Disconfirmation of Equity Expectations: Effects on Consumer Satisfaction With Services

Raymond P. Fisk, Oklahoma State University
Clifford E. Young, Oklahoma State University
ABSTRACT - The research reported in this paper seeks to develop a conceptual synthesis between equity and satisfaction that is particularly relevant for consumer services, founded upon theoretical and empirical research in consumer satisfaction/dissatisfaction and equity. Disconfirmation of equity expectations was experimentally manipulated as a means of creating consumer dissatisfaction.
[ to cite ]:
Raymond P. Fisk and Clifford E. Young (1985) ,"Disconfirmation of Equity Expectations: Effects on Consumer Satisfaction With Services", in NA - Advances in Consumer Research Volume 12, eds. Elizabeth C. Hirschman and Moris B. Holbrook, Provo, UT : Association for Consumer Research, Pages: 340-345.

Advances in Consumer Research Volume 12, 1985      Pages 340-345

DISCONFIRMATION OF EQUITY EXPECTATIONS: EFFECTS ON CONSUMER SATISFACTION WITH SERVICES

Raymond P. Fisk, Oklahoma State University

Clifford E. Young, Oklahoma State University

[Funding for this research was provided by the Dean's Excellence Fund, College of Business, Oklahoma State University.]

ABSTRACT -

The research reported in this paper seeks to develop a conceptual synthesis between equity and satisfaction that is particularly relevant for consumer services, founded upon theoretical and empirical research in consumer satisfaction/dissatisfaction and equity. Disconfirmation of equity expectations was experimentally manipulated as a means of creating consumer dissatisfaction.

Expectations for waiting time and price for an airline's services were disconfirmed or confirmed in a 4 X 4 Factorial design. Results supported the hypotheses that inequity results in dissatisfaction and reduced intentions for future use of the service. Hypotheses about the relationship of inequity and expectations about subsequent service, however, were not supported.

INTRODUCTION

Issues of satisfaction and equity permeate the study of interactions between marketers and consumers. Consumer satisfaction is rapidly becoming a substantial subfield of consumer behavior. Several conferences on consumer satisfaction/dissatisfaction and complaining behavior have been held demonstrating the importance of this area of research. The satisfaction evaluation is commonly considered to follow most consumption behaviors and to be a major influence on future consumption behaviors (c.f. Day 1979). The common rationale for studying consumer satisfaction among marketing academicians revolves around the "marketing concept." Satisfaction researchers argue that the goal of the marketing concept is to satisfy consumer needs and that satisfaction research provides the basis for identifying those needs.

Concern about the equity or fairness of consumer exchanges is also common. Indeed, equity issues are sufficiently commonplace that a substantial body of federal, state, and local legislation concerns fair treatment of consumers. The concept of equity has two common meanings. The first is that of legal equity C i.e., fair treatment under the law. The second, and more commonplace, meaning is that of social equity which concerns individual perceptions of fairness irrespective of legal issues. Major theories concerning social equity have been presented by Homans ( 1961) and Adams (1963).

Given the importance of equity and satisfaction in consumer research, a synthesis of these constructs appears warranted. The research reported in this paper attempts to present a synthesis, founded upon theoretical and empirical research in consumer satisfaction/ dissatisfaction and equity, that is particularly relevant for consumer services. An experiment is then set up to test these theoretical ideas within the context of airline services.

BACKGROUND

Satisfaction

Expectations have become the central construct in consumer satisfaction research. Indeed, consumer satisfaction is typically defined as confirmation of expectations about product performance (Oliver 1980a; Swan, Trawick, and Carroll 1982). From the first consumer satisfaction study (Cardozo 1965) to the present, expectations have been studied for their connection to consumer satisfaction.

Initial research in expectations and satisfaction by Cardozo (1965) and Anderson (1973) provided evidence that increasing expectations prior to product use resulted in increased negative perceptions about the product if the performance of the product did not measure up to the expectations. Such an effect has been referred to in the literature as the contrast effect.

