When do customers offer firms a “second chance” following a double deviation? The impact of inferred firm motives on customer revenge and reconciliation

The present research develops and tests a theory explaining how customers respond to failed service recoveries (i.e., double deviations). This work offers three novel and important conclusions. First, inferences about a firm's motive (negative vs. positive) mediate the impact of perceptions of the double deviation (i.e., severity, blame, and fairness) on resulting outcomes (i.e., customer anger, desire for revenge, and desire for reconciliation). Second, when inferred motive is positive, desire for reconciliation overwhelms desire for revenge, leading customers to choose more reparatory than retaliatory behaviors. Third, following a double deviation, firms that both compensate and apologize to customers can change customers’ inferred motives from negative to positive, leading customers to desire more reconciliation than revenge, and engage in more reparatory than retaliatory behaviors. These studies demonstrate that, contrary to common wisdom, customers do not always respond negatively to a double deviation, and firms still have a “second chance” following a failed recovery.     

Motives for purchase decision-making: combining attribution and functional approaches

The motivations which lead to consumer decisions have been given relatively little research attention, since motivations are difficult to quantify. The four part typology developed by Katz,¹ when combined with self-perceived attributions, provides a useful method of examining the motivational underpinnings of consumer-purchase decisions. This study involved an experimental design to evaluate self perceptions of the four functional motives—ego defensive, value expressive, knowledge and utilitarian. A sample of 105 undergraduate students attributed their use or purchase for each of 52 items to one of the four functional motives. Using these responses as self-perception attributions, two research questions were examined: (i) would the four part typology be useful in explaining self-perceptions of past behaviour? and (ii) would one function of the typology dominate these reports for each item? An across-subject analysis suggested the four part typology could be meaningfully employed within a self-perception context. However, one functional motive dominated attributions for only six of 52 items. Since motivations and consumer behaviour are clearly linked, this research offers a method of providing additional insight into that linkage. The paper concludes with further research possibilities that integrate the functional motive approach and self-perception attributions.     

Linking multi-channel customer behavior with shopping motives: An empirical investigation of a German retailer

Operating multiple channels, in store as well as non-store, allows a retailer to cater to the different shopping motives of its customers. This research into the buying behavior of 525 customers of a multi-channel retailer that operates five channels in Germany shows that most customers use only one channel within a buying process, selecting the channel that best satisfies their shopping motives in each situation. Based on exploratory qualitative and quantitative research, this study identifies five shopping motives: “recreational orientation”, “convenience orientation”, “independence orientation”, “delivery-related risk aversion” and “product- and payment-related risk aversion”. In the majority of the store channels examined in this study (chain stores and bakeries), single-channel users primarily look to satisfy emotional and social needs. Single-channel users of non-store channels (catalogue and online-shop) look for convenience and strive for independence. Multi-channel users, who obtain their information from the online-shop and then make their purchase in the chain store, are combining the independence of online-shop information with the reduction of risks associated with buying products in the chain store. These findings can be used to develop recommendations for managing the individual channels.     

Suspicion and Perceptions of Price Fairness in Times of Crisis

Times of crisis bring about increased demands on businesses as shortages, or unexpected but significant, business costs are encountered. Passing on such costs to consumers is a challenge. When faced with a retail price increase, consumers may rely on cues as to the motive behind the increase. Such cues can raise suspicion of alternative motive (e.g., taking advantage of the consumer) affecting consumers’ judgments of price fairness. This research investigates two triggers of suspicion: salience of alternative motives, and behavior judged to be out-of-character for the business. Results of the two studies within crisis contexts indicate that suspicion is created when alternative motives are salient and when a retailer acts out-of-character. Multiple group analyses revealed that suspicion induced negative affect and subsequent perceptions of price fairness. When suspicion was present, more negative feelings toward the retailer and judgments of price unfairness resulted.     

