POST-DECISION PROCESSES

MARK 3420, Spring 2012 Prof. Rongrong Zhou

Exhibit 11.1: Chapter Overview: Post-Decision Processes

MARK 242 Consumer Behavior, Elaine Chan Spring 2010

A MODEL OF COMPLEX DECISION MAKING

Problem Recognition

Information Acquisition

Information Processing

Post-Purchase Evaluations

Comparative Evaluation/ Purchase

CHAPTER OVERVIEW
Post-Decision Dissonance and Regret Learning from Consumer Experience How Do Consumers Make Satisfaction or Dissatisfaction Judgments? Responses to Dissatisfaction Is Customer Satisfaction Enough? Disposition

DISSONANCE

Dissonance Theory:
y

Your different beliefs (about related objects) should be consistent with one another Inconsistency = Dissonance

What is Post-Purchase Dissonance??

DISSONANCE
Post-Purchase
y

Dissonance

You purchased one alternative; rejected others y Believe that others also have desirable attributes y Inconsistency!! y And often, regret
Try
y

to reduce dissonance by changing inconsistent beliefs

How??

DEALING WITH DISSONANCE

Downgrading

other alternatives Searching for supportive info on chosen brand Ignoring dissonant information Selectively interpreting information Dissatisfaction
Cancel Purchase y Not Purchase Again
y
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WHEN IS DISSONANCE MOST LIKELY?

High Involvement or Low Involvement Product? When alternatives are rated about equally, or when one alternative is clearly better?

MARKETING IMPLICATIONS OF DISSONANCE

Providing Supportive Information Product warranty or money back guarantee Downgrading Alternatives:
y

Comparative Advertising

LEARNING FROM CONSUMER EXPERIENCE

After

purchase, consumers use the product

Usage provides opportunity to learn about the product Learning by hypothesis testing

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Exhibit 11.3: A Model of Learning from Experience

Ability Motivation

Processing biases Opportunity What factors affect learning from experience?

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LEARNING FROM CONSUMER EXPERIENCE

What

Affects Learning from Experience?

Motivation y Prior Knowledge or Ability y Ambiguity of the Information Environment or Lack of Opportunity y Processing Biases
y

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HOW DO CONSUMERS MAKE SATISFACTION OR DISSATISFACTION JUDGMENTS?

Satisfaction/Dissatisfaction

Based on Thoughts
y

Disconfirmation Theory Attribution Theory Equity Theory

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DISCONFIRMATION THEORY: SATISFACTION / DISSATISFACTION

Better Product Performance = More satisfaction?? Does satisfaction depend on anything else?

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Exhibit 12.8: The Disconfirmation Paradigm

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DISCONFIRMATION THEORY (CONT.)

P > E: Positive disconfirmation; Satisfaction P = E: Confirmation; Satisfaction P < E: Negative disconfirmation; Dissatisfaction

So what should you do as a marketer?

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MANAGING EXPECTATIONS

Phone response systems: Your call will be attended to in the order in which it was received Earnings forecasts

MARK 242 Consumer Behavior, Elaine Chan Spring 2010

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ATTRIBUTION THEORY

People try to find reasons for what happens

y y

Find attributions for events Negative outcomes (e.g., bad exam performance, bad product performance)

Dimensions of Attributions:
y y y

Focus: Is the problem due to the consumer or the marketer? Controllability: Is the event under the consumers or the marketers control? Stability: Is the reason temporary or permanent?

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MARKETING APPLICATIONS OF ATTRIBUTIONS: FOCUS

Focus: Blame Reduction

y

You buy a chest-of-drawers from IKEA and soon find that a couple of the drawers dont slide smoothly and the bases are falling. Would you feel the problem is caused by poor-quality materials or by your skills at carpentry?

Internal to Marketer/External to Marketer: Which one leads to more blame?

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MARKETING APPLICATIONS OF ATTRIBUTIONS: CONTROLLABILITY

Controllability: Blame Reduction

y

You are going to Bangkok for a 3-day vacation. However, your flight is delayed by several hours. Will you blame the airline if you learn that the delay was caused by severe weather conditions? if you learn that the delay was caused by a mix-up in the pilot staffing roster?

Marketer controllable/non-controllable: Which causes more blame?

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MARKETING APPLICATIONS OF ATTRIBUTIONS: STABILITY

Stability: Exchange vs. Refund

y

You go to IKEA and order a coffee table. A few weeks after delivery, you find a large crack at the juncture near one of the legs. Would you be more angry If you thought the defect had developed due to poor quality of the wood? If you thought the defect might have been caused during delivery?

When is the consumer more likely to ask for exchange (vs. refund): when cause is stable or unstable?
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ATTRIBUTIONS FOR PRODUCT / SERVICE FAILURE

Focus: Who has the problem been caused by?

y

Consumer / non-marketer

less blame

Controllability: Is the event under the consumers or the marketers control?

y

Marketer-focus + controllable even more blame

Stability: Is the reason temporary or permanent?

y

Stable attributions more blame, prefer refunds

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EQUITY THEORY

Fairness in Exchange Inputs Versus Outputs

y y

Consumers side Marketers side

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SATISFACTION BASED ON FEELINGS

Experienced Emotions and Coping
y

Post-decision feelings

Mispredictions of feelings
y

Affective Forecasting

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SUMMARY
Post-Decision
y

Dissonance

Inconsistency in beliefs y Dealing with post-purchase dissonance

Learning
y

from Consumer Experience

Hypothesis testing

How
y

Do Consumers Make Satisfaction or Dissatisfaction Judgments?

Disconfirmation theory y Attribution theory y Equity theory y Satisfaction based on Feelings

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RESPONSES TO DISSATISFACTION
Complaints
y

(i.e., talking to the firm)

When Complaints Are Likely to Occur MAO Severity Attribution

Negative
y

WOM
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i.e., talking to other consumers

CUSTOMER DISSATISFACTION
Is a major problem Dissatisfied customers stop purchasing, complain, and spread negative WOM. The average business does not hear from 96% of its unhappy customers. The average person with problems tells 9 or 10 people. But also an opportunity! 95% of complainers will do business with you if complaint is resolved quickly.
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IS CUSTOMER SATISFACTION ENOUGH?

Customer

Retention

After-sales y Relationships y Extras

y

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OPTIONS FOR POST-ACQUISITION DISPOSITION

Away Trade Recycle Sell

Give

Use

Up Throw Away Abandon Destroy

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QUIZ 1: SAMPLE QUESTION

Consumers deal with decision dissonance by:

a) b) c) d) e)

Ignoring dissonant information Selectively interpret information Downgrade other options not chosen Search for information that supports chosen option All of the above

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QUIZ 1: SAMPLE QUESTION

It was discovered that several children had developed food poisoning from eating a hamburger at an outlet of a local restaurant chain. The company put out a message saying that the problem had been caused due to a power outage at their refrigeration, and would not happen again. This message was appealing to:
a) b) c) d) e)

Product evaluations Customer relationship management The perceived stability of the problem The type of disconfirmation Consumers perceptions of equity
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ANNOUNCEMENTS

No class on March 1, quiz 1 at 7pm For class on March 6, read Chapter 3

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