Chapter 15 Consumer Relationships

1. Chapter 15 Consumer Relationships

2. 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

3. Learning Outcomes • Describe each component of true consumer loyalty • Understand the role that value plays in shaping loyalty and building consumer relationships

4. 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

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

6. 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

7. 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

8. Word-of-Mouth (WOM) • Negative WOM • Positive WOM

9. 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

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

11. 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

12. 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

13. 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

14. Customer Commitment • A combination of high customer share and a strong feeling of attachment, dedication, and sense of identification with a brand • Antiloyalconsumers - Do everything possible to avoid doing business with a particular marketer

17. 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

18. 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