The impact of external reference price on consumer price expectations

Comparative pricing practices are frequently used where actual product prices are accompanied by higher external reference prices. All types of stores, regular-price department stores as well as discount stores, use comparative price claims to frame price deals as attractive [Marketing Science 4 (1985) 199]. In this paper, a quadratic model is specified for the impact of external reference price (ERP) on consumer price expectations. Based on the research on communication discrepancy and advertising claim discrepancy, which in turn draw on assimilation-contrast, attribution, and prospect theories, we hypothesize a quadratic effect of external reference prices on consumer price expectations. An interactive, computer-controlled experiment using multiple levels of ERP is used to estimate the proposed model. As hypothesized, support for an inverted U-shape relationship is found between consumers’ updated price expectations and the difference between ERP and initial price expectations. That is, as the difference between ERP and subjects’ initial price expectations increases, subjects’ updated price expectations increase to a point and then start to decrease. We find that the fit of the quadratic model specification for the effect of external reference price on price expectations is noticeably superior to that of linear, logarithmic, square root, and S-shaped specifications. Finally, we provide implications of our results for both retail managers and for regulatory authorities alike.     

The consumer experience: The impact of supplier effort and consumer effort on customer satisfaction

Existing research on experiential offers often examines the impact of such offers on consumers’ evaluations (e.g., customer satisfaction). Yet existing research has neglected that experiential offers typically involve effort from both the supplier and the consumer – and neglected that effort can influence evaluations. To address this gap, the present study examines the impact of supplier effort and the consumer's own effort on the consumer's evaluation of experiential offers in terms of customer satisfaction. Two experiments, comprising two different experiential offers, were carried out. In both experiments, supplier effort (low vs. high) and consumer effort (low vs. high) were manipulated. Customer satisfaction was the dependent variable. The results show that high supplier effort boosts customer satisfaction, and that the effects of consumer effort are either absent or indirect with a negative impact. Moreover, the results indicate that a supplier effort-consumer effort gap (i.e., the consumer perceives that the supplier has expended more effort than the consumer) contributes positively to customer satisfaction.     

Exploring the impact of chatbots on consumer sentiment and expectations in retail

Retailers are increasingly using conversational AI (chatbots) for customer service due to the perceived benefits and reduced operational costs of this emerging technology. Yet our understanding of how consumers perceive interactions with chatbots, and how these interactions may influence other consumer service programs, remains limited. This paper investigates the differences in consumers' sentiments towards chatbots across retail sectors, and the influence chatbots have on consumers’ sentiments and expectations towards other service interactions with online human agents. Using a hybrid automated sentiment analysis approach, we identify that (1) overall sentiment towards bots are less negative than sentiment towards online human agents; (2) these sentiments differ across fashion and telecommunications sectors, and finally (3) sentiments towards online human agents in both sectors become more negative after a retailer implements a chatbot.     

The impact of consumer local engagement on local store patronage and customer satisfaction

Abstract

This paper examines the drivers of local grocery retail patronage. Drawing on institutional and social network theory literature, we develop a framework to investigate how consumers’ personal values and engagement with local communities affect their satisfaction and local store patronage. We test our model with survey data on 1504 Finnish consumers. Our results show that the relationship between customer local engagement and local retail patronage is indirect rather than direct, and it is mediated by the vitality of local services, social interaction, and consumer satisfaction.     

The effect of duration metrics on consumer satisfaction

Consumers increasingly feel that time is scarce. To guide time expectations, many marketers have begun communicating duration metrics—information about how long most consumers typically spend on a given activity. Despite the rising prevalence of duration metrics, little is known about how they shape consumption experiences. Five experiments and an analysis of digital engagement data from articles on a popular online publishing platform show that longer (vs. shorter) duration metrics enhance satisfaction and word-of-mouth after an activity is completed. Subjective time perceptions underlie these effects, such that longer duration metrics make consumers feel like they have spent more time on a given activity, and consumers infer their ex-post satisfaction from the amount of time they feel they have invested. Thus, this research provides insight into how duration metrics operate and challenges the intuition that consumers prefer activities that demand less of their time.     

