.

17. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Exhibit 17.4 Consumer Attributions and Feelings of Anger with the Firm

18. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Emotions, Ambivalence, and Satisfaction Five emotional response modes include: Satisfaction as Contentment Satisfaction as Pleasure Satisfaction as Delight Satisfaction as Relief Satisfaction as Ambivalence

19. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. The Consequences of Satisfaction and Dissatisfaction Exit: not to purchase or use that product or service again. Voice: compliments an organization may receive when it delivers an especially satisfying outcome; complaints to the company about performance failure, negative and positive word-of-mouth with other consumers or consuming organizations, or third-party complaints or compliments. Continued patronage: customer loyalty is a deeply held commitment to rebuy or repatronize a preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior. Twist: positive and negative ways in which consumers restructure meanings, roles and objects in the marketplace.

20. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Consumer Satisfaction and Profitability Direct Effects on Profitability of Quality, Satisfaction, and Loyalty Quality reduces failures and operating costs and lowers the cost of recovery. Quality leads to better consumer reputations, better marketing channel member receptivity, better awareness, and lower costs of attracting new customers. Satisfaction has direct effects on profit through its influence on retention. Loyal customers’ contributions to profitability are great.

21. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Key Terms active expectations ambivalence response contentment response customer loyalty critical incident technique delight response desires desires model of satisfaction Homans’s rule of justice interactional fairness internal state negative disconfirmation overfulfillment passive expectations perceived quality pleasure response

22. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Key Terms (continued) dissatisfaction distributional fairness expectancy-disconfirmation model of satisfaction expectations exit fairness fraudulent complaining positive disconfirmation procedural fairness relief response satisfaction satisfaction drivers twist underfulfillment voice