Other research by Olshavsky and Miller (1972), and Olson and Dover (1976, 1979) provided evidence that raising the expectations prior to use resulted in increased perceptions about the performance of the product even though the product actually performed poorly. This apparently contradictory effect has been referred to as the dissonance or assimilation effect.

Oliver (1977) proposed that expectation and disconfirmation effects occur independently of one another. His research (Oliver 1977, 1980a) found evidence that expectations were related to disconfirmation as was found in previous studies, but that disconfirmations provided significant additional effects on postexposure affect and intentions.

Direct comparison of the results of these studies is difficult at best. The authors used different products, employed different methodological procedures, and made unique assumptions about the operationalization of the satisfaction construct. The value of these studies is, however, evident in the development of an "expectation-confirmation" paradigm of satisfaction. Although some dissatisfaction has been expressed about this paradigm (LaTour and Peat 1979), it is conceptually well explicated and appears to be sufficiently robust to apply to a broad range of human expectations. In connection with the overall paradigm, Oliver (1980b) proposed a model of satisfaction determinants of the form:

Satisfaction - f(Expectation, Disconfirmation)

He argued that the determinants, expectation and disconfirmation, are uncorrelated, and should be additive.

Miller (1977) proposed that there are several types of consumer expectations: ideal, expected, minimum tolerable, and deserved. Summers and Granbois (1977) developed a conceptual distinction between two major kinds of expectations: predictive or expected frequency of occurrence of shopping problems, and normative or what should occur. Others (Swan and Trawick 1979; Swan, Trawick, and Carroll 1982) developed similar categories of expectations called predictive and desired. From this stream of research, categories of predictive and normative expectations appear to dominate.

Equity

Major theoretical work concerning social equity has been performed by Homans (1961) using a distributive justice approach, and Adams (1963) using an equity theory approach. Of these two theoretical approaches, equity theory appears to have strong potential applications to issues of consumer satisfaction and has been previously used in marketing. In particular, because equity theory was first developed to explain the results of inequitable employerCemployee relations it has always had greater relevance to business activities and greater face validity in a marketing context than many theories borrowed from social psychology literature.

The basic propositions of equity theory (Walster, Walster, & Bersheid 1978, p. 15) are:

1. Individuals in an exchange seek to maximize their outcomes relative to their inputs.

2. Individuals perceive that they can maximize their outcomes by behaving equitably.

The first proposition says, basically, that humans are selfish. The second proposition recognizes that "we soon learn that the most profitable way to be selfish is to be ¦fair.'t (p. 15).

Equity occurs whenever one person who is a party to an exchange perceives that the ratio of his or her outcomes to inputs and the ratio of the other party's outcomes to inputs are equal (Walster, Walster & Bersheid 1978). A variety of elaborate formulas have been developed to represent these ratios; however, the current state of formula development is considered to be badly muddled (Alessio 1980).

Equity theory is dependent on each party's perceptions of the exchange. When a person perceives that he or she is a participant in an inequitable relationship, the person becomes distressed. Equity theory predicts that a person experiencing inequity distress will seek its elimination in various ways. The "harmdoer" or person gaining from the inequity attempts to eliminate distress by restoration of actual equity by such actions as derogation of the victim, minimization of the victim's suffering, and denial responsibility for the inequity. The "victim" or person losing from the inequity attempts to eliminate distress through demands for compensation, retaliation, and justification of the inequity. Thus, both parties in an inequitable exchange experience inequity distress and seek its elimination. Note that equity theory is both an interpersonal theory explaining interactions between individuals, and an intrapersonal theory by explaining internal psychological processes.

Equity theory assumes that individuals have the opportunity to compare their outcome/input ratios to someone else's with whom they are in a relationship. Research on this issue indicates that the range of possible comparisons is quite broad and that the propensity to make comparisons is quite high (Walster, Walster, & Bersheid 1978).

