CH-14 Consumption to Satisfaction – CB Consumer Behaviour : Chapter Notes

Chapter 14 Consumption to Satisfaction What Do You Think Polling Question When I’m treated unfairly by a business, dissatisfaction describes my feelings well. _____ Strongly Disagree _____ Disagree _____ Somewhat Disagree _____ Neither Agree nor Disagree _____ Somewhat Agree _____ Agree _____ Strongly Agree Have students access Course Mate at www.cengagebrain.com to answer the polling questions for each chapter of CB. Ask them to take the online poll to see how their answers compare with other students taking a consumer behavior course across the country. Then turn to the last page of the chapter to find the “What Others Have Thought” box feature. This graph is a snapshot of how other consumer behavior students have answered this polling question so far. Learning Objectives After studying this chapter, the student should be able to: 14-1 Gain an appreciation of the link from consumption to value to satisfaction. 14-2 Discuss the relative importance of satisfaction and value in consumer behavior. 14-3 Understand that emotions other than satisfaction can affect post-consumption behavior. 14-4 Use expectancy disconfirmation, equity, and attribution theory approaches to explain consumers’ post-consumption reactions. 14-5 Understand problems with commonly applied satisfaction measures. 14-6 Describe some ways that consumers dispose of products. Lecture Example A new study by McKinsey linked satisfaction with consistency and highlighted that companies with a consistent value proposition and a clear way of offering it do much better. According to the study, the companies that have the most satisfied consumers also report the tightest distribution of responses. It revealed that among U.S. consumers, multi-category retailers have the highest customer satisfaction ratings while subscription-based industries are struggling with issues of customer satisfaction. Cost-driven cuts made to service in the downturn due to decreasing revenue may be the reason attributed to the dismal state of customer satisfaction in transaction-based services. Source: “Retailers top service charts,” Warc, April 16, 2012. http://www.warc.com/Content/News/_Retailers_top_service_charts.content?CID=&ID=82dd7566-a92b-4ae6-9f2c-58632958ad5b&q=Retailers+top+service+charts&qr= Lecture Outline with PowerPoint^® Slides LO 14-1: Gain an appreciation of the link from consumption to value to satisfaction. I. Consumption, Value, and Satisfaction Consumption is the heart of all consumer behavior. In the consumption process, consumers use the product, service, or experience that they selected through the consumer decision-making process. Ultimately, consumers use or experience products and receive value in return. A. Consumption Leads to Value The important role of consumption becomes apparent when one considers that, without consumption, there is no value. Consumption is the process that converts time, goods, ideas, or services into value. The basic consumption process that is at the heart of CVF is shown in Exhibit 14.1. B. Consumption and Product Classification Important differences exist for the consumption of durable and nondurable goods. Durable goods are typically relatively expensive goods consumed over a long time period. Dishwashers, furniture, and most electronics represent durable goods. Nondurable goods are typically inexpensive and consumed quickly. Soft drinks and pencils are nondurable goods. For nondurable goods especially, marketers try to increase consumption frequency as much as possible. Consumption frequency refers to the number of times a product or service is consumed in a given time period. Marketers also attempt to increase the amount of product consumed per occasion. Services and experiences are usually classified as nondurable by default. However, some services are more clearly consumed over extended time periods. For example, people consume insurance daily even though consumers may pay premiums only periodically. C. Situations and Consumer Reactions The temporal factors, antecedent conditions, and physical environment are particularly influential on the consumption experience. How, what, and when people consume is largely dependent upon the environment that they are in. For example, football fans to enjoy tailgating, and numerous products are essential to convert the occasion into value. Beer, burgers, and brats are standard fare at typical midwestern tailgates. Without these, the experience is less than authentic. Authenticity means something (including an experience) is real, genuine, unique, or has a history of tradition. Thus, the environment plays a large role in influencing consumption and consumer satisfaction. D. Consumption, Meaning, and Transference Value depends on a process called meaning transference. Meaning transference begins with culture. Value is affected largely by the meaning of goods, services, and experiences. [Instructor PPT Slides 4–6] E. Consumption Outcomes and Emotion Consumers choose products, services, and experiences that they believe will deliver value by addressing their wants and needs. They anticipate good outcomes from their choices or else they would have made a different choice. Emotions influence CB before, during, and after consumption. Emotions play a role prior to exchange as expectations manifest emotions like anxiety, apprehension, or