How price increases affect future purchases: The role of mental budgeting,income, and framing

This article suggests that mental budgeting processes provide afurther understanding of how and to what degree price increases negatively affect a customer's future purchase behavior in a particular category of expenses. Furthermore, the authors analyze how customer income and different price presentation tactics alter this reaction. Results of two experimental studies using both students and non‐students show that customer income attenuates the negative effect of a price increase on the likelihood of a future purchase in a particular expense category. As an underlying mechanism, the influence of customer income on future purchase behavior is partially mediated by the degree to which customers engage in mental budgeting. Moreover, mental budgeting strengthens the negative effect of a price increase on a future purchase in the same category of expenses, whereas it does not alter the effect of a price increase on a future purchase in another category. Finally, the framing of a price increase as a percentage versus in absolute terms leads to a lower likelihood of a future category purchase. © 2009 Wiley Periodicals, Inc.     

Electronic Logistics Service Quality (e‐LSQ): Its Impact on the Customer’s Purchase Satisfaction and Retention

The Internet retailing industry continues to grow rapidly. Several Internet retailers are, however, struggling to retain customers due to the high level of competition among incumbents. We propose that customer satisfaction with the order fulfillment process is an important determinant of overall customer satisfaction with the retailer, as well as with the extent of customer retention enjoyed by the retailer. This paper offers a new concept for electronic logistics service quality and investigates the relationship between the quality of online fulfillment and the ensuing retention of customers, using archival data on 260 online retailers. The structural equation model results indicate that satisfaction with the physical distribution quality and cost are positively related with customer’s purchase satisfaction and customer retention. Additionally, the results indicate that while purchase satisfaction is a strong indicator of customer retention, underlying drivers of purchase satisfaction do not have nearly the same impact on customer retention directly as they have on purchase satisfaction.     

“Let's make a deal:” Price outcomes and the interaction of customer persuasion knowledge and salesperson negotiation strategies

In response to increased consumer empowerment and frugality, many business-to-consumer (B2C) firms now negotiate “deals” with customers. Understanding how buyer and seller inputs affect negotiation outcomes is important because successful completion, or a closed sale, results in perceived value (based on the negotiated price) for both the customer and the seller. We suggest negotiation is influenced by the persuasion knowledge of the customer and the negotiation strategies used by the salesperson to manage conflicts that arise during the process. Using unique dyadic data from the automotive industry that combines multisource (salesperson and customer) survey data with objective purchase price information, we find that price outcomes and customer satisfaction depend on the different interactions of customer persuasion knowledge and salesperson negotiation strategies. The results suggest that perceived value may be generated for both the selling firm and the customer based on these unique inputs.     

When the customer has left the store: An examination of the potential for satisfaction rub-off effects and purchase versus no purchase implications

Two lacunae in the relationship marketing literature are examined in this paper: (1) effects of satisfaction stemming from one particular store visit on the customer׳s relation to other stores (the existing literature typically focuses on the customer׳s relation to one satisfaction-creating store), and (2) the extent to which the impact of customer satisfaction on future intentions is moderated by what happens during the satisfaction-creating visit in terms of purchase versus no purchase (the existing literature typically assumes that the customer subject to satisfaction has purchased something, despite the fact that the reality of retailing consists of many customers leaving stores without purchases).     

服务质量构成要素对顾客满意影响力差异研究--现有顾客同潜在顾客间的比较

本研究通过对银行服务业现有顾客样本和潜在顾客样本的比较分析发现:两种不同类型的顾客样本分析结果都显示服务互动质量和结果质量要素对顾客满意都有显著正影响,顾客满意对(重复)购买或口头传播等行为意向有积极效应。物理环境质量对顾客满意的显著影响效应只是在潜在顾客样本中发现,而在现有顾客样本中并不显著。现有顾客样本的分析结果显示三方面服务质量要素对顾客满意的影响力是有显著差异的,而对于潜在顾客样本,三方面的服务质量要素对顾客满意的形成所起的作用没有显著差别。     

Does Service Employee Arrogance Discourage Sales of Luxury Brands in Emerging Economies?

