Consumer Expectations Before and After Purchase

Consumer Expectations Before and After Purchase Introduction: Background to research: Until recently, consumer behaviourists had many theories of satisfaction. Rather, a post decision phenomenon known as cognitive dissonance (Festinger1957) was thought to provide a sufficient framework for understanding post purchase responses. Researchers later expanded the theories more recent theoretical and empirical works (Andreasen 1977; Day 1977; Oliver 1977) generally agree that satisfaction results from a subjective comparison of the expected and received product attribute levels, as originally proposed by (Engel 1968), but that the exact nature of satisfaction process is unknown. In addition psychological concept remains in dispute. Why the customer would seek out one -and only one-branded object or brand set to fulfil his or her needs? This is the pertinent question because the present era of global competition seemingly would enable the customer to move to better alternatives as soon as they materialised. Product improvements, refinements, and innovations are new product introductions are predicted. (See cooper 1993,p.4).Satisfaction research has been â€Å"king† spawned by the widespread adoption of the marketing concept, efforts to align marketing strategy with the goal of maximizing customer satisfaction have been pursued in earnest by the product and service providers (post purchase research 1993 wylie, p.1).( Richard L Oliver journal of marketing; 1999; 63, p. 33) Context of research: The purpose of Research: 1. The purpose of this study is to balance service quality and product quality into an integrated model. 2. The management of the company can make different strategies to make the customers satisfied to full extent. 3. The outcomes of the research helps the top level managers to make their strategies in production and servicing for their products for the new and existing customers. 4. To explore the effects of the three consumer perceptions (product quality, service quality and price fairness) on satisfaction and loyal behaviour. Automobile industry maintenance service is chosen as an examined object because both â€Å"technicians, skills and parts† quality are essential to consumers. Perceived quality: As stated by Parasuraman, Zeithaml, and Berry (1985), quality has been a complex but vague construct which demands further investigation for the industries to highlight product and service quality as satisfaction management. It should be defined as the consumers judgement about a products overall excellence or superiority. Consumer product perceived quality is positively related to consumer loyalty. Perceived service quality: Parsuraman, Zeithaml, and Berry established the five-gap model in 1985, which established the structure and measurement of the methods to measure service quality and consumer satisfaction were basically the same, with both based on comparisons of expectation and performance. Perceived service quality is positively related to customer satisfaction. (Journal of consumer satisfaction, dissatisfaction and complaining behaviour; 2001; 14, p 125) (Parsuraman Zeithaml, and Berry, vol 52 April 1988, p39) they indicate that consumers quality perceptions are influenced by a series of four distinct gaps occurring in organisations. The gaps on service providers side, which can impede delivery of services that consumers perceive to be of high quality, are: 1. Difference between consumer expectations and management perceptions of consumer expectations. 2. Difference between management perceptions of consumer expectations and service quality specifications. 3. Difference between service quality specifications and the service actually delivered. 4. Difference between service delivery and what is communicated about the service to consumers. The mangers of service providers need to know how to measure the service quality, and whether consumers actually purchase from the firms that have the highest level of perceived service quality or from those with which they are most â€Å"satisfied.† (Cronin, j.joseph, jr July 1992.) Expected outcomes: The aim of the proposed research is to: Develop an attractive environment in the dealers service station. Develop a good media and communication in solving the queries of the customers. The actual response of satisfaction from the customers on the company products and services. LITERATURE REVIEW: Executive summary: All marketers need to be aware of the effect of globalization, technology, and deregulation. Rather than try to satisfy everyone, marketers start with market segmentation and develop a market offering that is positioned in the minds of the target market. To satisfy the target markets needs, wants, and demands, marketers create a Product, one of the 10 types of entities (goods, services, experiences, events, persons, places, properties, organizations, information, and ideas). Marketers must search hard for the core need they are trying to satisfy, remembering that their products will be successful only if they deliver value (the ratio of benefits and costs) to customers. Every marketing exchange requires at least two parties—both with something valued by