fear. Thus, emotions are involved in all phases of consumption and they influence value both directly and indirectly, as illustrated in Exhibit 14.2. Consumption, value, and satisfaction are tied closely together. Not surprisingly, consumers tend to be more satisfied with exchanges they find valuable, as value is at the heart of marketing transactions. F. Value in Experience Often, marketing experts acknowledge that products alone cannot produce value. Rather, the value comes from use of the service provided by the product, thus the idea of value in use. Use is not always straightforward. For example, consumers anticipate what an authentic French restaurant experience will be like based on cognitions that give the concept meaning (i.e., schema), the meaning is either realized or not during a visit to a French restaurant, and the evaluation of that experience in turn creates emotion and adjustments to meaning. Q: Discuss examples to illustrate the term “meaning transference.” A: Students’ answers will vary. For example, a diamond ring might signify permanence. A Rolex watch could signify style or success. LO 14-2: Discuss the relative importance of satisfaction and value in consumer behavior. II. Value and Satisfaction Is satisfaction the key outcome variable for marketers and consumers? Ask students to consider Exhibit 14.3. This chart plots scores for major retailers from the ACSI, which is the American Consumer Satisfaction Index. Managers acknowledge that initiatives that increase customer satisfaction do not always improve top-line performance, a business term referring to sales growth. Value and satisfaction relate to one another to some degree, but value is the heart of CB and is what consumers seek from consumption experiences. If marketers ever face the decision of providing value or satisfaction, value should be prioritized because, as illustrated by the ACSI, firms can do well even when they do not enjoy the highest industry satisfaction scores, but the firm that does not provide value in some form can’t succeed for long. A. What Is Consumer Satisfaction? Customer satisfaction receives a lot of attention from consumer researchers and marketing managers. However, different people may define satisfaction differently and this results in confusion over the exact meaning. Consumer satisfaction is a mild, positive emotional state resulting from a favorable appraisal of a consumption outcome. Several points distinguish consumer satisfaction from other important consumer behavior concepts: Consumer satisfaction is a post-consumption phenomenon because it is a reaction to an outcome. Like other emotions, satisfaction results from a cognitive appraisal. Some refer to this appraisal as the satisfaction judgment; however, the appraisal and the emotional reaction are distinct events. Satisfaction as an emotion is relatively mild and does not create strong behavioral motivations. Other key consumer variables like expectations, quality, or attitude are generally more relevant in explaining pre-consumption or even pre-purchase phenomena. Nevertheless, managers consider consumer satisfaction important because they believe consumers’ word of mouth, repeat purchases, and ultimately, consumer loyalty, correlate with reported customer satisfaction. B. What Is Consumer Dissatisfaction? Consumer dissatisfaction can be defined as a mild, negative affective reaction resulting from an unfavorable appraisal of a consumption outcome. Even though conceptually dissatisfaction is an opposite concept to satisfaction, the fact that consumers react differently to negative contexts means that dissatisfaction will explain behaviors that satisfaction cannot. [Instructor PPT Slide 6] Q: As a consumer have you ever experienced dissatisfaction with a product? Discuss. A: Students’ answers will vary. Problems with warranties for various electronic products could be discussed as examples. LO 14-3: Understand that emotions other than satisfaction can affect post-consumption behavior. III. Other Post-Consumption Reactions Although people often use satisfaction as a colloquialism for everything that happens after a consumer buys something, many other things, including other emotions, may also occur post-consumption. Among the other important post-consumption reactions that can be overlooked are specific emotions, including delight, disgust, surprise, exhilaration, and even anger. These particular emotions are often much more strongly linked to behavior, because although they are also emotional reactions to appraisals, they are often much stronger. An angry consumer exhibits much more noticeable and persistent behavior than does a consumer with low satisfaction. The particular emotion experienced by consumers will do much to determine the behavioral reaction. LO 14-4: Use expectancy disconfirmation, equity, and attribution theory approaches to explain consumers’ post-consumption reactions. IV. Theories of Post-Consumption Reactions The actual outcomes of consumption are compared to expectations. If the event turns out to be less than satisfying, perhaps the expectations were too high or the performance of the company was too poor. A. Expectancy/Disconfirmation The most commonly accepted theory of consumer satisfaction is the expectancy/disconfirmation theory. The basic disconfirmation model proposes that consumers enter into a consumption experience with predetermined cognitive