Upscalex stores selling luxury brands from Western, developed countries are having a strong presence in many emerging markets. However, it is not uncommon to find that the service employees of these stores are arrogant and inhospitable. This article uses a dual attitudes perspective to show how service employee arrogance affects customers’ attitudes and purchase intentions toward luxury brands in emerging markets. Experimental findings show that arrogance produces dual attitudes, with positive implicit attitudes exerting a stronger influence than unfavorable explicit attitudes on purchase intentions. In addition, for customers with high self‐esteem, service employee arrogance has a negative effect on their purchase intentions. In line with the expectation disconfirmation model, when service employees change their arrogant attitudes and subsequently show hospitality, customers also change their expectations. When the improved service exceeds customers’ expectations, their explicit attitudes turn positive and exert a stronger influence on purchase intentions than when service employees are consistently hospitable.     

Share of wallet in retailing: the effects of customer satisfaction, loyalty cards and shopper characteristics

In retailing, consumers typically patronize multiple outlets. Thus, an important issue is why consumers vary in how they divide their purchases across outlets and how outlets can get a greater share of consumer expenditures. Two potential avenues for increasing customer share are to raise customer satisfaction, and increase repeat purchase through loyalty cards. This study examines the effects of customer satisfaction and loyalty cards as well as consumer characteristics on customer share spent on the primary grocery store. The findings suggest that customer satisfaction has a positive, albeit modest, effect on share while consumer economic shopping orientation has a negative direct effect on share. The economic orientation of shoppers, their felt importance of a personal relationship with store personnel, and the level of their aggregate purchase volume moderate the effect of satisfaction on customer share. Finally, the results provide mixed support for the impact of loyalty cards on customer behavior.     

Receiving word-of-mouth from the service customer: An emotion-based effectiveness assessment

This study examines how receiving negative and positive word-of-mouth from satisfied and dissatisfied customers influences the potential customer. By explicitly including responses in terms of emotions—which hitherto have been neglected in research on word-of-mouth—it was found that emotional contagion and affect infusion were involved in the response process. The net effect was that receiving positive word-of-mouth as opposed to receiving negative word-of-mouth produced more positive evaluations of the service firm in the word-of-mouth conversation and higher levels of purchase intent vis-à-vis this firm. The results are thereby consonant with implicit assumptions in existing literature that word-of-mouth from the existing customer may have a significant impact on the potential customer, and this study indicates that emotional variables play an important role in the influence process.     

Customer satisfaction and price tolerance

This study investigates the association between customer satisfaction and willingness-to-pay or price tolerance. The goal is not only to determine whether the association between customer satisfaction and price tolerance is positive or negative but also to gauge the degree of association. The Swedish Customer Satisfaction Barometer provides the data. The empirical analysis indicates a negative association between the level of customer satisfaction provided by the firm and the degree of price tolerance exhibited by its customers. However, a positive association is found between year-to-year changes in the levels of customer satisfaction and price tolerance.     

Customer happiness as a function of perceived loyalty program benefits - A quantile regression approach

Customers consider pursuit of happiness to be fundamental to their purchase experiences; thus, companies are increasingly looking for opportunities to bring happiness to customers especially in their consumption activity. The current study undertakes analysis of effect of perceived benefits of loyalty programs and customer satisfaction on customer happiness/purchase enjoyment if he/she has loyalty program membership. Empirical study with 407 participants found that Discovery and Entertainment Benefit (DEB) and Satisfaction Derived (SD) have an effect on customer happiness/purchase enjoyment while being a loyalty program member. Quantile regression analysis was used to analyze if independent variables have a differential effect on different levels of the dependent variable i.e. customer happiness/purchase enjoyment from use of loyalty programs. Since DEB and SD were found to be positively significant in influencing customer happiness/purchase enjoyment, companies should focus on balancing these aspects of customers’ consumption experience.     

