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Consumer Psychology: Retrospect and Prospect. Hans Baumgartner Penn State University. Overview. Retrospect Influential streams of research in consumer psychology (1956-2007) Types of influential articles Prospect Consumer psychology in the third millennium

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consumer psychology retrospect and prospect

Consumer Psychology: Retrospect and Prospect

Hans Baumgartner

Penn State University

overview
Overview
  • Retrospect
    • Influential streams of research in consumer psychology (1956-2007)
    • Types of influential articles
  • Prospect
    • Consumer psychology in the third millennium
    • Examples of recent research originating in the substantive, conceptual and methodological domains
which research streams and articles have had an impact
Which research streams and articles have had an impact?

Citation analysis (based on SSCI) for all articles published in JCR (1974-2007), JMR (1964-2007), and JM (1956-2007)

For articles published since 1974:

categorization of influential articles
Categorization of influential articles

Articles were classified using the scheme shown on the next slide;

Articles in JCR, JMR, and JM were categorized;

Articles with at least 100 citations are shown (the number of citations follows each article), although articles with a smaller number of citations were also classified;

Articles reporting empirical studies are underlined;

categorization of research streams
Categorization of research streams

Marketing influences

  • Product programs
  • Price programs
  • Marketing communication programs
  • Distribution programs

The purchase

process

Psychological

foundation

Environmental

influences

  • Types of purchase behavior
  • Decision making and choice
  • The consumption experience
  • Post-purchase processes
  • Cognition
  • Affect
  • Motivation &personality
  • Physical environ-mental influences
  • Social environ-mental influences
psychological foundation research cognition
Psychological foundation research: Cognition
  • Consumer knowledge, expertise and familiarity

Alba and Hutchinson (1987) 579

  • Consumer memory

Lynch and Srull (1982) 172

  • Consumer inferences

Meyer (1981) 108 , Huber and McCann (1982) 142 , Folkes (1988) 135 , Kardes (1988) 100

  • Imagery processing

MacInnis and Price (1987) 114

  • Consumer learning

Hoch and Ha (1986) 193 , Johnson and Russo (1984) 190,

Hoch and Deighton (1989) 165

psychological foundation research affect
Psychological foundation research: Affect
  • Mood
    • Gardner (1985) 200
  • Consumption emotions
    • Richins (1997) 103
psychological foundation research motivation personality
Psychological foundation research: Motivation & personality
  • Perceived risk
    • Roselius (1971) 118
  • Involvement
    • Conceptual essays: Bloch and Richins (1983) 129 , Greenwald and Leavitt (1984) 213
    • Scales: Zaichkowsky (1985) 470 , Laurent and Kapferer (1985) 215
    • Effects on attention and comprehension: Celsi and Olson (1988) 277
  • Psychographics and values
    • Psychographics: Wells (1975) 123
    • Materialism: Belk (1985) 189 , Richins and Dawson (1992) 219
slide9

Psychological foundation research: Motivation & personality (cont’d)

  • Purchasing motives
    • Shopping motives: Tauber (1972) 108
    • Means-end chains: Gutman (1982) 195
  • Consumer personality
    • Review of theories: Kassarjian (1971) 128
    • Innovativeness: Midgley and Dowling (1978) 141 , Hirschman (1980) 117 , Dickerson and Gentry (1983) 117
    • Scales: Raju (1980) 143 , Shimp and Sharma (1987) 152 , Bearden, Netemeyer, and Teel (1989) 146
  • The self
    • Self-concept: Sirgy (1982) 181
    • Products as social stimuli: Solomon (1983) 195
    • Possessions and the extended self: Belk (1988) 495
the purchase process
The purchase process
  • Types of purchase behavior:
    • Hedonic consumption: Holbrook and Hirschman (1982) 414 , Hirschman and Holbrook (1982) 279
    • Utilitarian/hedonic shopping value: Babin, Darden, and Griffin (1994)171
    • Variety seeking: McAlister and Pessemier (1982) 140
    • Impulsive and compulsive buying: Rook (1987) 171 , O’Guinn and Faber (1989) 186
  • Decision making and choice:
    • Consumer search
    • Amount of search: Newman and Staelin (1972) 124 , Punj and Staelin (1983) 127 , Brucks (1985) 251 , Bloch, Sherrell, and Ridgway (1986) 160 , Beatty and Smith (1987) 170
    • Information overload: Jacoby, Speller, and Berning (1974) 140 , Jacoby, Speller, and Kohn (1974) 169 , Malhotra (1982) 111
the purchase process cont d
The purchase process (cont’d)
  • Decision making and choice (cont’d):
    • Preference formation:
      • Multi-attribute model: Wilkie and Pessemier (1973) 320
      • Affective influences: Zajonc and Markus (1982) 196
      • Schemas: Sujan (1985) 253 , Meyers-Levy and Tybout (1989) 159
      • Time-inconsistent preferences and affect vs. cognition in choice:

Hoch and Loewenstein (1991) 134 ,Shiv and Fedorikhin (1999) 125

      • Pioneering advantage: Carpenter and Nakamoto (1989) 193
    • The decision making process:
      • Decision-making strategies and constructive choice processes:

Wright (1975) 157 , Bettman and Kakkar (1977) 179 , Lussier and Olshavsky (1979) 121 , Bettman and Park (1980) 281 , Park and Lessig (1981) 113 , Bettman, Luce, and Payne (1998) 225 , Luce (1998) 106

      • Lack of decision making: Olshavsky and Granbois (1979) 131
      • Cost of thinking: Shugan (1980) 205
      • Noncomparable alternatives:

Johnson (1984) 126 , Bettman and Sujan (1987) 126

the purchase process cont d12
The purchase process (cont’d)
  • Decision making and choice (cont’d):
      • Consideration sets:

Nedungadi (1990) 156 , Hauser and Wernerfelt (1990) 144

    • Consumer choice:
      • Memory-based choice: Lynch, Marmorstein, and Weigold (1988) 120
      • Attraction and compromise effects:

Huber, Payne and Puto (1982) 256 , Huber and Puto (1983) 106 , Simonson (1989) 255 , Simonson and Tversky (1992) 259

      • Regret and choice deferral: Simonson (1992) 126 , Dhar (1997) 102
  • Post-purchase processes
    • Consumer satisfaction
      • Expectations: Cardozo (1965) 104 , Anderson (1973) 149
      • ED models: Oliver (1980) 593 , Churchill and Surprenant (1982) 314
      • Repurchase and switching: LaBarbera and Mazursky (1983) 113
      • Alternative comparison standards:

Cadotte, Woodruff, and Jenkins (1987) 149 , Tse and Wilton (1988) 205

the purchase process cont d13
The purchase process (cont’d)
  • Post-purchase processes (cont’d)
    • Consumer satisfaction (cont’d)
      • Equity theory: Oliver and Swan (1989) 104 , Oliver and Swan (1989) 186
      • Comparison of theories: Oliver and DeSarbo (1988) 191
      • Desires congruency: Spreng, MacKenzie, and Olshavsky (1996) 160
      • Positive/negative performance: Mittal, Ross, and Baldasare (1998) 106
      • Affective influences:

Westbrook (1987) 183 , Westbrook and Oliver (1991) 165 , Oliver (1993) 213 , Mano and Oliver (1993) 163

      • Satisfaction indices: Fornell (1992) 239 , Fornell et al. (1996) 220
    • Satisfaction, loyalty, and repurchase

Oliver (1999) 197 , Garbarino and Johnson (1999) 219 , Mittal and Kamakura (2001) 112

    • Consequences of dissatisfaction

Bearden and Teel (1983) 176 , Richins (1983) 168, Folkes (1984) 151

environmental influences
Environmental influences
  • Situational influences

Belk (1975) 225 , Milliman (1982) 118

  • Adoption of innovation

Gatignon and Robertson (1985) 181 , Steenkamp, terHofstede, and Wedel (1999) 112

  • Interpersonal influences
    • WOM influence: Arndt (1967) 109 , Brown and Reingen (1987) 106, Herr, Kardes, and Kim (1991) 135
    • Reference group influence: Bearden and Etzel (1982) 129
    • Market mavens: Feick and Price (1987) 114
  • Household and group decision making

Davis and Rigaux (1974) 113 , Davis (1976) 133

  • Consumer socialization

Ward (1974) 131

marketing influences product programs
Marketing influences: Product programs
  • Quality and value
    • Expectations and quality: Olshavsky and Miller (1972) 107
    • Quality, price, and value: Zeithaml (1988) 568
    • Extrinsic cues: Rao and Monroe (1988) 137 , Rao and Monroe (1989) 156 , Dodds, Monroe, and Grewal (1991) 229
    • Corporate associations: Brown and Dacin (1997) 119
  • Brands, brand equity, and brand relationships
    • Brand concept management: Park, Jaworski, and MacInnis (1986) 135
    • Brand equity: Keller (1993) 387
    • Brand personality: Aaker (1997) 133
    • Brand relationships: Fournier (1998) 254
  • Brand extension

