Customer Satisfaction

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CONSEQUENCES OF CUSTOMER SATISFACTION AND DISSATISFACTION

The consequences of not satisfying customers can be severe. According toHoyer and MacInnis, dissatisfied consumers can decide to: -• discontinue purchasing the good or service,• complain to the company or to a third-party and perhaps return the item, or • engage in negative word-of-mouth communication.Customer satisfaction is important because, according to La Barbera andMazursky, “satisfaction influences repurchase intentions whereasdissatisfaction has been seen as a primary reason for customer defection or discontinuation of purchase”.

EFFECT OF CUSTOMER SATISFACTION ON CUSTOMER LOYALTY AND RETENTION

However, Bowen and Chen said that having satisfied customers is not enough,there has to be extremely satisfied customers. This is because customer satisfaction must lead to customer loyalty. 26

Bansal and Gupta: “Building customer loyalty is not a choice any longer with businesses: it’s the only way of building sustainable competitive advantage.Building loyalty with key customers has become a core marketing objectiveshared by key players in all industries catering to business customers. Thestrategic imperatives for building a loyal customer base are as:• Focus on key customers• Proactively generate high level of customer satisfaction with everyinteraction• Anticipate customer needs and respond to them before the competition does• Build closer ties with customers• Create a value perception”.Sivadas and Baker-Prewitt said “there’s an increasing recognition that theultimate objective of customer satisfaction measurement should be customer loyalty”.Fornell said “high customer satisfaction will result in increased loyalty for thefirm and that customers will be less prone to overtures from competition”.This view was also shared by Anton who said that “satisfaction is positivelyassociated with repurchase intentions, likelihood of recommending a productor service, loyalty and profitability”. Loyal customers would purchase fromthe firm over an extended time (Evans and Berman,).Guiltinan, Paul and Madden said that satisfied customers are more likely to berepeat (and even become loyal) customers. 27

 
 
Consumer satisfaction in consumer durables -A case study on LG,VIDEOCON & PHILIPS. Sivadas and Baker-Prewitt: “Satisfaction also influences the likelihood of recommending a departmental store as well as repurchase but has no directimpact on loyalty. Thus satisfaction in itself will not translate into loyalty.However, satisfaction wills foster loyalty to the extent that it is a prerequisitefor maintaining a favorable relative attitude and for recommending andrepurchasing from the store. Once customers recommend a department store itfosters both re patronage and loyalty towards that store.Thus the key to generating loyalty is to get customers to recommend a store toothers. Also, customers are likely to recommend a department store when theyare satisfied with that store and when they have a favorable relative attitudetowards that store”.Evans and Berman “Companies with satisfied customers have a goodopportunity to convert them into loyal customers – who purchases from thosefirms over an extended period”.Clarke said, “a business that focuses exclusively on customer satisfaction runsthe risk of becoming an undifferentiated brand whose customers believe onlythat it meets the minimum performance criteria for the category. Long-termcustomer retention uncompetitive markets require the supplier to go beyondmere basic satisfaction and to look for ways of establishing ties of loyalty thatwill help ward off competitor attack”.  

 
Consumer satisfaction in consumer durables -A case study on LG,VIDEOCON & PHILIPS.

satisfaction is a "post experience" evaluation of the satisfaction produced bythe product's quality or value.

Intentions to repurchase (behavioral measures):
Do you intend to repurchase...
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