Creating low consumer product expectations

The introduction of generic grocery products brought warnings from trade observers that retailers might suffer negative consequences from consumer dissatisfaction with these products. This study investigated consumer expectations and the degree of satisfaction provided consumers by one category of generic products. The study also examined some relationships between the creation of these satisfaction levels and appropriate retail strategies.The study consisted of 320 homemakers evaluating the effect on posttrial satisfaction of positive and negative disconfirmation of expectations concerning generic peaches. The findings suggest that positive disconfirmation increased satisfaction ratings, whereas negative disconfirmation decreased satisfaction ratings. The relationship between merchandising techniques utilized on generic products and consumers' formation of expectations as observed in the study indicates that, in terms of creating satisfaction, promotion of generic products with essentially negative cues has been appropriate.     

The attribution of service failures: effects on consumer satisfaction

The aim of this paper is to analyse the effects of the attribution of service failures on consumer satisfaction. We analysed direct effects as well as indirect effects through cognitive processes and variables such as quality perceptions and overall quality evaluation. Basing the analysis on the attribution theories and information processing theories, four hypotheses are suggested. These are tested on a sample of 293 service encounters in which some type of failure is present (attributed to the firm or to some environmental factor). The results show that the attribution of the failure to the service firm causes a systematic reduction in all of the quality perceptions (even in service aspects not linked to the failure). But attribution also shows direct effects on satisfaction beyond the effect through perceptions. Attitude-based processes as well as attribute-based processes are affected by attribution.     

An examination of the presence,magnitude and impact of halo on consumer satisfaction measures

This paper replicates and extends a pioneer study on halo effects in consumer satisfaction by Wirtz and Bateson (1995, International Journal of Service Industry Management 6(3), 84–102). An experiment was conducted using a travel agency service. Two attribute performances were manipulated in a 2×2 factorial design, and the performances of five other attributes were held constant, employing a video to standardise performances across all experimental conditions. The results replicated the findings of Wirtz and Bateson’s study. First, it was shown that the two manipulated attributes both caused halo on non-manipulated attributes. Second, it was demonstrated that observed attribute satisfaction could not be interpreted reliably, neither across attributes within a brand nor by attributes across brands. There were two findings extending the replicated study. First, it was found that the manipulation of the more important attribute caused significantly higher halo than the manipulation of the less important attribute. Second, the notion that the magnitude of halo is an additive function of the number of halo causing attributes had to be rejected. Consumers may be susceptible to halo only to a certain level, beyond which they may attempt to contain its effect.     

The impact of interpersonal anxiety on consumer information processing

Effects of interpersonal anxiety on consumer information processing were investigated from a psychoanalytic perspective. Findings indicate that increases in the number and importance of others in subjects' decision environments heighten experienced levels of anxiety. In addition, the relationship of anxiety to information processing was found to be curvilinear (inverted U-shaped) as indicated by the total amount of information and the processing mode selected by subjects during a decision task. Implications for marketers and future research directions are provided.     

The impact of social media conversations on consumer brand choices

This paper estimates the impact of social media conversations on consumer valuation of brand characteristics and demand for carbonated soft drinks (CSDs). We formulate a random coefficient, discrete choice model of consumer demand that includes social media conversations, and estimate it matching Nielsen sales data on carbonated soft drinks to social media conversations on Facebook, Twitter, and YouTube. Empirical results indicate that consumers’ conversations about brands and nutritional aspects of CSDs have a significant impact on their valuation of brand characteristics and ultimately on their choices of CSDs. These findings have important implications not only for firms using social media as a strategic tool for effective brand promotion and product design but also for public health policies aimed at reducing the consumption of sugary beverages and high-calorie foods.     

The impact of membership fees on consumer attitude and choice

This study examined the impact of membership fees on consumer attitude and purchase behavior. Subjects participated in a computerized simulated shopping experiment, and chose between three competing videotape rental stores, receiving feedback about purchase utility on each occasion. Manipulations included the presence or absence of an initial membership-fee requirement at the dominant store and the timing of a lowering of that store's utility to the same level as that offered by a competing establishment. Store loyalty is shown to vary as a function of membership fees and utility changes in a manner consistent with hypotheses generated from prospect, escalation-of-commitment, cognitive-dissonance, and self-perception theories. © 1998 John Wiley & Sons, Inc.     