Aaker and Keller (1990) 232 , Boush and Loken (1991) 125 , Park, Milberg, and Lawson (1991) 122 , Keller and Aaker (1992) 138 , Loken and John (1993) 106 , Broniarczyk and Alba (1994) 122

marketing influences product programs16
Marketing influences: Product programs
  • The service encounter and servicescapes
    • Service encounter: Solomon and Surprenant (1985) 184 , Surprenant and Solomon (1987) 102 , Arnould and Price (1993) 163
    • Servicescapes: Bitner (1990) 368 , Bitner (1992) 262
    • Crowding and delays: Hui and Bateson (1991) 111 , Taylor (1994) 114
  • Service quality, value, satisfaction and loyalty
    • SERVQUAL: Parasuraman, Zeithaml, and Berry (1985) 980 , Brown and Swartz (1989) 129 , Cronin and Taylor (1992) 526 , Teas (1993) 167, Parasuraman, Zeithaml, and Berry (1994) 230 , Cronin and Taylor (1994) 202 , Zeithaml, Berry, and Parasuraman (1996) 381
    • Dynamic models: Bolton and Drew (1991) 235 , Bolton and Drew (1991) 124 , Boulding, Kalra, Staelin, and Zeithaml (1993) 321 , Bolton and Lemon (1999) 101
    • Critical incidents: Bitner, Booms, and Tetreault (1990) 385 , Keaveney (1995) 168 , Meuter, Ostrom, Roundtree, and Bitner (2000) 128
    • Failure, complaints, recovery, trust and loyalty: Tax, Brown, and Chandrashekaran (1998) 123 ,Smith, Bolton, and Wagner (1999) 110 ,Sirdeshmukh, Singh, and Sabol (2002) 101
marketing influences price programs
Marketing influences: Price programs
  • Price knowledge

Dickson and Sawyer (1990) 180

  • Price perception and reference prices
    • Price perception: Monroe (1973) 184
    • Reference prices: Winer (1986) 194 , Urbany, Bearden, and Weilbaker (1988) 122 ,Grewal, Monroe, and Krishnan (1998) 111
  • Unit prices

Russo (1977) 128

  • Price-oriented sales promotions
    • Loyalty and brand switching: Dodson, Tybout, and Sternthal (1978) 111
    • Deal-prone consumers: Blattberg, Buesing, Peacock, and Sen (1978) 103 , Blattberg, Eppen, and Lieberman (1981) 122
    • Promotion signals: Inman, McAlister and Hoyer (1990) 123
marketing influences advertising programs
Marketing influences: Advertising programs
  • Advertising in general

Resnik and Stern (1977) 124 , Pollay (1986) 169 ,Richins (1991) 142

  • Information processing of ads

MacInnis and Jaworski (1989) 161 , MacInnis, Moorman, and Jaworski (1991) 131

  • Information processing of pictures in ads

Edell and Staelin (1983) 155 , Kisielius and Sternthal (1984) 107 , Childers and Houston (1984) 111

  • Affect in advertising

Gorn (1982) 180 , Aaker,Stayman, and Hagerty (1986) 126 , Batra and Ray (1986) 210 , Edell and Burke (1987) 224 , Holbrook and Batra (1987) 197 , Goldberg and Gorn (1987) 106 , Burke and Edell (1989) 126

  • Attitude toward the ad

Mitchell and Olson (1981) 347 , MacKenzie, Lutz, and Belch (1986) 254 , Mitchell (1986) 114 , MacKenzie and Lutz (1989) 213 , Brown and Stayman (1992) 138

marketing influences advertising programs19
Marketing influences: Advertising programs
  • Attitudes and persuasion
    • Hierarchy of effects: Lavidge and Steiner (1961) 213
    • Expectancy-value model: Lutz (1975) 100
    • Cognitive responses: Wright (1973) 181 , Wright (1980) 128
    • ELM: Petty, Cacioppo, and Schumann (1983) 601 , Park and Young (1986) 151
    • Framing: Levin and Gaeth (1988) 155 , Maheswaran and Meyers-Levy (1990) 135
    • Persuasion knowledge model: Friestad and Wright (1994) 208
  • Attitudes and behavior
    • Fishbein model and alternatives: Ryan and Bonfield (1975) 112 , Bagozzi (1982) 116 , Shimp and Kavas (1984) 118 , Sheppard, Hartwick, and Warshaw (1988) 535 , Bagozzi and Warshaw (1990) 123
    • Direct experience: Smith and Swinyard (1983) 123 , Fazio, Powell, and Williams (1989) 135
marketing influences personal selling and distribution programs
Marketing influences: Personal selling and distribution programs
  • Buyer-seller relationships

