Consumer Behaviour

• Customer satisfaction


  Important because it influences later acquisition decisions, it is a business, it impacts the first-hand market, and it has a major impact on society
• American Customer Satisfaction Model

  Relationship between variables, with arrows representing upstream or downstream
• Satisfied vs Dissatisfied


  Consumers evaluate the outcomes of their decisions, with positive outcomes leading to satisfaction and negative outcomes leading to dissatisfaction

  
• Utilitarian dimensions


  How well the offering functions
• Hedonic dimensions


  How the offering makes you feel
• Utilitarian goods


  Toilet paper - does it do what it's supposed to do
• Hedonic goods


  Chocolate cake - is it yum
• Disconfirmation paradigm


  Outcome is whether the customer feels satisfied or dissatisfied, based on expectations and performance

  
• Attribution theory


  Explains how individuals think about causes of effects or behaviour, in terms of stability, locus, and controllability

  
• Equity theory


  Fairness of exchange, based on consumer's inputs and outputs vs. seller's inputs and outputs
• Post-decision feelings


  Coping with dissatisfaction through active coping, expressive support seeking, or avoidance
• Affective forecasting


  Mis-prediction about emotions, where expected feelings differ from actual feelings

  
• Responses to dissatisfaction


  • Taking no action
  • Discontinue purchasing
  • Complain/return
  • Engage in negative word-of-mouth
• Double deviation


  When something goes wrong, and when you try to fix it and it doesn't work out
• Tactics for customer retention


  • Care about consumers
  • Remember customers between sales
  • Build trusting relationships
  • Monitor service delivery
  • Provide extra effort
  • Increase switching costs
• Post-decision dissonance


  Anxiety over whether the correct decision was made, more common when MAO is high or more than one alternative is attractive
• Post-decision regret


  Thoughts that one should have purchased another option
• Paradox of choice


  An increase in the number of choice options will cause a significant amount of psychological distress, leading to buyer's remorse
• Model of learning from experience

  How we update our post-decision evaluations by using new information, impacted by motivation, prior knowledge/ability, and ambiguity of information
• Strategic implications for top-dog

  • Provide info to justify consumer's evaluations
  • Block exposure to evidence
  • Reinforcement messages
• Strategic implications for underdog


  • Encourage consumer learning
  • Comparative messages
  • Promotions
  • Product trials
• Disposition


  Influences later acquisition decisions, is a business, impacts the first-hand market, and has a major impact on society
• Social influences


  The influence of individuals or groups on a person's actions, reactions, and thoughts
• Sources of influence


  • Marketing sources delivered via mass media
  • Marketing sources delivered personally
  • Non-marketing sources delivered by mass media
  • Non-marketing sources delivered personally
• Reach


  Number of consumers exposed to the message
• Capacity for conversation


  Two-way flow of information
• Credibility


  Marketing sources are less credible, more biased, and manipulative, while non-marketing sources are independent and more credible
• Opinion leader


  An individual who acts as an information broker between the mass media and the opinions and behaviours of an individual or group
• Opinion leader characteristics


  • Knowledgeable about products
  • Heavy users of mass media
  • Buy new products when introduced
  • Perceived as credible
• Why opinion leaders have influence

  Perceived to be unbiased and credible, and having relevant knowledge
• Electronic word-of-mouth communication model


  Describes the process of how electronic word-of-mouth communication occurs
• Online reviews


  ~78.5% of consumers look for information online, ~70% of consumers trust online product reviews and use them, the most important metrics are valence and volume
• Caveats about online reviews
• Reference group


  A set of people with whom individuals compare themselves for guidance in developing their own attitudes, knowledge, and/or behaviour
• Aspirational reference group


  We admire and desire to be like, but are not currently a member
• Associative reference group


  We actually belong to, such as fan sites
• Disassociative reference group


  We disapprove of and do not want to emulate, such as neo-Nazis
• Norm


  Collective belief about what constitutes appropriate behaviour
• Brand-choice congruence


  The tendency for consumers to buy things that others in their group are also buying
• Factors affecting normative influence

  • Type of product: Necessity vs Luxury
  • Consumption locations: Private vs Public