How product usage influences consumer satisfaction

This paper reports on an empirical investigation of the effect of product usage on consumer satisfaction in the context of consumer durables. It conceptualizes three dimensions of usage-usage frequency, usage function and usage situation-and examines the impact of these usage dimensions on satisfaction. Results of a field survey using five consumer durables suggest that the usage dimensions influence satisfaction through corresponding dimensions of usage disconfirmation, independent of the effect of performance disconfirmation on satisfaction. The specific dimensions of usage disconfirmation which influence satisfaction vary by product.     

The impact of the introduction of the Euro on firms' expectations

Firms' expectations regarding their ability to enter new markets and to develop new products, and concerning the foreign competition they will face in future, are strongly affected by the introduction of the euro. The following article analyzes these expectations using panel data taken from a quarterly business survey in the service sector. Helpful comments from our colleagues Friedrich Heinemann, Georg Licht and Herbert S. Buscher on earlier drafts of this paper are gratefully acknowledged. We are also indebted to Enrico Steeb and Rolf Kempkes for their helping hand in setting up the data set and to Christina Kaiser for research assistence. We also wish to thank Semka Thorvaldsen for proof-reading.     

The effects of consumer empowerment on risk perception and satisfaction with food consumption

This study intends to measure consumer empowerment related to food consumption and determine its effect on food risk perception and satisfaction with food consumption. Data were derived from an analysis of the “2017 Research on Food Consumption Behaviour” by the Korea Rural Economic Institute. Consumer empowerment, risk perception and satisfaction with food consumption were measured using a 5‐point Likert scale. The differences in consumer empowerment according to gender, age, educational level and monthly income were statistically significant. The factors that affected risk perception were information use, healthy eating, consumer rights, consumer responsibility and monthly income. The higher the scores for information use, healthy eating and consumer responsibility, the higher the score for satisfaction with food consumption.     

The impact of promotions on consumer choices and preferences in out-of-stock situations

Out-of-stock is a prevalent problem in retailing, particularly for promoted products. This research analyzes customers' substitution decisions in out-of-stock situations by accounting for the specific impact of promotions. The results of two studies demonstrate that substitution patterns are context-dependent and change contingent on the relative positions of the promoted and the respective unavailable product. Specifically, preferences shift according to a reversed similarity effect, which is, however, reduced for stock-outs of promoted items. If a similar substitute is on sale, the effect is increased. For promoted dissimilar substitutes, the effect is offset by the simultaneous occurrence of an attraction effect. The results lead to important theoretical and managerial implications.     

Product information and consumer choice confidence in multi-item sales promotions

This research augments efforts to produce a richer understanding of the drivers of consumer choice confidence. It examines the interplay between two marketing interventions that consumers encounter in retail marketplaces, diagnostic product information and multi-item sales promotions. Results indicate that the influence of product information varies as a function of sales promotion format. The information effect is weaker when consumers are allowed to select the products that will be included in the promotion. Perception of information adequacy is revealed as a mediator of the information diagnosticity effect. The implications for marketing theory and promotional strategy are discussed.     

The structure of consumer confidence and real value added growth in retailing in the Netherlands

Consumer confidence is a determinant of the willingness to buy and thus of sales in retailing. The main purpose of this study is to investigate whether the structure of consumer confidence in the period 1987-2000 differs from the 1972-87 period. The main finding is that, in the 1972-87 period saving had a precaution motive and in the 1987-2000 period saving had a transaction motive. In the 1972-87 period, the utility and ability of saving were determined by the development of household wealth; and in the 1987-2000 period, the utility and ability of saving are determined by the level of household wealth. The perceived inflation is related more strongly to the perceived development of the general economic situation in the 1972-87 than in the 1987-2000 period. Empirical evidence is found that consumer confidence also influences real sales of retailers.     

Value orientations and consumer expectations of Corporate Social Responsibility

This paper explores how personal and situational factors impact consumer expectations of Corporate Social Responsibility (CSR). Consumer expectations are known to motivate marketers to incorporate social considerations into their marketing practices and to communicate about those actions. A study was conducted in order to examine the effect of values and issue involvement on consumer CSR expectations, categorised as economic, legal, ethical, and philanthropic. The study's findings demonstrated that consumers generally have high expectations of CSR, especially in the legal and ethical‐philanthropic domains. Expectations for the ethical‐philanthropic dimension of CSR are higher amongst consumers holding high self‐transcendent values and practicing high involvement. The main implications of the study are the potential for positioning companies as socially responsible and incorporating CSR in strategic marketing and communications decisions.