chapter 15 consumer relationships

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.1

Chapter 15 Consumer Relationships


Learning Outcomes

• List and define the behavioral outcomes of consumption

• Know why and how consumers complain and spread word of mouth and know the ramifications of for the marketing firm

• Use the concept of switching costs to understand why consumers do or do not repeat purchase behavior


Learning Outcomes

• Describe each component of true consumer loyalty

• Understand the role that value plays in shaping loyalty and building consumer relationships

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Outcomes of Consumption

• Procedural justice - The extent that consumers believe the processes involved in processing a transaction, performing a service or handling a complaint is fair

• Critical incident - Exchanges between consumers and business that the consumer views as unusually negative


Complaining Behavior

• Occurs when a consumer actively seeks out someone to share an opinion about a negative consumption event


Handling Service Complaints Effectively

• Thank the customer for providing the information• Ask questions to clarify the issue• Apologize sincerely• Show empathy for the customer’s situation• Explain the corrective action that will take place• Act quickly• Follow up with the customer after the corrective

action


Results of Not Complaining

• Consumer may remember the incident• May complain to others about the incident• Consumers may retaliate with revenge-

oriented behaviors– Rancorous revenge– Retaliatory revenge


Word-of-Mouth (WOM)

• Negative WOM• Positive WOM


Influences of Word-of-Mouth

• Negative public publicity • Doing nothing• Denying responsibility• Taking responsibility• Releasing information• Participating in negative WOM• Implications of negative WOM• 3rd party endorsements


Switching Behavior

• Consumer chooses a competing choice, rather than the previously purchased choice, on the next purchase occasion


Categories of Switching Costs

• Procedural - Involve lost time and effort• Financial - Total economic resources that must

be spent or invested as a consumer learns how to obtain value from a new product choice

• Relational - Emotional and psychological consequences of changing from one brand/retailer/service provider to another


Satisfaction and Switching

• Switching costs a reason why consumer satisfaction/dissatisfaction results fail to predict future purchasing behavior

• Competitive intensity - The number of firms competing for business within a specific category


Customer Share

• The portion of resources allocated to one brand from among the set of competing brands

• Customer inertia– Consumer tends to continue a pattern of behavior

until some stronger force motivates him or her to change


Customer Commitment

• A combination of high customer share and a strong feeling of attachment, dedication, and sense of identification with a brand

• Antiloyal consumers - Do everything possible to avoid doing business with a particular marketer


Relationships and the Marketing Firm

• Exchange between a business and a consumer comprise a relationship– Customers have a lifetime value to the firm– True loyalty involves continuing series of

interactions and feelings of attachment between customer and firm

• Relationship quality - Degree of connectedness between a consumer and a retailer


Value and Relationship Quality

• A healthy relationship between a consumer and a marketer enhances value for the consumer and the marketer– When relationship quality is very strong, the

marketer and the customer act as partners

chapter 15 consumer relationships

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learning outcomesdescribe

learning outcomeslist

consumer relationships1

consumer views

consumer relationships3

negative consumption