Consumer Dissatisfaction and Complaining Behavior As Feedback: a Comparative Analysis of Public and Private Delivery Systems

Kjell Gr°nhaug, University of Pittsburgh, Graduate School of Business
Johan Arndt, The Norwegian School of Economics and Business Administration
ABSTRACT - This paper reports a study on dissatisfaction and complaining behavior for selected product and service categories from the public and private sectors. Reported dissatisfaction and overt complaining were found to be less pronounced for public than for private goods. Interpreted in the perspective of a theory proposed by Hirschman, the results suggest that the delivery system for public goods may be less responsive to user needs.
[ to cite ]:
Kjell Gr°nhaug and Johan Arndt (1980) ,"Consumer Dissatisfaction and Complaining Behavior As Feedback: a Comparative Analysis of Public and Private Delivery Systems", in NA - Advances in Consumer Research Volume 07, eds. Jerry C. Olson, Ann Abor, MI : Association for Consumer Research, Pages: 324-328.

Advances in Consumer Research Volume 7, 1980     Pages 324-328

CONSUMER DISSATISFACTION AND COMPLAINING BEHAVIOR AS FEEDBACK: A COMPARATIVE ANALYSIS OF PUBLIC AND PRIVATE DELIVERY SYSTEMS

Kjell Gr°nhaug, University of Pittsburgh, Graduate School of Business

Johan Arndt, The Norwegian School of Economics and Business Administration

ABSTRACT -

This paper reports a study on dissatisfaction and complaining behavior for selected product and service categories from the public and private sectors. Reported dissatisfaction and overt complaining were found to be less pronounced for public than for private goods. Interpreted in the perspective of a theory proposed by Hirschman, the results suggest that the delivery system for public goods may be less responsive to user needs.

INTRODUCTION

Over the last few years, interest in and research on consumer satisfaction and dissatisfaction (CS/D) have grown rapidly. Symptomatically, a recent review of 73 publications in the field noted that only 12 of them had appeared prior to 1972 (Runt, 1977). Previous literature has to a substantial degree emphasized consumer problems, and several survey studies have been conducted in order to map the relative frequency of various problems (cf. Andreasen and Best 1977; Day and Landon 1976; Zaltman et al 1977).

Dissatisfaction--in most research has been viewed as an intervening variable between the marketing activities and complaining behavior due to negative discrepancy between expectations and perceived reward satisfaction. In other words, dissatisfaction has been regarded as a precondition for complaining behavior.

From a conceptual point of view, dissatisfaction may be defined as: "... cognitive state of being inadequately rewarded in a buying situation for the sacrifice he (i.e., the buyer) has undergone (Howard and Sheth, 1969, p. 145). Several factors may attribute to this negative discrepancy between expectations and perceived satisfaction, such as:

knowledge (with complete knowledge of buying alternatives and what she/he actually has bought, there would probably be no dissatisfaction);

probability of judging the alternatives. (Where the probability of judging the outcome of a purchase, i.e. the need satisfaction capability of a given product or service is less than one, there will be some possibility of the arousal of dissatisfaction);

variability of the outcome or the quality of the alternatives. The higher the variability, the higher the probability of high aspiration levels--and perception of being inadequately rewarded, and thus dissatisfaction;

perceived importance. The higher the perceived importance, the more on stake, and thus, the more serious is perceived the negative gap between expected and realized utility.

This list of factors attributing to dissatisfaction is in no way meant to be exhaustive. Factors such as advertising and other commercial stimuli may result in increased expectations, and thus increased probability of dissatisfaction. Another factor which may effect expectations and thus the propensity to complain is the supply situation. Scarcity in supply will probably lead to less dissatisfaction with a given supplier, although the buyer may be more dissatisfied with the supply situation as such.

Findings from several studies have revealed that only a fraction of the dissatisfied consumers actually take overt action and complain (cf. Andreason and Best 1977, Kendall and Russ 1975, Day and Landon 1976, Gr°nhaug 1977).

In most previous research it is assumed that research or consumer satisfaction/dissatisfaction and complaining behavior ought to serve as useful feedback for business, government and consumer agencies (cf. Andreasen and Best 1977; and Hunt 1977). Findings from several studies reveal, however, that only a small portion of complaints ever reach government or consumer agencies (cf. Warland et al 1975; Diener 1975; Day and Landon 1976; Andreasen and Best 1977; Gr°nhaug 1977).

Previous research does also show that dissatisfaction and propensity to complain vary across products and services (cf. Andreason and Best 1977, Day and Landon 1976, Gr°nhaug 1977, Zaltman et al 1977). The fact that in no way all complaints lead to a positive outcome for the buyer (cf. Gr°nhaug 1977) not even for complaints handled by the consumer agency (for overview cf. Danet 1978), may be interpreted as the consumers are partly holding too high expectations. A very surprising observation is, however, the almost complete lack of focus on public (collective) goods and services in previous research. This neglect may partly be attributed to the fact that most published studies have been conducted in the U.S. by researchers from the marketing discipline, who appear to have been primarily influenced by a marketing management perspective (cf. Arndt 1976). In addition, the U. S. public sector as supplier of products and services is of relatively lesser importance compared to role played by the public sector in most other Western countries. Hence, the purpose of the present study is to compare dissatisfaction and complaining behavior in selected areas within the public and private sectors.