the other party, both capable of communication and delivery, both free to accept or reject the offer, and both finding it appropriate or desirable to deal with the other. One agreement to exchange constitutes a transaction, part of the larger idea of relationship marketing. Through relationship marketing, organizations aim to build enduring, mutually satisfying bonds with customers and other key parties to earn and Retain their long-term business. Reaching out to a target market entails communication channels, distribution channels, and selling channels. The supply chain, which stretches from raw materials to the final products for final buyers, represents a value delivery system. Marketers can capture more of the supply chain value by acquiring competitors or expanding upstream or downstream. In the marketing environment, marketers face brand, industry, form, and generic competition. The marketing environment can be divided into the task environment (the immediate actors in producing, distributing, and promoting the product offering) and the broad environment (forces in the demographic, economic, natural, technological, political-legal, and social-cultural environment). To succeed, marketers must pay close attention to the trends and developments in these environments and make timely adjustments to their marketing strategies. Within these environments, Marketers apply the marketing mix—the set of marketing tools used to pursue marketing objectives in the target market. The marketing mix consists of the four Ps: product, price, place, and promotion. Companies can adopt one of five orientations toward the marketplace. The production concept assumes that consumers want widely available, affordable products; the product concept assumes that consumer want products with the most quality, performance, or innovative features; the selling concept assumes that customers will not buy enough products without an aggressive selling and promotion effort; the marketing concept assumes the firm must be better than competitors in creating, delivering, and communicating customer value to its chosen target markets; and the societal marketing concept assumes that the firm must satisfy customers more effectively and efficiently than competitors while still preserving the consumers and the societys wellbeing. Keeping this concept in mind, smart companies will add â€Å"higher order† image attributes to supplement both rational and emotional benefits. The combination of technology, globalization, and deregulation is influencing customers, brand manufacturers, and store-based retailers in a variety of ways. Responding to the changes and new demands brought on by these forces has caused many companies to make adjustments. In turn, savvy marketers must also alter their marketing activities, tools, and approaches to keep pace with the changes they will face today and tomorrow. Receiving service: The convenience of receiving service is presumably lowest when a customer has to come to the service organisation and must use specific outlet. Offering service through several outlets increases the convenience of access for customers but many start to raise problems of quality control as convenience of access relates to the consistency of the service product delivered. For some type of services the companies come to customer. This is, of course, essential when the target of the service is some immovable physical item (such as a building that needs repairs or pest control treatment, or a garden that needs land-scaping). But since its usually more expensive to take service personnel and equipment to the customer than vice versa, the trend has been away from this approach to delivering consumer services. The key to generating high customer loyalty is to deliver high customer value. A companys value proposition is much more than its positioning on a single attribute. Most of the successful companies are raising expectations and delivering performances to match. These companies are aiming for TCS Total Customer Satisfaction. Customer satisfaction is both a goal and a marketing tool. Companies that achieve high customer satisfaction ratings make sure that their target market is known. After sales support management system is apart of ERP Enterprise Resource Planning solution dealing with the support module after the sales of product. It creates an advanced environment to the organization, which are in to technical support after sales e.g. Companies offering electronic goods and motor vehicles etc. The functional features include: Customer complaints tracking Service engineers information tracking Job scheduling for the complaints Spares management Online support Reports. Customer complaints tracking: Complaint is the starting point of any technical support system. With out a client request the technical support is not initiated. Complaint tracking is done as follows: Client may come down or make a phone call or complaint online The client is validated. The client may have an annual maintenance contract or may have a product in warranty or of warranty. The intensity of the complaint is to be estimated to allocate resources. Expected service type has to be finalized. It may be online assistance