Discovering the variables that influence new home‐buyer service satisfaction

While home builders traditionally think of customer service in terms of upgrades and mortgage options, home buyers are thought to view the quality of service on a much broader basis. Previous research has identified five dimensions of service quality: appearance, reliability, timeliness, knowledge, and empathy. Home‐buyer satisfaction with service quality is then the result of home builders providing services that are perceived as meeting or exceeding buyer expectations. Although much research has been done regarding home‐buyer satisfaction with service quality, there is still a gap between builders' and home buyers' perception of the quality of service. Builders need to identify and understand home‐buyer needs in order to constantly improve service quality. This paper describes an exploratory study that focused on customer satisfaction with service quality. The objective of this study was to assess the correlations between various factors on home‐buyer expectations and their perceptions of service quality. Demographics considered in this study included age, gender and household income, while transaction characteristics included purchase price, number of occupants and house size. Characteristics such as higher income, higher purchase price, and larger house size appeared to value dimensions such as reliability most highly. Characteristics such as lower income, lower purchase price and smaller house size appeared to value dimensions such as empathy and appearance most highly. Gender, age and household size did not have significant associations with expectations or relative importance, but age and household size were associated with actual perceptions of service dimensions. Understanding the influence of these variables on customer satisfaction with service quality can positively impact home builders through improved reputation and increased local referrals.     

E-retail factors for customer activation and retention: An empirical study from Indian e-commerce customers

Customer satisfaction has emerged as one of the most important factors that guarantee the success of online store; it has been posited as a key stimulant of purchase, repurchase intentions and customer loyalty. A comprehensive review of the literature, theories and models have been carried out to propose the models for customer activation and customer retention. Five major factors that contributed to the success of an e-commerce store have been identified as: service quality, system quality, information quality, trust and net benefit. The research furthermore investigated the factors that influence the online customers repeat purchase intention on the basis of the Means End Chain theory (MEC) and Prospect theory. By hypothesising that a combination of both utilitarian value and hedonistic values are needed to affect the repeat purchase intention (loyalty) positively, Structural equation model has been presented on the primary data collected from the Indian online shoppers. Results indicate the e-retail success factors, which are very much critical for customer satisfaction. By increasing the utilitarian value and hedonistic values derived by the customers, customer satisfaction and hence the customers repeat purchase intention can be increased significantly.     

Value‐driven Internet shopping: The mental accounting theory perspective

When faced with competition and the ease with which customers can compare prices across sellers, Internet vendors often lower prices in a bid to increase sales. However, recent research reports that even price‐sensitive customers do not always purchase from Internet vendors offering the lowest prices. In contrast, value has been considered a key motivator of customer decision making in economics and marketing. However, little is known about the role and effect of value in Internet shopping. This study examines online customer purchase decision making from the value perspective based on mental accounting theory. This study also identifies monetary (perceived price) and non‐monetary (perceived risk, convenience, and pleasure) determinants of value. This study further explains how the individual determinants affect online purchase decision making directly and indirectly though value perception. The findings of this study offer Internet vendors practical suggestions for increasing online sales. This study, with its results, also helps advance knowledge of electronic commerce. © 2009 Wiley Periodicals, Inc.     

环境不确定性、客户集中度与投资效率

基于大客户与企业间隐喻契约关系对企业专用性投资的传导性影响机理,从客户集中度研究视角切入,考察了环境不确定性约束条件下大客户对企业投资效率的影响机制与后果。研究发现,客户集中度对企业非效率投资存在“选择性”不对称影响,显著加剧了企业投资过度,却未导致企业投资不足;进一步分析表明,环境不确定程度是两者关系的调节性因素,不确定性较低时两者关系显著且稳健,不确定性较高时两者间不再具有显著关系。     

Is showrooming really so terrible? start understanding showroomers

The customer journey is more omni-channel than ever. In this scenario, so-called showrooming behavior emerges as a growing trend that is usually considered by retailers as a threat. The purpose of this research is to analyze whether showrooming, when compared with online buying behavior in which the customer does not visit the store prior to the purchase, has a positive effect on the price paid online by the customer. The empirical research is based on the database compiled by GfK, which contains detailed information about the shopping journey of 4067 customers who purchased products from different retail sectors. The results, derived from the estimation of several regression models, reveal that showroomers who use their smartphones in store are more likely to purchase products at a higher price, which explains why these customers can be of special interest to retailers.     