Differentiation of equity theory from cognitive dissonance theory is essential to its applications in this research. Some authors obscure the differences between these two theories (e.g., Huppertz, Arenson, & Evans 1978). Cognitive dissonance developed out of Festinger's work in social comparison processes. Equity theory developed in part from cognitive dissonance, but it was also strongly influenced by Homans' (1961) theory of distributive justice.

In addition to having different backgrounds, Wicklund and Brehm (1976) pointed out two major distinctions between cognitive dissonance and equity theory. First, equity theory does not require free choice. A person can still experience inequity distress in the absence of free choice. By contrast, dissonance is not aroused if the individual can blame someone else for the inconsistent cognitions. Second, equity theory assumes that the cognition of "equity" is resistant to change and the individual is motivated to change some other cognition. By contrast, dissonance theory would assume that the equity cognition was suscePtible to change.

In the first application of equity theory to consumer behavior (Huppertz, Arenson, and Evans 1978), two sources inequity, price and service, were manipulated in a role-playing experiment using student subjects. As predicted, both sources of inequity were perceived as being less fair than when appropriate levels were offered. For most subjects, the preferred mode of inequity reduction was leaving the store. But when shopping frequency was high, complaining about the price or service was more common.

Huppertz (1979) also conducted two quasi-experimental investigations to assess the relationship between satisfaction/dissatisfaction and perceived outcome/input ratios. Results of the first experiment, a field test of shopping-mall patrons, were only partially in accordance with equity theory.

The second study, a laboratory setting with undergraduate students, was modified by using more detailed instructions, giving subjects more time to respond, eliminating potentially ambiguous parts of the questionnaire, and asking the subjects to assess an overall measure of consumer and merchant outcomes and inputs. The results of this experiment confirmed the prediction. In addition, the ratios computed with the subject's overall judgments of outcomes and inputs proved to be a better measure of inequity than did the previous method of summating outcomes and inputs. In sum, the value of having consumers assess inputs and outcomes from exchanges is undetermined.

Synthesis of Consumer Satisfaction and Equity

The research reported in this paper builds upon a synthesis of consumer satisfaction and equity developed earlier (Fisk and Coney 1982). The synthesis requires establishment of the form of consumer expectations appropriate to equity processes, appropriate marketer offerings, relevant equity variables in consumer satisfaction, and an appropriate stage in the consumption/ evaluation process.

Earlier it was noted that several types of consumer expectations had been described with the two most common categories being predictive and normative expectations. It can be argued that equity processes constitute normative expectations about how people should behave. Hence, we say that this research focuses on "equity" expectations.

Liechty and Churchill (1979) examined the applicability of Miller's typology of expectations to goods and services. After discounting ideal and expected expectations as being appropriate for services, they considered the minimum tolerable expectation as probably important to both goods and services in that it may well form the boundary between complaint behavior and nonaction as the result of consumer dissatisfaction. Finally, Liechty and Churchill commented on the fourth type of consumer expectation, the deserved, saying:

This introduces an equity dimension in that it involves the individual's evaluation of the reward and costs associated with the purchase and the justice involved in their weighting. (p. 513).

Liechty and Churchill suggested that this type of expectation is probably more applicable to services due to the personal commitment and participation in the production process f rom the consumer." Thus, using Liechty and Churchill's thinking, we argue that equity considerations can form the basis for developing expectations and that, more importantly, services are an excellent setting for studying equity expectations.

Having selected services as an appropriate market offering, the next task involves selecting appropriate variables that are relevant to the equity theory framework that compares two outcome-input ratios. Jacoby (1976), commenting on the applicability of equity theory to consumer behavior stated, "Cost, effort, and time expended may be conceived of as the common consumer inputs for products received," (1.1053). Of the inputs listed above, the two most easily quantified are time and money. Waiting time (time expended) and price (money) can be described as costs charged to the consumer by the marketer. As a consumer's waiting time increases, the time cost of consumption increases. For the consumer, holding all other outcomes and inputs constant, an increase in price or waiting time will increase the consumer's inputs and cause the perception of inequity.