Creating customer repurchase intention in Internet retailing: The effects of multiple service events and product type

Internet retailing literature shows that customers׳ experience with a retailer׳s website and order fulfillment separately influence repurchase intention. This study examines these two experiences׳ interactive effects on repurchase intention. Our research model includes a product type as a moderator, because the type of product can likewise affect a customer׳s experience with the retailer׳s website and order fulfillment. Results of multiple-group structural equation modeling (SEM) from customer reviews of 306 Internet retailers demonstrate that the interactive effects of a web site experience and order fulfillment are significant. In the interactive mechanism, order fulfillment experience is proven to serve as a proximal cause of repurchase intention. The moderating role of product type is significant as well. This finding suggests that practitioners should have unmatched measures for retailing different types of goods.     

Consumer response to retailer use of cause-related marketing: Is more fit better?

Although marketers increasingly rely upon cause-related marketing strategies to increase sales, controversy exists regarding whether a retailer should partner with causes offering high or low fit levels with its core business practices. The present investigation extends prior research by examining how retailer–cause fit affects consumer evaluations of retailers’ cause-related marketing strategies. The results indicate that the effects of retailer–cause fit are moderated by consumer perceptions of the retailer's motive for engaging in cause-related marketing (Study 1), by the affinity that consumers hold for the social cause component of the campaign (Study 2), as well as by the interactive effects associated with the two moderators (Study 3).     

Corporate philanthropy, attitude towards corporations, and purchase intentions: A South Korea study

This study proposes a model integrating attributions about perceived motives of corporation philanthropy (CP), attitude towards the corporations conducting CP, and subsequent purchasing intention. The model is tested in South Korea where the culture and business environment are different from that in North America. Data are collected from two different stakeholder groups of South Koreans (127 managers and 229 consumers: total sample of 356). The results based on the total sample indicate that only when corporations are perceived as conducting CP for public-serving (altruistic) motives, the CP significantly influences attitude towards the corporations. When the sample is divided into the two different stakeholder groups, non-identical patterns of relationships between motives and attitudes are observed. Managers show favorable relationships between motives and attitude, while consumers become skeptical for the reactive motive. The functional relationships between motives and attitude proposed in the model are partially supported with the South Korean data.     

The dark side of up-selling promotions: Evidence from an analysis of cross-brand purchase behavior☆

This research investigates how up- and down-selling promotions affect customers’ cross-brand purchasing and churn behavior at a multi-brand retailer. We employ a hidden Markov model that accounts for the dynamics of customers’ latent brand preferences and attrition and captures the resulting purchase behavior in response to promotional offers. Using data on coupon promotions and purchase transactions from an online retailer, we find that coupons for a higher-end brand increase customers’ likelihood of purchasing the brand. While this suggests that the retailer can increase its short-term revenues by sending coupons for the higher-end brand to customers of the lower-end brand, we find that customers up-sold via coupons are more likely to switch back to the lower-end brand, in comparison to other customers of the higher-end brand, limiting the positive effect of up-selling promotions in the long term. Moreover, lower-end brand customers’ promotion-induced brand switching leads to their increased attrition from the retailer, which negatively affects long-term purchase behavior and revenues. In contrast, when triggered by down-selling coupons, customers’ brand switching does not impact their attrition. Based on these findings, we demonstrate how our model-based approach can assist marketers’ multi-brand couponing decisions.     

Shopping motives,store attributes and shopping enjoyment among Malaysian youth

Youth shoppers are an emerging age group that is recognized as a meaningful market segment, yet there is lack of extant shopping enjoyment research explicit to the cohort especially in Malaysia context. This study endeavors to measure shoppers' shopping enjoyment and to explore the effect of both internal and external factors in influencing their shopping enjoyment levels. Shopping motives as the internal contributor is personal-specific while store attributes serve as the external aspect is regarded as situational-specific. By employing hierarchical multiple regression analysis, it was found that anticipated utility dimension from shopping motive variable and enhancement dimension from store attribute variable explained the variance in shopping enjoyment. Narrowing to the two variables identified, anticipated utility (β=0.198) from shopping motives was having more influential power than enhancement derived from store attributes (β=0.163) in explaining shopping enjoyment. The findings assist retailers in enhancing the perceived value of customers.     