expectations of consumption. When performance perceptions are more positive than what was expected, positive disconfirmation occurs. Positive disconfirmation leads to consumer satisfaction. When performance perceptions do not meet expectations, meaning performance is less than expected, negative disconfirmation occurs. Negative disconfirmation leads to dissatisfaction. Finally, if performance perceptions exactly match what was expected, confirmation (sometimes referred to as neutral disconfirmation) is said to occur. The expectancy disconfirmation approach is shown in Exhibit 14.4. Taken together, disconfirmation represents the cognitive appraisal that produces post-consumption emotions like consumer satisfaction. Expectations Expectations are pre-consumption beliefs concerning what will occur during an exchange and/or consumption of a product. Consumer expectations have two components: The probability that something will occur An evaluation of that potential occurrence Exhibit 14.4 reveals that expectations can also have a direct impact on satisfaction (by the dotted line), independent of their role in the disconfirmation process. This can occur when the consumer has very little involvement. In these cases, little effort is put into either expectation or performance appraisal, and satisfaction formation is largely impacted by consumer expectations alone. In other words, with low involvement, high expectations will be associated directly with increased satisfaction, and low expectations will be associated directly with increased dissatisfaction. Involvement serves to moderate the disconfirmation process. Very high involvement creates a similar moderating effect. When consumers are very involved with a situation and filled with anticipation, their ability to objectively judge performance can be impaired. Balance theory kicks in and consumers may adjust their reactions automatically as a way of protecting themselves from the realization that they may have made a poor choice. Thus, under conditions of very low or very high involvement, expectations can influence satisfaction directly. Expectations are the cognitive component of anticipation. Anticipation, though, also involves emotions. Hope, for example, is a fundamental emotion evoked by positive, anticipatory appraisals that signal uncertainty about a positive outcome. The consumer anticipates an outcome that could bring about a better situation in some way, and he feels the emotion of hope in return. In this way, hope contrasts with fear, the anticipation of a negative outcome. Types of Expectations Consumers bring different types of expectations into a consumption situation: Predictive Expectations: Expectations that form about what a consumer thinks will actually occur during an experience. Normative Expectations: Expectations of what a consumer thinks should happen given past experiences with a product or service. Ideal Expectations: Expectations about what a consumer really wants to happen during an experience if everything were ideal. Equitable Expectations: Expectations that a consumer forms regarding what she thinks should or ought to happen given the level of work that she has put into the experience. Source of Expectations In reality, consumers form expectations based on a number of different sources. Word-of-mouth communication from other consumers is an important source of information. A consumer’s experience also influences expectations. Explicit promises such as advertisements and promotions create consumer expectations as well. Personal factors also influence expectations. Performance Perceptions Perception plays a very important role in CB. Perception directly influences how a consumer interacts with the world. Perception is also very important for the consumption and the post-consumption processes. As is the case with expectations, performance perceptions can also directly influence consumer satisfaction formation independent of the disconfirmation process (Exhibit 14.4). This is particularly the case when expectations are low. Even if these low expectations are met by performance perceptions, the consumer may not feel very satisfied. Also, when a consumer has no previous experience or expectation regarding a product (for example, a new product), then perception directly influences satisfaction. Q: You want to go on a Mediterranean tour. From which source would you gather information? A: Students’ answers will vary. Checking travel brochures or advertisements or going by a friend or relative’s travel experience could be some of the sources you might look at. Confidence in Expectations and the Confirmatory Bias Another issue that is important in satisfaction theory is the degree to which consumers are confident in their expectations. Research has indicated that when expectations are held with a strong degree of confidence, both disconfirmation and performance perceptions affect satisfaction. However, when expectations lack a strong degree of confidence, perceived performance more strongly influences satisfaction. Not only do expectations play a key role in satisfaction formation, they also can affect how consumers see things. That is, expectations can affect performance perceptions. Ask students to imagine that they go into a class thinking, “This class is going to be really bad!” An expectation like this to actually alter their perception of the class experience. If they