indoor or onsite assistance. Service Engineers Information tracking: Information about the engineers is inevitable in job scheduling. Information about the engineers has to be added, deleted or modified in the database. It may contain the following: The name, id of the engineer; the skill set of the engineer; the status of the engineer. Job scheduling for the complaints: Job scheduling means sequencing the request with respect to its intensity, Assignment of a service engineer and creating a job card. It is done to optimize the technical resources and to render the best service to the customer. Minor problem are processed by technicians and complex requests are handled by the expert team. The job card includes the following: The complaint id, the assigned engineer id, the data and time of service, the spare details, no. of man hours required etc. The spare part name and serial number. The available quantity of each spare part. The prize, warranty and other specifications. The suppliers information. Online support: The service is done online also. The client may visit the website to obtain basic support information about the product and FAQ. He can chat with the service engineer on phone or online. Report: The report reflects the current status of the system. The reports that can be generated are as follows: Customer request report and status of the system. Service engineer report provides the information about the skills and strengths of the support team. Job scheduling report states the allotment of the engineers to jobs. Spares report discloses the availability of all the spares in the system. Receipts and payments report gives information about the cash flow in the System, generation of bills: Customer satisfaction tracking: Customer satisfaction is the key concept to dictate the future of the organization. In order to maximize the customer satisfaction along with quick response and efficient service some other activities are to be performed. They may be as follows: Reception of the customer with hospitality. Entertaining environment to the customer. Providing guidance about the usage and maintenance of the product. Offering gift and discounts. Toyota company profile and Feedback and Control: As it implements its strategy, the firm needs to track the results and monitor new developments in the internal and external environments. Some environments are fairly stable from year to year. Other environments evolve slowly in a fairly predictable way. Still other environments change rapidly in significant and unpredictable ways. Nonetheless, the company can count on one thing: The marketplace will change. And when it does, the company will Need to review and revise its implementation, programs, strategies, or even objectives. A companys strategic fit with the environment will inevitably erode because the market environment changes faster than the companys 7-Ss. Thus a company might remain efficient while it loses effectiveness. Peter Drucker pointed out that it is more important to â€Å"do the right thing† (effectiveness) than â€Å"to do things right† (efficiency). The most successful companies excel at both. Once an organization fails to respond to a changed environment, it has difficulty recapturing its lost position. This happened to the once-unassailable Motorola when it was slow to respond to the new digital technology used by Nokia and others, and kept rolling out analogue phones.17 Similarly, Barnes Noble did not immediately recognize the threat posed by Amazon. COMs Internet-based book retailing model; then, as a latecomer to e-commerce, it had more of a struggle establishing itself. Clearly, the key to organizational health is the firms willingness to examine the changing environment and to adopt appropriate new goals and behaviours. High-performance organizations continuously monitor the environment and use flexible strategic planning to maintain a viable fit with the evolving environment. Toyota Motor Corporation, Japans #1 carmaker, has a driving ambition to become greener. The company makes a hybrid-powered (gas and electric) sedan the Prius that isbeing snapped up in US and European markets. Its gas-powered cars, pickups, minivans, and SUVs include such models as Camry,Corolla, 4Runner,Land Cruiser, Sienna, the luxury Lexus line, the new Scion brand, and a full-sized pickup truck, the V-8 Tundra. Toyota also makes forklifts and manufactured housing, and offers consumer financial services. Once a dark horse in the global automotive game, Toyota has begun to close the gap on General Motors and DaimlerChrysler, and has already passed Ford Motor. While most of its North American and European competitors are contracting their operations due to falling demand and overcapacity, Toyota is growing to meet increased global demand. The company has an expressed plan of gaining a global 10% share of the automotive market by the early 2010s. To do this, Toyota feels it must build the cars where, or very near where, they will be bought. To this end Toyota opened new vehicle plants in the Czech Republic in 2005 and is scheduled to open its 11th US plant in San Antonio, Texas in 2006. The greatest focus of Toyotas overseas strategy is currently in China, a country