MKTG 4120 - Chapter 18 Review Questions

What is affective performance?

Affective performance is the emotional response that owning or using the product provides. It may arise from the instrumental and/or symbolic performance or the product. That is, a suit that produces admiring glances or compliments may produce a positive affective response. Or, it may be the primary product benefit such as an emotional movie or novel.

What determines satisfaction for online retailers?

Initial research indicates that convenience, site design, and financial security are the dominant factors.

What courses of action can a consumer take in response to dissatisfaction? Which are used most often?

When dissatisfaction occurs, a consumer can either take action or take no action. When no action is taken, a less favorable attitude is likely to result. Action can involve: (1) complaining to the store or manufacturer (2) no longer buying that brand or at that store (3) warning friends (4) complaining to private or government agencies (5) initiating legal action.

What factors influence e-loyalty?

1. Security and Privacy 2. Customization and personalization 3. Interactivity 4. Convenience 5. Online communit

What factors influence consumer satisfaction? In what way do they influence consumer satisfaction?

A consumer's evaluation of a purchase is influenced by the purchase itself, post-purchase dissonance, product use, and product disposition. The outlet or the product or both may be involved in the evaluation. Consumers may evaluate each aspect of the purchase ranging from information availability to price to retail service to product performance. A particular alternative such as a product, brand, or retail outlet is selected because it is thought to be a better overall choice than other alternatives that were considered in the purchase process. Whether that particular item was selected because of its presumed superior functional performance or because of some other reason, such as a generalized liking of the item, consumers have some level of expected performance that it should provide. After (or while) using the product or outlet, the consumer will perceive some level of performance. This perceived performance level could be noticeably above the expected level, noticeably below the expected level, or at the expected level. Satisfaction with the purchase is primarily a function of the initial performance expectations and perceived performance relative to those expectations

What is relationship marketing? What strategies are involved?

Attempts to develop an ongoing, expanding exchange relationship with a firm's customers. In many ways it seeks to mimic the relationships that existed between neighborhood and county stores and their customers many years ago. Relationship marketing has five strategy elements: (1) developing a core service or product around which to build a customer relationship (2) customizing the relationship to the individual customer (3) augmenting the core service or product with extra benefits (4) pricing in a manner to encourage loyalty (5) marketing to employees so that they will perform well for customers.

What is the difference between repeat purchasers and committed customers?

Brand‑loyal purchasers are psychologically or emotionally committed to the brand. Repeat purchasers continue to buy a brand out of habit, lack of choice, because it is the cheapest or for other reasons, but they feel no attachment to the brand.

In what ways can a consumer reduce post-purchase dissonance?

By increasing the desirability of the brand purchased, one can reduce feelings of post-purchase dissonance, decreasing the desirability of rejected alternatives, or decreasing the perceived importance of the purchase.

What characteristics of a purchase situation are likely to contribute to post-purchase dissonance?

Characteristics of the purchase situation which are likely to contribute to post-purchase dissonance include: The degree of irrevocability of the decision. The easier it is to alter the decision, the less likely one would experience dissonance. The importance of the decision to the consumer. The more important the decision is to the consumer, the more likely dissonance will occur. The difficulty of choosing among alternatives. The harder it is to select from among the alternatives, the more likely one will experience postpurchase dissonance. The individual's tendency to experience anxiety. Some individuals have a higher tendency to experience anxiety than others. The higher the tendency to experience anxiety, the more likely the individual will experience post-purchase dissonance.

What is churn? How does it affect profits?

Churn is a term used to refer to turnover in a firm's customer base. If a firm has a base of 100 customers and 20 leave each year and 20 new ones become customers, it has a churn rate of 20 percent. It typically costs more to obtain a new customer than to retain an existing one and new customers generally are not as profitable as longer term customers.

What is the relationship between customer satisfaction, repeat purchases, and committed customers?

Customer satisfaction with a brand or store is generally necessary for repeat purchases to occur. If other alternatives are readily available, consumers not satisfied with a brand/store's performance will generally try them in the future. However, satisfaction is not sufficient to produce committed customers. The customer must come to identify with the firm/brand and/or believe that it, to some extent, is committed to him or her.