think the class is going to be bad, they may very well look for evidence to support this expectation! The term to explain this phenomenon is confirmatory bias. The confirmatory bias works in conjunction with self-perception theory. Self-perception theory states that consumers are motivated to act in accordance with their attitudes and behaviors. Expectations and Service Quality Service quality can be thought of as the overall goodness or badness of a service provided. Service quality is often discussed as the difference between consumer expectations of different service aspects and the actual service that is delivered. In fact, the SERVQUAL scale, a commonly applied approach for measuring service quality, takes this approach. From this perspective, service quality is really a disconfirmation approach. Desires and Satisfaction A desire is the level of a particular benefit that will lead to a valued end state. Studies have shown that desires directly impact satisfaction beyond the influence of disconfirmation alone. [Instructor PPT Slide 8] B. Equity Theory and Consumer Satisfaction Equity theory proposes that consumers cognitively compare their own level of inputs and outcomes to those of another party in an exchange. Equitable exchanges occur when these ratios are equal. So an inequitable exchange can occur when a consumer believes that he or she has been taken advantage of by a company or when another customer has been treated more favorably. When consumers set out to buy a computer, they will put quite a bit of effort into finding just the right one. When they buy a computer, they will get the computer, but they will also get a warranty, service contract, and maybe even in-home installation. These things represent their outcomes. The term distributive fairness refers to the way a consumer judges the outcomes of an exchange. The computer salesperson should put time into understanding the consumers’ desires and the way they will use the computer and then try to match these factors with a good arrangement of product features. Equity theory plays a role in explaining how consumers react to complaints. The term interactional fairness captures how fairly a consumer believes he is treated when dealing with service personnel in resolving some issue. [Instructor PPT Slide 9] Inequitable Treatment Perhaps more often, equity perceptions involve inequitable treatment of customers. Thus, service providers need to be keenly aware of how customers are treated in public to maintain perceptions that all customers are treated in much the same way—or at least treated in a fair way. Inequitable Consumers Some consumers will try to take advantage of situations. Even though treatment is inequitable, if the inequity is in the consumers’ favor, these particular customers may be very satisfied. These consumers may be satisfied because the equity balance favors them. However, their actions can disadvantage other consumers. Q: Describe a situation where you acted as an inequitable consumer. Do you think your behavior was justified? A: Students’ answers will vary. Most people would justify their behavior by claiming that it wasn’t a small insignificant error on the part of the service provider. C. Attribution Theory and Consumer Satisfaction Attribution theory focuses on explaining why a certain event has occurred. There are three key elements to the attribution theory approach: Locus: Judgments of who is responsible for an event. Consumers can assign the locus to themselves or to an external entity, such as a service provider. A self-ascribed event occurs when a consumer blames himself for a bad event. Control: The extent to which an outcome was controllable or not. Here, consumers ask themselves, “Should this company have been able to control this event?” Stability: The likelihood that an event will occur again in the future. Here, consumers ask themselves, “If I buy this product again, is another bad outcome likely to happen” [Instructor PPT Slide 10] D. Cognitive Dissonance Cognitive dissonance refers to thoughts that are inconsistent with one’s perceived notions. In this case, dissonance takes the form of lingering doubts about a decision that has already been made. Dissonance is sometimes known as buyers’ regret. A consumer is more likely to experience true dissonance following a purchase when the following conditions exist: The consumer is aware that there are many attractive alternatives that may offer comparable value relative to the product/brand purchased. The decision is difficult to reverse. The decision is important and involves risk. The consumer has low self-confidence. The dissonance among consumers’ beliefs following a consumption experience can be very discomforting and be a source of negative post-consumption emotions. Consumers may therefore be motivated to lessen this discomfort. To lessen feelings of discomfort following purchase, consumers may engage in any, or all, of the activities listed in Exhibit 14.5. Cognitive Dissonance and Satisfaction Satisfaction and cognitive dissonance are closely related topics. The major difference between the two concepts is that satisfaction is generally felt after a consumption experience but dissonance may be experienced even before consumption begins. [Instructor PPT Slide 11] LO 14-5: Understand problems with commonly applied satisfaction measures. V. Consumer Satisfaction/Dissatisfaction Measurement Issues There are many ways that marketers can measure consumer satisfaction. Three popular ways are as follows: Direct, Global Measure: Simply asks consumers to assess their satisfaction on a scale such as:

Attribute-Specific: Assesses a consumer’s satisfaction with various components, or attributes, of a product, service, or experience, such as:

Disconfirmation: Compares the difference between expectations and performance perceptions. This measure can be taken in a direct, subjective fashion, such as:

[Instructor PPT Slides 12, 13] A. Improving Satisfaction Measures Satisfaction is one of the most commonly measured concepts in consumer behavior but also one of the most difficult to measure accurately. The problems can be severe and limit the ability to use satisfaction ratings to explain or predict other outcomes, including whether or not the consumer will return. Ask students to consider that marketers measure satisfaction among existing customers most frequently. These customers have already decided to patronize a business. So a pop-up window on Amazon.com may ask consumers to rate satisfaction with a simple measure of this type. These consumers should already be favorable because they have decided to purposefully visit Amazon.com and shop using this site. Thus, they already feel favorable toward Amazon.com. Therefore, we would expect even without knowing what happened during the visit that the customers would report some degree of satisfaction. In fact, typical consumer responses to this type of measure show that the vast majority of consumers, 80% or more, choose “satisfied” or “completely satisfied.” Statistically speaking, these data are left skewed, in this instance meaning that the bulk of consumers have indicated that they are satisfied or completely satisfied with a product or service. Does this reflect reality, or is the scale simply inadequate in truly differentiating consumers experiencing different levels of satisfaction? The truth is that both possibilities are likely true to some extent. Exhibit 14.6 displays an improved way of measuring consumer satisfaction using multiple scale items. The scale mitigates problems with skewness and bias by providing scales with more response points and by using different response formats for each response item. LO 14-6: Describe some ways that consumers dispose of products. VI. Disposing of Refuse A. Disposal Decisions A final step in consumption is disposal of any consumer refuse. Consumer refuse is any packaging that is no longer necessary for consumption to take place or, in some cases, the actual good that is no longer providing value to the consumer. A number of disposal alternatives are available. These include the following: Trashing: One alternative that a consumer has is to simply throw away waste material including unused products, packaging, and by-products. There are environmental concerns with this alternative. Recycling: Another alternative for consumers is to recycle used products or packaging. Recycling cuts down on garbage while providing raw materials for other new products. Converting: Consumers can convert products or product packaging into new products in a number of creative ways. For example, consumers often use old t-shirts and socks as car-wash rags. Trading: Another alternative for consumers is to trade in old products for new products. The automotive industry has encouraged this practice for years. Donating: Consumers also have the ability to donate used products to various causes. Eyeglasses, clothing, etc. are often donated in order to help other consumers who may not be able to afford new products. Reselling: One of the most popular methods for permanently disposing of used products is to simply sell them. Garage sales and swap meets are popular means of disposing of products in this way. [Instructor PPT Slides 14, 15] Q: How would you dispose your old computer or laptop? A: Students’ answers may vary. Students might decide to sell it or donate it. B. Disposal, Emotions, and Product Symbolism Consumers often develop emotional bonds with their possessions. Possessions can help express a consumer’s self-concept. The decision to part with belongings can therefore be very emotional, especially for older consumers who place much symbolic value on many products. Selling, giving away, or donating goods can lead some consumers to feel as if they have lost a part of themselves. In other situations, consumers can be quite ready to dispose of products that bring back bad memories, or that lead consumers to have uneasy feelings about themselves or their past. The willingness to let go of possessions varies from consumer to consumer. Packrats possess a lifestyle trait leading to a strong tendency towards retaining consumption-related possessions. Packrats also are likely to visit garage sales, swap meets, and flea markets to purchase products that serve no immediate need. One method of disposal is to sell an item. For example, Ebay makes selling unwanted items easy. Video material for this chapter is starting on page 23–24 of the IM Q: Discuss examples of possessions which have strong positive associations. A: Answers may vary. It could be a stuffed toy given to you when you were ten or it could be a favorite book or movie DVD or it could be your grandmother’s cardigan. Instructor Manual for CB Consumer Behaviour Barry J. Babin, Eric G. Harris 9781305403222, 9781305577244