that is expected to become the second-largest car market (behind the US) by 2010. By that year Toyota wants to have a 10% market share in China. Like its competitors, Toyota is beefing up its Chinese operations by joining forces with local automotive players. With its Chinese partner China FAW Group Corporation, Toyota builds Land Cruisers and Corollas in China. Through another agreement with Guangzhou Automobile Group, Toyota began jointly developing engines in 2005. Also in association with Guangzhou Automobile, in 2006 the first Chinese-built Camry rolled off the assembly line in Nansha near Hong Kong. The Camry is the best-selling car in the US and has been a leading import in China. The Chinese-built Camrys are priced to move in an effort to quickly boost Toyotas market share. Late in 2006 Toyota fired a salvo over the deck of GM when it said it aimed to build 9.8 million vehicles by 2008. GM sold 9 .2 million vehicles in 2005 the second-largest volume the company has ever produced in a single year. The announcement came at a time when GM and its equally bedraggled US counterpart Ford are desperately trimming capacity to stay competitive. Toyota out-built Ford back in 2003 and now has GM in its sights. While growing its worldwide production base; Toyota has committed itself to leading the charge toward the development of more efficient, environmentally friendly vehicles, primarily powered by hybrid gasoline-electric technology. Toyotas global production of hybrids in 2005 totalled 151,000 units, or two-and-one-half times production levels of the previous fiscal year. Toyotas hybrid plans going forward are even more ambitious. The company says it wants to build one million hybrids by the early 2010s. In addition to the Prius, Toyota currently offers hybrid versions of the Highlander SUV and the venerable Camry. Late in 2006 Toyota bought a 5.9% stake in Isuzu Motors. The two companies plan to cooperate on engine technologies with Isuzu concentrating on small diesel engines and diesel emission controls while Toyota will focus on environmental improvements for gasoline engines and alternative fuels. The move marks the second time in as many years that Toyota has taken advantage of a broken GM alliance with a Japanese partner. Toyota bought an 8.7% stake in Fuji Heavy Industries from GM in 2005. History In 1926 Sakichi Toyoda founded Toyoda Automatic Loom Works. In 1930 he sold the rights to the loom he invented and gave the proceeds to his son Kiichiro Toyoda to begin an automotive business. Kiichiro opened an auto shop within the loom works in 1933. When protectionist legislation (1936) improved prospects for Japanese automakers, Kiichiro split off the car department, took it public (1937), and changed its name to Toyota. During WWII the company made military trucks, but financial problems after the war caused Toyota to reorganize in 1950. Its post war commitment to RD paid off with the launch of the four-wheel-drive Land Cruiser (1951); full-sized Crown (1955); and the small Corona (1957). Toyota Motor Sales, U.S.A., debuted the Toyopet Crown in the US in 1957, but it proved underpowered for the US market. Toyota had better luck with the Corona in 1965 and with the Corolla (which became the best-selling car of all time) in 1968. By 1970 Toyota was the worlds fourth-largest carmaker. Toyota expanded rapidly in the US. During the 1970s the oil crisis caused demand for fuel-efficient cars, and Toyota was there to grab market share from US makers. In 1975 Toyota displaced Volkswagen as the USs #1 auto importer. Toyota began auto production in the US in 1984 through NUMMI, its joint venture with GM. The Lexus line was launched in the US in 1989 Because of the European Communitys restrictions on Japanese auto imports until the year 2000, Toyotas European expansion slowed. Toyota responded in 1992 by agreeing to distribute cars in Japan for Volkswagen and also by establishing an engine plant (later moved to full auto production) in the UK. The sport utility vehicle (SUV) mania of the 1990s spurred Toyotas introduction of luxury minivans and light trucks. Hiroshi Okuda, a 40-year veteran with Toyota and the first person from outside the Toyoda family to run the firm, succeeded Tatsuro Toyoda as president in 1995. The next year Toyota consolidated its North American production units into Cincinnati-based Toyota Motor Manufacturing North America. In 1997 Toyota introduced the Prius, a hybrid electric- and gas-powered car. The next year Toyota boosted its stake in affiliate Daihatsu (mini-vehicles) to about 51% and started Toyota Map master (51%owned), to Make map databases for car navigation systems. Okuda became chairman in 1999, replacing Shoichiro Toyota, and Fujio Cho became president. Also that year Toyota agreed to form a joint venture with Isuzu to manufacture buses, and it announced plans to invest $800 million to boost US auto production by 16% (200,000 vehicles) to about 1.45 million. In 2000 Toyota launched the Will VI, a sedan aimed at young people. It announced that it was building an online replacement parts marketplace with i2 Technology and that it had formed a financial services company (Toyota Financial Service) and a brokerage firm (Toyota