Positive emotion bias: Role of emotional content from online customer reviews in purchase decisions

Abundant research has investigated the impact of review valence on purchase decisions, but has reported mixed findings. To reconcile these mixed findings, this study unearths the understanding of review valence from the perspective of the emotional content in online customer reviews. To explore the effect of emotional content on purchase decisions and the moderating role of emotional content on non-emotional content and purchase decisions based on a heuristic-systematic model, a laboratory experiment with 106 subjects was used to empirically test the research hypotheses. The results show that pleasant online customer reviews lead to a higher purchase likelihood compared to unpleasant ones. Perceived credibility and perceived diagnosticity have significant influence on purchase decisions, but only in the context of unpleasant online customer reviews. The findings demonstrate positive emotion bias for online customer reviews, and carry important practical implications for both sellers and customers.     

Better or Worse? Effects of online promotion habits on customer value: An empirical study

Online frequent and uninterrupted price discounts easily cause customers to form general tendencies to purchase promotions, or ‘online promotion habits’. Compared with offline promotion shopping, the distinct features of online promotion shopping make customer behaviours highly changeable and leave the effects of online promotion habits on customer value a puzzle. Using a dataset of real transactions from a leading online apparel retailer in China, this study makes continuous observations of customers’ online promotion habits. Drawing on the behavioural learning theory, we empirically investigate the dynamic effects of online promotion habits on customer value. The results reveal that after customers form online promotion habits, their customer value increases significantly. Furthermore, among customers with online promotion habits, online promotion habits exert an inverted U-shaped effect on customer value. Namely, as online promotion habits strengthen, customer value increases accordingly, yet negative outcomes show if online promotion habits exceed a certain level. We discuss the theoretical and managerial implications of our findings, which will enable researchers and practitioners to measure and dynamically manage customers’ online promotion habits.     

The influence of satisfaction on customer retention in mobile phone market

This study examines the determinants of customer satisfaction and customer loyalty in the Peruvian mobile phone market. Based in a survey to 1259 customers, Multinomial Logit and GSEM estimations show how determinants of customer satisfaction can be assessed when satisfaction is measured through ordered categorical data. The results confirm that in mobile phone market Customer Satisfaction influences strongly on Customer Loyalty, and in turn Loyalty is an important determinant of Customer Retention. In contrast with previous literature, this study identified the differentiated influence of diverse factors on positive and negative customer satisfaction categories. Indeed while results show that quality of service assessments made by customers had a significant impact on both negative and positive customer satisfaction categories; assessments of other service attributes like customer care, information on tariffs and plans and billing clarity, only showed a significant statistical influence on positive categories of customer satisfaction. Similar asymmetrical results were found with regard to other economic, socioeconomic and geographical determinants of customer decisions. As well, an analog effect is also observed in the relationship between customer satisfaction and loyalty, where only positive satisfaction assessments helps to explain the loyalty of users. Finally, results show that while satisfaction can be identified as a powerful cause of CR, switching barriers did not deter more demanding customers to switch to alternative carriers, suggesting that recent pro-competition regulatory reforms implemented in Peru contributed to reduce these barriers to competition in mobile markets.     

Employee display of burnout in the service encounter and its impact on customer satisfaction

This study examines if employee display of burnout symptoms in service encounters has an impact on customer satisfaction. An experimental approach was used in which the employee's display of burnout (absent vs. present) and the service performance level (low vs. high) were the manipulated factors. The results show that employee display of burnout had a negative impact on customer satisfaction, that this effect was mediated by customers’ appraisals of the employee's emotional state, and that the effect was stronger under the condition of low service performance.     

Examining impacts of negative reviews and purchase goals on consumer purchase decision

Extensive literature has studied the impact of positive online reviews on consumers’ purchase decisions. Research on the role of negative reviews in consumer price perception is heavily under-investigated. This study examines effects of negative reviews on consumer price perception and subsequent purchase behavior while considering the moderating effect of purchase goals. Results from two experiments show that the proportion of negative reviews has stronger negative impacts on purchase decision for consumers with a purchase goal than those without. This research contributes to growing knowledge about negative online reviews and consumer goal literature and offers practical implications for online retailers.