Decreases in waiting time or price will also cause perceptions of inequity. However, equity theory predicts that inequity distress would be less severe. Moreover, in the consumer marketplace, consumer dissatisfaction arises more commonly from inequity that unfairly raises the consumer's inputs. It is inequitable exchanges such as these that most often cause negative publicity for a firm.

An important question to consider is the stage of consumer decision making that equity expectations and evaluations are most salient to the consumer. Fisk (1981) developed a model of the consumption/evaluation process for services and argued that equity processes are most salient immediately following choice processes but before use processes. This is in contrast to the bulk of consumer satisfaction research which focuses on postuse satisfaction.

In subsequent research, Fisk and Coney (1982) developed an experimental design that tested the effects of inequitable waiting time and price upon consumer satisfaction/dissatisfaction within the context of airline services. Subjects were graduate students in business. Both inequitable waiting time and inequitable price were predicted to sharply increase consumer dissatisfaction with the airline. Waiting time and price were also predicted to reduce expectations of future service quality on the airline flight. Results supported the hypotheses that inequitable waiting time and inequitable price lead to consumer dissatisfaction. However, it was not clear if the price manipulation caused perceptions of price inequity as predicted. "Familiarity with airline services" was significant as a covariate with the dependent measure of service quality expectations.

METHODOLOGY

Experimental Design

This research sought to build upon the understanding of equity processes developed by Fisk and Coney (1982), and included several modifications to the previous methodology. Four levels of manipulation were tested instead of three to allow for wider ranges of inequity. An additional dependent variable, intentions, was also included. And subJects were chosen from business people as well as undergraduate college students.

A laboratory experiment using an after-only, 4 X 4 factorial design was used. Waiting time and price, the two independent variables, were each established at four levels. The basic framework involved creation of equity expectations with these two variables for all subjects followed by disconfirmation of these expectations (at varying levels) for all but one cell of the design.

Role-playing was a necessary technique for this research. The use of role-playing, like all methodologies, has its strengths and weaknesses. Its biggest weakness is that it is considered more artificial than a more naturalistic and deceptive experimental design. However, practical and ethical considerations about deception (Zaltman and Burger 1975) resulted in its choice. In defense of role-playing, Hansen (1972) argues that it may be effective in studying expensive products, in controlling for past events, and in preventing bias caused by deception.

Independent Variables

Waiting Time was operationalized at four levels (no wait, 10 minutes, 30 minutes, and 2 hours). Waiting time was presented to each subJect as the amount of waiting time until boarding the flight beyond what they expected. Price was also operationalized at four levels (same, $10 More, $25 More, and $75 More). For each price level, the subjects were told the price they paid for their airline ticket was higher than a friend's. Thus, the critical dimension of price, in equity theory terms, is the difference between the two ticket prices.

Dependent Variables

Three dependent variables were measured. Consumer satisfaction was operationalized as an evaluation of satisfaction with the subject's choice of airlines-. Expectations were measured as expectations of future service quality on the hypothetical flight. Intentions were measured as intentions to purchase the airline's services again. Both expectations and intentions are believed to result from postchoice satisfaction and to form critical elements of postuse satisfaction.

Hypotheses

Nine hypotheses were developed for this research. A set of three hypotheses focuses on each dependent variable, and each set includes main effects predictions for waiting time and price and an interaction prediction:

Set 1. Inequitable waiting time will significantly influence consumer satisfaction with the choice of a service, the consumer's expectations of service quality, and the consumer's intentions to purchase the service in the future.

Set 2. Inequitable price changes will significantly influence consumer satisfaction with the choice of a service, the consumer's expectations of service quality, and the consumer's intentions to purchase the service in the future.