Schurr and Ozanne (1985) 137 , Crosby and Stephens (1987) 136 , Crosby and Evans (1990) 359

  • Electronic shopping

Alba et al. (1997) 273 , Hoffman and Novak (1996) 409

miscellaneous research in jcr
Miscellaneous research in JCR
  • Cultural/interpretive papers

Sherry (1983) 127, McCracken (1986) 230 , Belk, Wallendorf, and Sherry (1989) 231 , Mick (1986) 152 , Belk, Sherry, and Wallendorf (1988) 134 , Wallendorf and Arnould (1988) 138 , McCracken (1989) 105 , Mick and Buhl (1992) 111 , Celsi, Rose, and Leigh (1993) 130 , Schouten and McAlexander (1995) 122 , Firat and Venkatesh (1995) 120 , Muniz and O’Guinn (2001) 115

  • Methodological papers
      • Conjoint analysis: Green and Srinivasan (1978) 627 , Green (1974) 114
      • SEM: Gerbing and Anderson (1984) 109 , Steenkamp and Baumgartner (1998) 307 , Jarvis, MacKenzie, and Podsakoff (2003) 141
      • Qualitative approaches: Kassarjian (1977) 297 , Thompson, Locander, and Pollio (1989) 170 , Kolbe and Burnett (1991) 122 , Spiggle (1994) 107
      • Other papers: Calder, Phillips, and Tybout (1981) 243 , Blair and Burton (1987) 121 , Peter, Churchill, and Brown (1993) 106 , Peterson (1994) 155
types of influential articles
Types of influential articles
  • Methodological articles:
    • New methodological techniques and procedures

(e.g., Fornell and Larcker 1981; Thompson, Locander, and Pollio 1989; Bitner, Booms, and Tetreault 1990)

    • Guidelines on how to use particular techniques and procedures

(e.g., Green and Srinivasan 1978; Kassarjian 1977; Steenkamp and Baumgartner 1998; Calder, Phillips, and Tybout 1981)

    • Syntheses of research evidence on a particular technique

(e.g., Peterson 1994)

types of influential articles cont d
Types of influential articles (cont’d)
  • Conceptual articles:
    • New perspective/idea essays

(e.g., Lavidge and Steiner 1961; Holbrook and Hirschman 1982; Zajonc and Markus 1982; Belk 1988; Friestad and Wright 1994)

    • Minitheories of particular substantive phenomena

(e.g., Parasuraman, Zeithaml, and Berry 1985; Zeithaml 1988; Keller 1993; Fornell et al. 1996)

    • Analytical frameworks

(e.g., Shugan 1980; Hauser and Wernerfelt 1990)

    • Propositional reviews of a research area

(e.g., Gatignon and Robertson 1985; Alba and Hutchinson 1987; Bettman, Luce, and Payne 1998)

    • Quantitative and qualitative syntheses of research evidence

(e.g., Sheppard, Hartwick, and Warshaw 1988; Gardner 1985; Wilkie and Pessemier 1973)

types of influential articles cont d25
Types of influential articles (cont’d)
  • Empirical articles:
    • Studies that introduce a new concept, effect, or model
      • Mitchell and Olson (1981); Winer (1986); Aaker and Keller (1990); Fournier (1998)
      • Huber, Payne, and Puto (1982); Simonson (1989)
      • Oliver (1980); MacKenzie, Lutz, and Belch (1986)
    • Studies that test, extend, or challenge prior concepts, effects, or models
      • Petty, Cacioppo, and Schumann (1983)
      • Sujan (1985); Simonson and Tversky (1992)
      • Cronin and Taylor (1992)
    • Studies in popular research areas
      • Bettman and Park (1980); Brucks (1985); Edell and Burke (1987); Celsi and Olson (1988)
    • Scale development studies
      • Zaichkowsky (1985); Richins and Dawson (1992)
consumer psychology in the third millennium
Consumer psychology in the third millennium
  • Fragmentation of the field
    • Behavioral, managerial and quantitative
    • Positivistic vs. interpretive
    • BDT vs. information processing/social cognition
  • Many empirical findings – few integrative theories
  • Some personal thoughts on needed research
    • What we don’t need more of
    • What we need more of
what we don t need more of
What we don’t need more of