What is meant by the disposition of products and product packaging, and why does it interest governmental regulatory agencies and marketers?

Disposition of a product and/or its packaging refers to how the product and/or packaging is disposed of before, during, or after product use. Consumer disposition behavior is important to governmental agencies like the Environment Protection Agency (EPA) because of potential harm disposed products and/or their packaging present to the environment. Product disposition is important to marketing strategy because: (a) sometimes disposition must precede product use due to financial or space limitations (b) certain disposition strategies may give rise to a used or rebuilt market (c) difficult or unsatisfactory disposition alternatives may cause some consumers to withdraw from the market for a particular item.

What are the major post-purchase processes engaged in by consumers?

Following a major purchase, consumers are likely to experience some post-purchase dissonance. With or without dissonance, product use and package disposition generally occurs. This is normally followed by product disposition. Evaluation of the purchase experience, the product, and disposition of the product and package occurs simultaneously with and following each of these events. This evaluation produces some level of satisfaction that in turn causes brand switching, increased product/brand use, repeat purchases, or committed customers.

How does the type of decision process affect the post-purchase processes?

Habitual decisions involve product use, disposition, and very limited evaluation, and generally maintain a high level of repeat purchase motivation. Extended decision making also involves product use and evaluation. However, it is likely to also involve post-purchase dissonance, a thorough evaluation of the product and the purchasing process, and a more complex impact on repeat purchase motivation. Post-purchase processes for limited decisions generally fall between these extremes.

What is the difference between instrumental and symbolic performance, and how does each contribute to consumer satisfaction?

Instrumental performance relates to the physical functioning of a product while symbolic performance of a product relates to the aesthetic or image‑enhancement performance of a product. Dissatisfaction is most likely to be caused by a failure of instrumental performance, while complete satisfaction requires instrumental performance plus symbolic performance at or above expected levels.

What is e-waste, and why is it a growing concern?

It is toxic chemicals at disposal of old high-tech gadgets, both instrumental and symbolic considerations. i) Instrumental- physical functioning of product ii) Symbolic- aesthetic or image-enhancement performance

Why are marketers interested in having committed customers?

Loyal customers are somewhat immune to competitors' actions and are more likely to purchase the brand at full-price. They also tend to be receptive to line extensions and new products from the same firm.

What are loyalty programs? What do most of them actually do?

Loyalty programs are intended to encouraging repeat purchases. Many are designed to generate repeat purchases rather than committed customers.

What would marketers like consumers to do when dissatisfied? How can marketers encourage this?

Marketers would like consumers to express dissatisfaction directly to the firm. This can be encouraged by providing an 800 telephone number (on packaging and in advertisements) that consumers may call to communicate dissatisfaction. Using the Internet as a service tool is also a good way to encourage interaction with the consumers.

What is the Net Promoter Score?

Measures the percentage of a firms promoter customer base left after subtracting out the firms detractors. Promoters-detractors

What is meant by product nonuse and why is it a concern of marketers?

Occurs when a consumer actively acquires a product that is not used at all or used only sparingly relative to its potential use. Nonuse can occur due to post-purchase dissonance. One way to reduce such dissonance is to return the purchased item and withdraw from the purchase decision. While this is an extreme response, it does occur. For many products and most services the decision to purchase and to consume are made simultaneously. . Marketers are concerned because nonuse does not produce a satisfied customer, repeat sales, or positive word-of-mouth communications.

What is consumption guilt?

Occurs when some negative emotions or guilt feelings are aroused by the use of a product or service

What is post-purchase dissonance?

Post-purchase dissonance refers to an after‑purchase psychological condition in which the purchaser experiences some doubt or worry about the wisdom of the purchase just made.

What are the sources of increased profits from longer term customers?

Price premiums since repeat and particularly committed customers tend to buy the brand consistently rather than waiting for a sale or continually negotiating price. Referrals generate profits from by new customers acquired due to recommendations from existing customers. Lower costs occur because both the firm and the customer learn how to interact more efficiently over time. Finally, customers tend to use a wider array of a firms products and services over time.

What is use innovativeness?

Refers to a consumer using a product in a new way. Marketers who discover new uses for their products can greatly expand sales.

What are switching costs?

The costs of finding, evaluating and adopting another solution (product).