Care management to improve retail customers' and employees’ satisfaction

In retailing, ongoing management is needed to avoid compromising customer relationships and organizational performance because of consumers' or employees' dysfunctional behavior. This paper contributes to understanding how care management strategies can improve in-store experiences for customers and employees by adapting the Chronic Care Management (CCM) theory to retailing. Across two studies, one on customers (Study 1) and one on retail employees (Study 2) we show that empowerment reduces dysfunctional behavior, enhancing satisfaction. Furthermore, we demonstrate that customers' and employees’ emotional bond with the retailer (i.e., store attachment) moderates the relationship between dysfunctional behavior and satisfaction, buffering dissatisfaction from dysfunctional behavior.     

Marketplace attributions and consumer evaluations of discount claims

Two studies were conducted in which respondents were exposed to test advertisements in which the amount of savings implied by a reference price discount claim was manipulated. Respondents' attributions concerning the advertiser's motives for making the reference price discount claim were measured, along with dependent variables that assessed the respondents' evaluations of the price offer. Results across both studies indicated that the attributions about the advertiser's motives for the price discount offer had a significant effect on consumers' evaluations of the offer. Furthermore, across both studies, a person-stimulus-circumstance taxonomy appeared consistent with the structure of the attributions that respondents made when presented with reference price claims.     

Discovering India's three levels of luxury consumption: An exploratory research to find a conceptual framework

Luxury marketing research has moved from functional product attributes to a ‘democratized’ view in emerging economies. This seems to be based on the development of interactive and digital communications. Luxury research studies have historically focused on the brand's and marketer's perspectives. Thus, little attention has been given to the consumer's view of what we consider to be the individual drivers, i.e., the ‘inner and outer self’ and how that impacts luxury consumption. This paper presents a framework of luxury and self, using concepts such as interdependent or outer, independent or inner, and a new concept of ‘digital self’. These appear as three levels of luxury consumption, i.e., conspicuous, individual, and interactive. The interdependent self is influenced by the external motives and leads to conspicuous luxury behavior. Individual self is affected by internal motives and thus influences individual luxury consumption. Digital self affects the networks of motive and relationships and thereby impacts interactive luxury consumption and behavior.     

Interactive Technologies and Retailing Strategy: A Review,Conceptual Framework and Future Research Directions

During the past decade, a number of interactive technologies, including the Internet, have fundamentally transformed how retailers compete in the marketplace. In a similar vein, emerging interactive technologies can be expected to significantly alter the retailing landscape through their impact on retailing strategy and operations. Furthermore, it is conceivable that certain emerging interactive technologies will be perceived by some retailers as enablers (tools to more effectively compete in the marketplace) and by other retailers as disruptors of the present ways of doing business. Interactive technologies can either be generic, a technology that is readily available from an information technology (IT) vendor and is widely adopted by retailers, or proprietary. An interactive technology that is proprietary can enable a firm to generate economic rents from the innovation for an extended duration of time. Investing in a generic interactive technology, however, may be perceived as a cost of doing business for a retailer, and not a potential source of sustainable competitive advantage. However, a retailer's complementary resource endowments may enable the retailer to more effectively leverage a generic technology relative to its competitors and thereby achieve a sustainable competitive advantage. In this paper, we review the related literature, develop a process model delineating the mechanisms by which an interactive technology can affect and necessitate changes in retailers' strategies and identify directions for future research.     

How do storefront window displays influence entering decisions of clothing stores?

Store window displays play important roles in influencing shoppers' store entry decisions and their perceptions of brand/store image. The purpose of this study is to explore how shoppers' perceptions of window displays interact with situational variables in making their store entry decisions. We conducted experimental studies by using merchandise-focused versus artistic storefront window displays under situations comprising of shopping motive types (purchase versus recreational) and cognitive load levels (low versus high). Our results demonstrate the effectiveness of these window displays bounded by the interplay between shopping motives and cognitive loads.     

The effects of store brand loyalty on store loyalty: evidence from the Spanish market

This article studies the impact of retailers' store brands on store performance. Specifically, we analyze the extent to which store brands contribute to store loyalty. On the one hand, a positive relationship between customers' familiarity with and loyalty to the retailer's own brand and customers' loyalty to the retailer should result from the potential of the store brand to differentiate the retailer. On the other hand, an negative relationship between customers' familiarity with and loyalty to the retailer's own brand and customers' loyalty to the retailer may result from store brands' association with more price-sensitive customers, who have a higher propensity to buy at different stores that offer the best bargain. The empirical analysis, conducted with a sample of customers of leading retailers in the Spanish detergent market, shows no relationship between store brand loyalty and loyalty to the retailer. Although the purchase of store brands relates positively to higher loyalty to the retailer, this relationship deteriorates with the degree of exclusivity of store brands within the customer's shopping basket.     