Financial Services Securities Corp.). Toyota also bought a 5% stake in Yamaha (the worlds #2 motorcycle maker) and raised its stake in truck maker Hino Motors from about 20% to almost 34%. International developments included Toyotas agreement with the Chinese government to produce passenger cars for sale in China. The cars are to be built by Tianjin Toyota Motor Corp., a joint venture between Chinese carmaker Tianjin Automobile Xiali and Toyota. Early in 2001 Toyota opened a new plant in France. Later that year the company formed an agreement with PSA Peugeot Citroà «n to begin joint car production in Europe (production began in 2005). Toyota also increased its stake in Hino Motors to 50% with partners Toyoda Gosei, Ltd. and Horie Metal Co., Ltd., Toyota formed a joint venture in 2002 to manufacture resin fuel tank systems. In 2004 Toyota announced that it would establish 14 Lexus dealerships in China; the dealers were all open by mid-2005. Later in 2004 Toyota forged a joint venture agreement with Guangzhou Automobile Group Co., Ltd. to build engines in China In 2005 Toyota bought just fewer than 9% of General Motors 20% stake in Fuji Heavy Industries the Japanese maker of Subaru passenger vehicles. Satisfaction as defined: The satisfaction was â€Å"the buyers cognitive state of being adequately rewarded for the sacrifice he has undergone† (Howard and Sheth 1969, p.145). Hunt (1997b) summarised the feelings of a number of speakers at the first consumer satisfaction conference among the definitions offered were need fulfilment, pleasure/displeasure, expectation-performance interactions, evaluation of the purchase or Consumption experience, evaluation of the benefits of consumption, comparison of actual with ideal outcomes, and the Attribute â€Å"deficit/ surplus† obtained from the purchase. On the basis of the diverse views, Hunt concluded that satisfaction is an evaluation rendered that the product experience was at least as good as it was supposed to be,† in effect an â€Å"evaluation of an emotion†(pp.459-460). Satisfaction may be best understood as an evaluation of the surprise inherent in a product acquisition and/or consumption experience. In essence, it is the summary psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with the consumers prior feelings about the consumption experience. (Richard L. Oliver.) When you visit your favourite restaurant, you expect to have a nice meal. That positive expectation, in itself, is a form of satisfaction. We call it anticipation-satisfaction. When the host sees you and remembers your name, thats recognition-satisfaction. Of course, once youve had that tasty, filling meal, and you feel a warm glow, that outcome is also a satisfaction. Its called need-satisfaction. What happens when youre so pleased with a restaurant that you go out of your way to rave about it to your friends? Thats referral or recommendation-satisfaction. And when the restaurant manager says, â€Å"Come again,† and you reply, â€Å"You can bet on it!† youve expressed a recommitment, or what we call, pledge-satisfaction. What happens when the owner gives you a free dessert just for being a great patron, and youre surprised and delighted about it? Thats what we refer to as surprise-satisfaction. Seeing and being seen in a trendy eatery confers an additional perk: status -satisfaction. As you can see, dining out can lead to several forms of customer satisfaction, and I havent listed half of them. Whatever our business is, we need to know whether were serving our customers as capably as we can, so which satisfaction definitions and measures should we use? Defining customer satisfaction is a very important undertaking—one that even the most customer-focused companies, fail to do. If we dont define it carefully, how can we monitor and measure it, let alone produce it on a consistent and reliable basis? If you ask most business owners how they define satisfaction, sooner or later theyll mention repeat business. Theyll ask, do customers come back and buy again? This is retention-satisfaction. Retention-satisfaction is especially significant because it can be rather easily monitored, and it can be measured in dollars and cents. But it isnt foolproof. This article entitled, â€Å"Just Because They Buy Again Doesnt Mean Theyre Satisfied.† I pointed out that clients might feel they have no other viable choice than to buy from you. Cable television customers used to fit this profile before they could sign-up for satellite-television. Customer service departments are known to track dissatisfaction more than satisfaction. Theyll carefully note every angry letter that comes in the mail, believing that there are perhaps 50 or 100 people who feel the same way, but who didnt bother to write. Paying attention to letters is fine, but the inferences we make about how many silent customers they represent, is little more than a wild hunch. Moreover, service providers shouldnt infer that the absence of angry letters implies the presence of happy customers. Instead of counting letters, Id rather monitor and interpret customer satisfaction behaviours as they occur. The best time to do this is when service transactions conclude. Why wait days or weeks to receive a letter, which only one-in-ten thousand people might write? When you monitor actual transactions, you can tap into a large, continuous universe of customers that is much more representative of feelings-at-large. For instance, we monitor and measure at least three customer behaviours: (1) Their voice inflections; (2) The language they use to express gratitude; and (3) Their pledges to do additional business after being subtly cued to indicate this intention.