Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-1 Chapter 7: Postpurchase processes, customer satisfaction and consumer loyalty
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-2 Postpurchase processes, customer satisfaction and consumer loyalty Final consideration in the consumer decision making process
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-3 Postpurchase processes, customer satisfaction and consumer loyalty Postpurchase process Postpurchase dissonance Why product use is important to marketers Why product disposal is important to consumers Concept of customer satisfaction Concept of consumer loyalty
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-4 Postpurchase processes Postpurchase dissonance Product use and non-use Disposal Purchase evaluation Customer satisfaction, repeat purchase behaviour and consumer loyalty
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-5 Postpurchase consumer behaviour
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-6 Postpurchase dissonance Some purchases are followed by postpurchase dissonance Probability of postpurchase dissonance and the magnitude of dissonance is a function of the: – degree of commitment and/or whether the decision can be revoked – importance of the decision to the consumer – difficulty of choosing among the alternatives – individual’s tendency to experience anxiety
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-7 Product use and non-use Product use – use innovativeness – regional variations – multiple vs single use Packaging Defective products – product recalls
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-8 Product-usage index for VCR, microwave and PC
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-9 Unique packaging for competitive advantage
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-10 Incidence of product recalls in Australia YearConsumer goods FoodTherapeuticMotor vehicles Ref:
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-11 Product disposal and marketing strategy Recycling – product – package Trade-ins – to motivate replacement Second-hand markets – E.g. textbooks, clothes – ‘Cash converters’
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-12 Product-disposal alternatives
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-13 Purchase evaluation Evaluation of a purchase is influenced by: – Expectations – Perceived performance
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-14 Expectations, performance and satisfaction
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-15 Dissatisfaction responses Possible outcomes of a negative purchase evaluation: – Taking no action – Switching brands, products or stores – Warning friends and colleagues
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-16 Dimensions of performance Customers switch ‘away’ from service providers rather than ‘to’ providers. In one study the reasons were: – Core service failure (44%) – Service encounter failures (34%) – Inconvenience (21%) – Response to service failures (17%) – Attraction to competitors (10%) – Ethical problems (7%) – Involuntary switching (6%)
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-17 Actions taken by consumers in response to product dissatisfaction
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-18 Four types of response styles associated with dissatisfaction have been identified: Passives (14%) – Seldom take action, younger group, don’t see a benefit from complaining Voices (37%) – Seldom take private or public action, usually complain directly to the firm, older group, believe they are providing a social benefit Irates (21%) – Take above average levels of private response and average levels of direct action, but low levels of public action Activists (28%) – Likely to get involved in private, direct and public action, believe they are providing social benefits by complaining
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-19 Marketing strategy and dissatisfied consumers Marketers need to satisfy consumer expectations by: – creating reasonable expectations through promotional efforts – maintaining consistent quality so that these reasonable expectations are fulfilled
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-20 Repeat purchase behaviour Note the difference between: Brand loyalty – Implies a psychological commitment to the brand and Repeat purchase behaviour – simply involves the frequent repurchase of the brand
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-21 Relationship marketing Five key elements: Developing a core product/service on which to build Customising the relationship to the individual customer Augmenting the core product/service with extra benefits Pricing in a manner that encourages loyalty Marketing to employees so that they perform well for customers
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-22 Brand loyalty is Biased A behavioural response Expressed over time A consumer selects a brand over alternative brands A function of psychological processes
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-23 Repeat purchase behaviour and marketing strategy (cont.) Once objectives are defined for each group it becomes possible to develop and implement marketing strategies and evaluate the results
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-24 Importance of customer satisfaction The business of business is getting and keeping customers. (Drucker, 1979) Delivering high-quality service and high customer satisfaction is closely linked to profits, cost savings, and market share. (PIMS, Profit Impact of Market Share, 1970s)
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-25 Using technology Modern information technology makes possible these close, ‘customised’ relationships that add customer perceived-value to the product/service – E.g. preferred seats on a airline, – Type of hotel suite – Car servicing details
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-26 Value of customer loyalty Increased purchases of the existing product Cross-purchases of your other products Price premium due to their appreciation of your added-value services Reduced operating cost because of familiarity with your service system Positive word-of-mouth that refers other customers to your firm
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-27 “Loyal customers expect a good price, but they crave value most of all.” (Palmer, 1996)
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-28 Rule No. 1 The customer is always right. Rule No.2 If the customer is not right, then refer to Rule No. 1!
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-29 Measuring customer satisfaction Qualitative measurement techniques Focus groups Monitoring surveys
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-30 Summary We have discussed: The postpurchase process The postpurchase dissonance Why product use is important to marketers Why product disposal is important to consumers Concept of customer satisfaction Concept of consumer loyalty
Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 7-31 Next lecture Chapter 8: Perception