In this lecture we examine the postpurchase process as the after sale period. We will also discuss the importance of customer satisfaction and consumer loyalty. This lecture will cover the following topics: postpurchase dissonance, product use, disposal, purchase evaluation, and aspects of gaining customer satisfaction and loyalty.
Chapter 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 Copyrightê2004McGrawưHillAustraliaPtyLtd 71 Postpurchase Processes Postpurchase dissonance Product use and non-use • Disposal • Purchase evaluation • Customer satisfaction, repeat purchase behaviour and consumer loyalty Copyright ª 2004 McGrawHill Australia Pty Ltd 7–2 Postpurchase Consumer Behaviour 7–3 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 Copyrightê2004McGrawưHillAustraliaPtyLtd 74 Product Use and Non-Use Product use – – use innovativeness regional variations multiple vs single use • Packaging • Defective products – product recalls Copyright ª 2004 McGrawHill Australia Pty Ltd 7–5 Product-Usage Index 7–6 Unique Packaging for Competitive Advantage 7–7 The Incidence of Product Recalls 1998–2003 7–8 Product Disposal and Marketing Strategy • Recycling – – product package • Trade-ins – to motivate replacement • Second-hand markets – – e.g textbooks, clothes ‘Cash Converters’ Copyright ª 2004 McGrawHill Australia Pty Ltd 7–9 Product-Disposal Alternatives 7–10 Dissatisfaction Responses • Possible outcomes of a negative purchase evaluation: – – – Taking no action Switching brands, products or stores Warning friends and colleagues Copyright ª 2004 McGrawHill Australia Pty Ltd 7–13 Actions Taken by Consumers in Response to Product Dissatisfaction 7–14 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 ª 2004 McGrawHill Australia Pty Ltd 7–15 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 ª 2004 McGrawHill Australia Pty Ltd 7–16 Relationship Marketing The 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 Copyrightê2004McGrawưHillAustraliaPtyLtd 717 Brand Loyalty is biased a behavioural response • expressed over time • where a consumer selects a brand over alternative brands • a function of psychological processes Copyright ª 2004 McGrawHill Australia Pty Ltd 7–18 Repeat Purchase Behaviour and Marketing Strategy • Kodak monitors six groups of consumers/customers: – – – – – – current customers new customers brand switchers trial users customers who upgrade trade-in customers Copyright ª 2004 McGrawHill Australia Pty Ltd 7–19 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 ª 2004 McGrawHill Australia Pty Ltd 7–20 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) Copyrightê2004McGrawưHillAustraliaPtyLtd 721 Using Technology Modern information technology makes possible these close, ‘customised’ relationships that add customer perceived-value to the product/service Copyrightê2004McGrawưHillAustraliaPtyLtd 722 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 which refers other customers to your firm Copyright ª 2004 McGrawHill Australia Pty Ltd 7–23 “Loyal customers expect a good price, but they crave value most of all.” (Palmer, 1996) Copyright ª 2004 McGrawHill Australia Pty Ltd 7–24 • Rule No The customer is always right • Rule No.2 If the customer is not right, then refer to Rule No 1!! Copyright ª 2004 McGrawHill Australia Pty Ltd 7–25 Measuring Customer Satisfaction • Qualitative measurement techniques • Focus groups • Monitoring surveys Copyright ª 2004 McGrawHill Australia Pty Ltd 7–26 Next Lecture… Chapter 8: Perception Copyright ª 2004 McGrawHill Australia Pty Ltd 7–27 ... Copyright ª 2004 McGrawHill Australia Pty Ltd 7 5 Product-Usage Index 7 6 Unique Packaging for Competitive Advantage 7 7 The Incidence of Product Recalls 1998–2003 7 8 Product Disposal and Marketing Strategy... package • Trade-ins – to motivate replacement • Second-hand markets – – e.g textbooks, clothes ‘Cash Converters’ Copyrightê2004McGrawưHillAustraliaPtyLtd 79 Product-Disposal Alternatives 71 0 Purchase... Copyright ª 2004 McGrawHill Australia Pty Ltd 7 13 Actions Taken by Consumers in Response to Product Dissatisfaction 7 14 Marketing Strategy and Dissatisfied Consumers • Marketers need to satisfy consumer expectations