(To learn more about this system, please refer to my book, Monitoring, Measuring, Managing Customer Service: Jossey-Bass/JohnWiley:2000). How do you measure customer satisfaction? Is it connected to real customer value? When was the last time you seriously explored alternatives? By taking a fresh look at these questions you can create true breakthroughs. You can systematically deliver todays satisfactions while inventing tomorrow Market Definition: The automotive aftermarket is valued according to the retail selling price (RSP), including taxes, of service parts, wear tear parts, mechanical parts, tires, crash repair and consumables accessories. Service parts include filters, wiper blades, ignition plugs and engine oil components. Wear tear Parts include batteries, emission systems, brake pads discs and ride control. Mechanical parts are defined as those parts which are neither changed as part of a service are considered to be wear tear parts. These include transmission and power train parts. Crash repair includes body parts, lighting, glass, paint and solvents. Consumables include cleaners, waxes, polishes, windscreen washes and antifreeze. Accessories include in-car entertainment, alarms security, alloy wheels, storage, interiors (mats etc.) and exteriors (spoilers etc.). Labour charges and wholesale-related revenues are not included. The data only relates to the market for the repair of light vehicles (cars light commercial vehicles of up to 3.5 tonnes in weight). Any currency conversions used in the creation of this report have been calculated using constant 2004 annual average exchange rates. Market analysis: The European auto aftermarket sector reported disappointing results for 2001-2005.Annual growth remained marginal at the outset of the review period in 2002-2003, before entering a decline that is expected to last until the end of 2010.The European auto aftermarket generated total revenues of $89.7 billion in 2005, representing a compound annual rate of change (CARC) of -0.2% for the five-year period spanning 2001-2005. The slump in the market was primarily driven by decline in the German, UK and French markets. Positive growth was exhibited by the Spanish and Italian markets. Sales of mechanical parts form the leading segment in the market, generating total revenues of $27.9 billion in 2005, equivalent to 31.1% of the overall market value. In comparison, the crash repair sector was worth $19 billion, which represented a 21.1% share of the markets value. Looking forward, the European auto aftermarket is expected to decelerate from its current value growth position. With an anticipate d CARC of -0.5% over the 2005-2010 periods, the market is expected to reach a value of $87.5 billion by the end of 2010. Further decline in the French and German markets will act to undermine total revenue for the region; however, the UK market is expected to recover. Competitive landscape: In 2002, the German-based Volkswagen had the largest market share in Europe, with18.4%of new registrations. However, this was almost half a point lower than in the previous year. The company managed to keep revenues and operating costs stable over the period despite lower sales, due to price increases above inflation as well as cost-cutting measures. PSA Peugeot Citroà «n is close behind Volkswagen, and increased its market share by more than half a point in 2002. Indeed, in 2002 the Peugeot 206 overtook the VW Golf as the best-selling car in Europe. The market is highly competitive at the top end, PSA are only than three points ahead of Ford, a company which could well bounce back if its cost-cutting measures fulfil their initial promise. For all three companies, the necessity is to keep on churning out bright and successful new models, and PSA currently looks like it has the edge in terms of technology and design. Below these three companies, Renault, GM and Fiat have been loosing market share, or in Renaults case hanging on to what they have with only a thread. Fiat has suffered from flooding in one of its main parts factories, which has further set back the already beleaguered Italian car maker, but the company has not yet released details of its long-term recovery plans, if it has any. Despite the openness of European car markets, national loyalty still plays a great influence. In France, PSA and Renault lead, whereas in Germany, Italy and Spain, Volkswagen, Fiat and Seat respectively have strong positions. The smaller count ries in Europe provide an exception to this rule, as Belgium and the Netherlands have no substantial car manufacturers of their own but instead act as distribution hubs for other countries. The UK market is led by the large American companies, which cynics may say illustrates where its loyalties lie. Leadin