Post Purchase Processes 05 11 2012 Post purchase dissonance Doubt anxiety after making a difficult decision Results from having to give up desirable alternatives Nominal most limited decision making will not produce post purchase dissonance doesn t consider attractive features in an unchosen brand that do not also exist in the chosen brand High involvement decisions usually lead to dissonance Function of o Irrevocability o Importance of decision o Difficulty of choosing among alternatives o Tendency to experience anxiety How is it reduced o Pre purchase actions Avoid making decision Use decision rules o Post purchase actions Reverse purchase decision return before use Alter perceptions of the purchase decision Increase desirability of brand purchased Decrease desirability of rejected alternatives Decrease importance of purchase decision Look for external support for decision How can marketers help customers reduce dissonance pre and post purchase o Advertising that emphasizes the fun and positive emotions of decision o Incentive programs that encourage consumers to continue with purchase outcome process o Decision rules to minimize experience of post purchase doubt o Direct mail to confirm wisdom of purchase follow up calls Consumption guilt is similar in nature o Occurs when negative emotions or guilt feelings ar aroused by the use of a product or service Purchase evaluation Satisfaction extent to which product service meets expectation Want customers to be satisfied o Reduces level of subsequent decision making o Leads to positive WOM o May lead to brand commitment brand loyalty Expectancy confirmation model has some expected level of performance o If low performance confirms low expectation get neither satisfaction nor dissatisfaction o If performance expectations get negative affect o If performance expectations get satisfaction o If performance expectations get satisfaction and maybe delight Reduces level of decision making next time Purchase is rewarding and encourages repeat nominal Engage in WOM commitment Implies importance of managing expectations Expectations and perceived performance are not independent Nonsatisfaction consumer isn t going to feel disappointment or engage in complaint behavior but will not reduce likelihood that consumer will search for better alternative If discrepancy is large might restart entire decision process by placing item performing below expectations in the inept set Marketing manager emphasizes positive aspects might create expectations that item can t fulfill negative evaluation o Produce brand switching bad WOM complaints must create balance Determinants of Satisfaction and dissatisfaction Cost service failure 44 mistakes billing errors service catastrophes Service encounter failures 34 uncaring impolite unresponsive unknowledgeable employees Pricing 30 high prices price increases unfair pricing deceptive pricing Inconvenience 21 inconvenient location hours of operation waiting time for service or appointments Responses to service failures 17 reluctant responses failure to respond negative responses value Attraction by competitors 10 more personable reliable higher quality better Ethical problems 7 dishonest behavior intimidating behavior unsafe or unhealthy practices or conflicts of interest Involuntary switching 6 service provider or customer moves or a third party payer such as insurance company requires a change Two dimensions to performance Instrumental performance physical functioning of the product Symbolic performance aesthetic or image enhancement performance o Complete satisfaction requires adequate performance on both dimensions Affective performance emotional response that owning or using the product or outlet provides o Content processes image and so on should be consistent and appropriate across different channels within company or brand Measuring satisfaction Types of measures o Repeat purchase o Complaint and suggestion systems o Customer satisfaction surveys o Lost customer analysis When should we measure satisfaction Consumer Responses to Dissatisfaction Consumers response actions o Do nothing Function of importance of purchase ease of taking action existing level of satisfaction and characteristics of consumer o Take action Switch brands products providers Return the product Voice response to company complain most favorable to company Engage in negative WOM can go viral iPod United Bank of America Third party response Stop buying products Most dissatisfied customers do not complain In store inspection of future purchases o Should firms encourage consumers to voice complaints o How should a firm respond to complaints o How quickly should firms respond Firms need to satisfy consumer expectations by Creating reasonable expectations through promotional efforts Maintaining consistent quality so the reasonable expectations are fulfilled Customer Commitment Brand loyalty a biased behavioral response toward a brand expressed over time by a decision making unit with respect to one or more alternative brands out of a set of such brands that is a function of psychological processes Brand loyal committed customers have emotional attachment o Resistant to competitors marketing efforts o More receptive to line extensions and new products o More likely to forgive an occasional failure o Source of positive WOM o Are less price sensitive How does brand loyalty develop o Superior or distinctive performance Related to product firm or manner in which firm responds o Brand reflects or reinforces self concept o Consumer comfort with service provider Brand loyalty may not be achievable in some product categories Can arise through identification Brand loyalty program goals Costs only 1 5 as much to retain an old customer as to obtain a new one o Training frontline employees Repeat purchasers continue to buy the same brand though they do not have an emotional attachment to it solution to be high o Perceive switching costs cost of finding evaluating and adopting another o May engage in negative WOM and are vulnerable to competitors actions Mere repeat purchasers buying brand out of habit or because it is readily available where they shop or because it has the lowest price have no commitment to brand Committed customer a consumer loyal to a brand store or service has an emotional attachment to it o trust like it believe in this firm Total buyers satisfied buyers repeat purchasers committed customer Consumer comfort a psychological state