Set 3. Inequitable waiting time and inequitable price changes will significantly interact in influencing consumer satisfaction with the choice of a service, the consumer's expectations of service quality, and the consumer's intentions to purchase the service in the future.

Subjects

Subjects were recruited from civic groups in a Southwestern state and selected to be demographically representative of the typical airline traveler. Successful use of this role-playing methodology required that all subjects be familiar with the service they were to role-play. Any subject that had never flown was screened out. The net sample size of this group was 1 h s

A second group of subjects was selected as relatively nonrepresentative of the typical airline traveler. Students in introductory marketing classes were recruited. Subjects who had never flown were screened out, hence, all had at least experienced airline travel. The net sample size of this group was 190.

Procedures

Subjects were given test booklets containing a series of role-playing exercises for the postchoice evaluation of airline services. The basic scenario was that the subject had chosen an airline for a flight out of town for a vacation and was waiting to board the flight. Respondents' expectations were reinforced by showing the subjects an advertising mock-up for their fictitious airline. The advertisement stressed the airline's low prices and on-time scheduling.

Within the role-playing, a chance meeting with a friend was employed to introduce the independent variable manipulations. The price inequity manipulation was created by having the friend tell the subject that he or she should have gotten a better price from their airline. This was reinforced by showing the subject an ad in the daily paper that prominently displayed the better price. For those in the price equity condition there was no difference in prices. The inequitable waiting time condition was created by telling the subjects they were having to wait 10 minutes, 30 minutes or 2 hours for their flight. This waiting time was contrasted with no waiting time experienced by their friend. In all 16 conditions the subJect's friend served as a "comparison other" who was treated equitably.

Following these manipulations, the subjects were then told that they had boarded the airplane and that the flight attendant was giving them a questionnaire. The questionnaire assessed their satisfaction with their choice of airlines, measured their expectations of the quality of the service they received and measured their intentions to purchase airline services from this airline in the future. The questionnaire also contained manipulation checks and measures of each subject's past experiences with airlines.

RESULTS

Four variables were measured and examined as potential covariates. Each of these variables represented a different form of "experience" with airlines. Because this research attempted to create and disconfirm "equity" expectations it was imperative that these experience variables be monitored as possible indicators of the interplay of predictive expectations. As Swan, Trawick, and Carroll, (1982) note, predictive expectations result from experience. The variables were: the subject's perceived familiarity with airline services, number of times he or she flew during the past twelve months, number of times that the flights were paid for personally, and the number- of weeks since the subject last flew.

For business subjects, only one covariate was significantly related to any of the dependent variables. Number of weeks since the subjects last flew was related (p<.03) to expectations. There were no significant covariates for the student subjects. All other prospective covariates were eliminated and the data were reanalyzed.

The central findings of this research concern the analysis of hypothesized effects of waiting time and price on the dependent variables of satisfaction, expectations, and intentions. Because of unbalanced cells, all analyses used a general linear models procedure.

Table 1 presents the results of analysis on the dependent variable satisfaction. The main effects hypotheses were supported for the two subject groupings (p<.01). The interaction hypothesis, however, was not supported for either subject group.

TABLE 1

GENERAL LINEAR MODELS PROCEDURE ON DEPENDENT VARIABLE OF SATISFACTION

The results of the analysis of the dependent variable of expectations are shown in Table 2. Neither main effects nor interaction effects were significant for the business subjects, though the weeks since they flew was a significant covariate. For the student subjects waiting time effects were statistically significant (p<.01).

TABLE 2

GENERAL LINEAR MODELS PROCEDURE ON DEPENDENT VARIABLE OF EXPECTATIONS

Analysis of the dependent measure of intentions was more positive. Table 3 shows that the waiting time and price main effects were significant for the business subjects (p<.01). For the student subjects only the waiting time main effect was significant (p<.01). There were no significant interaction effects for either subject groups.