Phenomenon-, theory-, and method-of-the-month papers

Preoccupation with esoteric phenomena, theories, and methods

Counter-intuitive or theory-inconsistent findings that are not germane to consumer behavior

Studies that are more relevant to a foundational discipline than to consumer behavior and marketing

what we need more of
What we need more of
  • CB-relevant substantive phenomena as the starting point of research
  • Greater concern with ecologically valid manipulations, measures, and research settings
  • Contextualized theories of the middle range that integrate empirical findings
    • ELM
    • Extended ED model of consumer satisfaction
    • GAP model of service quality
the purchase cube
The purchase cube

Based on Baumgartner (2002, forthcoming)

the purchase cube cont d
The purchase cube (cont’d)

Based on Baumgartner (2002, forthcoming)

recent research streams
Recent research streams
  • Substantively-motivated research
    • Price fairness
    • The mere-measurement effect
    • Other examples
  • Conceptually-motivated research
    • Promotion and prevention focus
    • Other examples
  • Methodologically-motivated research
    • Consumer neuroscience
    • Implicit association test
price fairness as a prototype of recent substantively motivated research
Price fairness as a prototype of recent substantively-motivated research
  • Price fairness as a “consumer’s assessment and associated emotions of whether the difference (or lack of difference) between a seller’s price and the price of a comparative other party is reasonable, acceptable, or justifiable” (Xia, Monroe, and Cox 2004; see also Bolton, Warlop, and Alba 2003)
  • Xia et al. (2004) list 21 studies relevant to price fairness (including research outside marketing and non-price research);
  • Consumer perception of price fairness is a topic uniquely suited to consumer research;
  • Rich literature base related to fairness in other areas;
  • Potential for theory building in the pricing area is huge;
  • Implications for pricing management are substantial;
the mere measurement effect as a prototype of recent substantively motivated research
The mere-measurement effect as a prototype of recent substantively-motivated research

Asking questions about future behavior can change the behavior in question;

Morwitz, Johnson, and Schmittlein (1993) showed that asking respondents once whether they planned to buy an automobile (PC) in the next 6 months increased the incidence of purchase by 37 (18) percent;

Similar results for voting, volunteering, recycling, etc.

Theoretical explanations include increased accessibility of attitudes, avoidance of dissonance, etc.

Fitzsimons and Moore (2008) discuss the implications of this research for screening adolescents for risky behaviors such as drug and alcohol use or sexual behaviors;

other substantively motivated research developments
Other substantively-motivated research developments
  • New marketing technologies (internet recommendation systems, on-line communities, design of web pages, virtual product experiences, customization, self-service technologies)
  • Customer relationship management
  • Financial consequences of satisfaction
  • Cross-cultural consumer behavior
  • Really new products
  • Brand communities
  • Identity signaling
  • Sales promotion (loyalty and frequency programs)
  • Product assortments
  • Transformative consumer behavior and consumer welfare
  • Corporate social responsibility and consumer boycotts
regulatory focus theory as a prototype of recent conceptually motivated research
Regulatory focus theory as a prototype of recent conceptually-motivated research
  • Two types of regulatory focus (Higgins 2002):
    • Promotion focus as self-regulation w/r/t the presence or absence of positive outcomes; concern with ideals and accomplishments; preferred means of goal attainment is eagerness; emotional reactions of cheerfulness and dejection;
    • Prevention focus as self-regulation w/r/t the presence or absence of negative outcomes and a concern with oughts and security; preferred means of goal attainment is vigilance; emotional reactions of quiescence and agitation;
other conceptually motivated research developments
Other conceptually-motivated research developments
  • The unconscious consumer and automaticity (Bargh 2002; Dijksterhuis et al. 2005)
  • Self-control and ego-depletion (Baumeister et al. 2008; Vohs and Faber 2007);
  • Construal Level Theory (Trope, Liberman and Wakslak 2007)
  • Terror management (Arndt, Solomon, Kasser, and Sheldon 2004)
  • Metacognitive experiences (Schwarz 2004)
  • Regret theory (Zeelenberg and Pieters 2007)
consumer neuroscience as a prototype of recent methodologically motivated research
Consumer neuroscience as a prototype of recent methodologically-motivated research