Comparing the effectiveness of rewards and individually targeted coupons in loyalty programs

Loyalty programs (LP) and rewards are ubiquitous in retailing, designed to increase customer expenditures and retention, gather abundant customer-level data, and design individually targeted coupons. Although studies have analyzed the individual impacts of LP rewards and targeted coupons on shopping trip incidence and expenditures, they have not compared the two instruments. By investigating the LP of a leading German grocery retailer that uses both LP rewards (points to redeem for free products) and individually targeted coupons, the current study establishes a comparison of their profitability and relative contributions to increasing shopping trips and expenditures. The investigated LP also relies on in-store kiosks to interact with customers, so they can decide when to redeem LP points and request coupons. By jointly modeling the effects of LP point redemptions and coupons on shopping trip incidence and expenditures, using their decision to access the kiosk as a dependent variable and rich data that span thousands of customers over 60 weeks, this study reveals that both instruments increase shopping trip incidence, kiosk access, and expenditures. The LP point redemptions have a stronger effect on shopping trip incidence; coupons have a stronger effect on kiosk access. Although a single redemption of LP points leads to a greater increase in expenditures than a single coupon redemption (€1.46 vs. €0.48), coupons yield three times greater expenditures after controlling for usage frequency; lower discounts also contribute to coupons’ higher profitability. Therefore, LP point redemptions and individually targeted coupons are complementary tools for retailers. This empirical study provides practical insights and pertinent managerial implications regarding the management and design of modern LPs.     

Psychological contract violation and customer intention to reuse online retailers: Exploring mediating and moderating mechanisms

This study examines the impact of psychological contract violation (PCV) on customer intention to reuse online retailer websites via the mediating mechanisms of trust and satisfaction. The moderating role of perceived structural assurance (SA) is also investigated. An empirical study conducted among online shoppers confirms the indirect effects of PCV on customers' intention to reuse via trust and satisfaction. The findings also support the moderating impact of perceived SA in the network of relationships. The study underscores the importance of SA as a trust-building mechanism for mitigating the deleterious effects of PCV among online customers, although the role of SA in preserving satisfaction is found to be limited. The findings suggest that online retailers may benefit by investing in SA and addressing the negative effects of PCV proactively rather than simply relying on post-failure service recovery mechanisms.     

Can the Retailer’s ICT Enhance the Impact of Service Recovery Efforts on Customer Satisfaction?

Abstract

Service recovery remains a topic of considerable interest for both academics and practitioners. This paper aims to explore the relations between recovery efforts and causal attributions, satisfaction, and both conventional and online word-of-mouth, as well as the moderating role of information and communication technologies (ICT) on the relationship between retailer’s efforts and satisfaction with the service recovery. On a sample of 336 retail customers who experienced service failure, we use SEM and multigroup analysis. As a result of the data analysis, there is evidence supporting the positive impact of attributions and recovery efforts on satisfaction, and the influence of the latter on both conventional and online word-of-mouth. Furthermore, the moderating influence of technology in the “recovery efforts-satisfaction” relationship is evidenced. Practical implications for retail managers and further research are presented.     

Reciprocal exchange in rural communities: Consumers' inducements to inshop

Although consumer–retailer exchange behavior has been studied for many years, its treatment has not accounted for factors relating to reciprocal exchange intentions. This article defines reciprocity as the degree to which individuals expect cooperative action, and places reciprocity within the overall framework of consumer–retailer market exchange. In addition, it presents results of an exploratory study of rural consumers' reciprocal intentions to shop with local retailers, indicating that levels of satisfaction with interpersonal reciprocity have greater influence than moral, social, or economic motives. This study also suggests that social desirability, as a bias, is strongly linked to rural consumers' responses. © 1997 John Wiley & Sons, Inc.