A final analysis of variance concerned a manipulation check on the equity/inequity manipulations. Subjects were asked if they were treated fairly by the airline. Table 4 shows some curious results. For the business subjects neither the main effects nor the interaction were statistically significant. However, for the student subjects both the main effects for waiting time and for price were statistically significant (p<.01). Hence, the equity theory manipulation appears to have failed for the business subjects.

TABLE 3

GENERAL LINEAR MODELS PROCEDURE ON DEPENDENT VARIABLE OF INTENTIONS

TABLE 4

GENERAL LINEAR MODELS PROCEDURE ON MANIPULATION CHECK C HOW TREATED

DISCUSSION

Inequitable waiting time led to consumer dissatisfaction for both the business group and the student group. It also led to reduced intentions to repurchase for both groups. However, waiting time does not significantly affect the expectations of the business group but does alter the expectations of the students. One speculation on this result is appealing. We would expect the business people, having flown more frequently, to have strongly hell expectations based on experience. These "predictive" expectations seem to be independent of the equity effect imposed by the experimental manipulation for the business subjects.

Fisk and Coney's (1982) research found support for the effect of waiting time on expectations. However, their subjects were younger and were not f lying as frequently as the business subJects. Also, the fact the manipulation check on inequity failed for the business subjects may be attributable to the subject's strong "predictive" expectations.

Inequitable pricing clearly led to consumer dissatisfaction for both the business and student group. However, it was not significantly related to expectations for either group and related to intentions only for the business group. Failure of the inequity manipulation check for the business subjects muddles interpretation of these results. However, price appears to be definitely independent of expectations about future service.

The difficulty of successfully operationalizing a "fair price" points out the inherent complexity of the price variable. Price is commonly seen as a surrogate for a variety of product attributes. But the question of [fair price" is difficult. Kamen and Toman (1979) believe that consumers hold preconceived ideas about what constitutes a "fair price." The assumption of this research has been that such preconceived fairness ideas can be analyzed by equity theory.

However, Hunt and Nevin (1981) have recently argued that ". . . the most important factor determining the fair price of a product is the recent historical price of that product." (p. 51). If Hunt and Nevin are correct, the recent volatility in airline industry pricing may be negating the possibility that the consumer would hold clear-cut "fair price" expectations. The fact that the most experienced subjects (i.e. most aware of pricing volatility) were not perceiving pricing unfairness seems supportive of this possibility.

Overall, the results of this research and the earlier study by Fisk and Coney (1982) suggest a pattern of consumer expectations. Those with less experience appear to operate with rather clear-cut equity expectations and those with greater experience appear to operate with "predictive" expectations. Dissatisfaction arises nonetheless. However, the cognitive processes leading to dissatisfaction are quite different.

Of particular managerial importance is the fact that price does affect future purchase intentions even though it appears to be unrelated to service quality expectations. Thus, inequity on just a single dimension of the set of service attributes is sufficient to cause both satisfaction and a change in intentions.

CONCLUSIONS

The results of this study are, in general, similar to the earlier results by Fisk and Coney (1982). In the context of airline services, waiting time and pricing overcharges both caused high levels of consumer dissatisfaction. However, the issue of equity or fairness was only significant for the less experienced student subjects. It appears that disconfirmation of equity expectations results in a change in other expectations for less experienced subjects. More experienced subjects, however, appear to temper equity expectations with predictive expectations.

Caution is urged in accepting the conclusion that equity expectations hold sway only when a consumer is less experienced in the consumption situation. It is quite possible that this result is a function of airline services and might not be true for other services. Many findings in marketing are goods or services specific. Alternatively, it is possible, as suggested earlier, that the recent competitive turmoil in the airline industry has led to substantial cognitive turmoil in the minds of more experienced passengers. History may be confounding the data. The relationship between equity expectations and predictive expectations is worthy of further investigation.

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