In the brand personality literature, humanlike traits are ascribed to brands;

Yoon et al. (2006) investigated, using fMRI, whether trait judgments about people and products (both self-relevant and nonself-relevant) are processed in similar regions of the brain;

the findings indicated that brand personality was processed differently from human personality;

iat as a prototype of recent methodologically motivated research
IAT as a prototype of recent methodologically-motivated research

IAT as a measure of implicit consumer social cognition (Brunel, Tietje, and Greenwald, 2004);

Useful when people are unable (e.g., because of lack of conscious awareness) or unwilling (e.g., because of social desirability concerns) to reveal their opinions;

Disguised, unstructured procedure for assessing the strength of automatic associations between concepts (e.g., brand attitudes, consumer-brand relationships, attitudes toward ethnic spokespeople in ads);

jcp as the outlet for extraordinary ideas about consumer psychology
JCP as the outlet for “extraordinary ideas” about consumer psychology
  • CW Park suggests the following under-researched areas:
    • The role of learning in consumer behavior
    • Aesthetic experience in consumption
    • Perspectives on consumers’ cognitive flexibility beyond the cognitive miser view
    • Hedonic consumption
    • Consumers’ relationships with brands
    • Culture and consumer psychology
    • Neuroscience approaches
    • Temporal interdependencies between purchase and consumption activities
    • Joint decision making of users, deciders, disposers, and purchasers
additional readings
Additional readings

Haugtvedt, Curtis P., Paul M Herr, and Frank R. Kardes, eds. (2008), Handbook of Consumer Psychology, New York, NY: Lawrence Erlbaum.

Loken Barbara (2006), “Consumer Psychology: Categorization, Inferences, Affect, and Persuasion,” Annual Review of Psychology, 57, 453-485.

Simonson, Itamar, Ziv Carmon, Ravi Dhar, Aimee Drolet, and Stephen M. Nowlis (2001), “Consumer Research: In Search of Identity,” Annual Review of Psychology, 52, 249-275.

the three domains of research brinberg and mcgrath 1985 lutz 1989
The three domains of research(Brinberg and McGrath 1985; Lutz 1989)

Substantive

domain

Conceptual

domain

Methodological

domain

elm as a prototype of conceptually motivated research
ELM as a prototype of conceptually-motivated research

persuasive

communication

nature of cognitive processing ?

yes

motivation

to process ?

yes

ability

to process ?

favorable

thoughts

predominate

neither or

neutral thoughts

predominate

unfavorable

thoughts

predominate

no

no

yes

yes

peripheral

cue present ?

central negative

attitude change

central positive

attitude change

yes

yes

peripheral

attitude shift

Based on Petty and Cacioppo (1986)

elm cont d
ELM (cont’d)
  • Conceptually sophisticated theory of the middle range that integrates many disparate persuasion findings;
  • Useful mental model for thinking about persuasion problems in practice – variables can influence the extent and direction of attitude change by:
    • serving as persuasive arguments (e.g., weak vs. strong arguments);
    • serving as peripheral cues (e.g., source expertise or attractiveness, number of arguments);
    • affecting the extent and direction of message elaboration (e.g., involvement as a determinant of motivation to process and distraction as a determinant of ability to process);
american customer satisfaction index fornell et al 1996
American Customer Satisfaction Index(Fornell et al. 1996)

customer

expectations

customer

complaints

customer

satisfaction

perceived

value

customer

loyalty

perceived

quality

the gaps model
The GAPS model

C

O

N

S

U

M

E

R

WOM

Personal Needs

Past Experience

Expected Service

GAP 5

Perceived Service

M

A

R

K

E

T

E

R

External

Communication

to Consumers

GAP 1

Service Delivery

GAP 4

GAP 3

Translation of Mgmt.

Perceptions into SQ specs

GAP 2

Management Perceptions

of Consumer Expectations

price fairness as a prototype of recent substantively motivated research47
Price fairness as a prototype of recent substantively-motivated research
  • Bolton, Warlop, and Alba (2003) show that
    • Consumers underestimate the effects of inflation and attribute rising prices to vendor price gouging;
    • Consumers attribute price differences across competitors more to profit than cost; even when profits are equal, cost differences matter (e.g., quality differences are considered fair, use of a margin strategy as unfair);
    • Consumers have poor mental models of a firm’s cost structure; less salient costs (with the exception of COGS) are often ignored and perceptions of profit margins are too high; certain costs (e.g., promotional costs) are deemed unfair;