TWO DELIVERY SYSTEMS CONTRASTED

As noted above the proportion of all products and services channeled through the public sector may vary across countries. In most countries (at least in the Western world) this proportion has been steadily increasing. Prom a macro-marketing and substantive viewpoint, the public sector is important because of its high and rising share of the GNP. Second, public goods are also important as they cater to basic needs such as health, education, internal and external safety, transportation, etc. From a theoretical viewpoint, the public sector is interesting because of the differences between public and private goods in terms of the structural characteristics of the typical delivery system. These differences are summarized in Figure 1.

Three characteristics are used to characterize the goods delivered from the two sectors. Most goods from the private sector are divisible products and services, while most of output from the public sector is indivisible, collective goods. Examples are education, defense, health service, and public transportation. Typically, a certain capacity is developed in order to serve the public. The private goods sector is more often than not characterized by competition: the approximate same product or service may usually be delivered by more than one supplier. Public delivery systems, in contrast, normally have a monopoly status.

The decentralized market is usually the control system for private products and services. The counterpart for public goods is usually the bureaucracy. While the notion of the "perfect bureaucracy", analogous to the "perfect, competitive market", has been developed by Weber (Gerth and Mills, 1946), the real life bureaucracy often suffers from flaws relating to unclear rules, lack of expertise, lethargy, and waste.

FIGURE 1

CHARACTERISTICS OF PUBLIC AND PRIVATE DELIVERY SYSTEMS

The structural characteristics of public delivery systems may make for less responsiveness to consumer or user needs because of lack of incentives for a "client orientation", resulting in inaccessibility, inefficiency, and inhumanity (Danet, 1978). While this situation makes for a high potential of dissatisfaction and irritation, it does not necessarily result in more voiced complaints.

EXIT AND VOICE

Complaining is not the only way of handling dissatisfaction. Hirschman's (1970) theory of "Exit, Voice, and Loyalty" provides a framework for analyzing consumer response to decline in performance in private and public organizations. The basis for Hirschman's (1970) conceptual scheme is the fact that under any economic, social, or political system, individuals, business firms and organizations in general are subject to lapses from efficient, rational, law-abiding, or otherwise functional, expected behavior. If the misbehavior is sustained and serious enough, it is important that society marshals from within itself forces persuading (or compelling} the faltering actors to revert to normal behavior. Hence, the smooth functioning of the social system requires effective feedback mechanisms providing timely, relevant, and actionable information about repairable lapses in performance.

Hirschman distinguishes between two main recuperative mechanisms, exit (or desertion) and voice (or articulation). Economic theory has emphasized the exit option, which is manifested when dissatisfied voters switch to another party, unhappy employees leave the organization, and consumers feeling cheated start buying competing brands. The voice mechanism, which so far has received most attention in political science, means that the organization's members or the firm's customers express their dissatisfaction directly to management or to some authority to which management is subordinate (such as the office of the consumer ombudsman), or through general protest addressed to anyone who cares to listen.

Previous literature on consumer satisfaction/dissatisfaction and complaining behavior reveals that the exit option (never again to buy the product) appears to be the most frequent reaction of dissatisfied consumers. However, as a feedback mechanism, exit leaves much to be desired. First, as Hirschman (1970) points out, feelings of loyalty to the organization in question may make consumers or users refrain from using this option. The monopoly situation (in the case of health) or compulsory consumption situation (education, defense, etc.) further limit the use of the exit mechanism for public goods. Second, in a competitive market, exiting dissatisfied consumers may be replaced by new buyers, hereby offsetting the initial loss in sales. A third problem is that non-purchase is an equivocal signal. It does not tell what aspect of the product or service the consumer is dissatisfied with. A first thought is that the limited availability of the exit option would make complaints particularly frequent for the public sector given dissatisfaction. Since this recuperative mechanism is superior to exit from a communications viewpoint, this might give public delivery systems a good control system. However, real world conditions appear to be more complex. In Hirschman's scheme, the probability of voice depends on the advantage to be gained from a favorable outcome multiplied by the subjective probability of a successful outcome (Hirschman, 1970, p. 39). For public goods, the subjective probability of success may be an important restrictive factor. If the bureaucracy is viewed as unresponsive, the effort of complaining may not be regarded as worthwhile.

With the previous discussion as a point of departure, the focus of the empirical study to be reported will be directed towards propensity to complain as well as motives for not complaining in the two delivery systems.

METHOD

Primary research was conducted in order to explore the questions raised above. A cross-sectional survey of users/buyers of selected goods from the public and private sector with emphasis on mapping the incidence of dissatisfaction and complaining and the outcome of complaints was conducted.

Products and services

Dissatisfaction and complaining behavior were examined in the context of the following products and services:

Private goods                Public goods

cloths                              telephone

shoes                              social welfare (office)

electrical appliances       school service (public and junior high)

cars                                health service

The reasons behind the choice of products and services were as follows: The included private goods do vary in price per unit and shopping frequency, but have in previous studies been associated with high degree of dissatisfaction and propensity to complain (cf. Andreason and Best 1977; Gr°nhaug 1977). The selected public goods were all believed to be of high perceived importance for the users, and furthermore believed to have relatively high fraction of users within a random sample (as here) of the population. Some of these products have been examined in previous studies (telephone and medical doctors), however, in another culture where these goods are offered by private institutions (cf. Day and Bodur 1977).

Sample

The study was geographically restricted to include a medium sized Norwegian town with surrounding areas. This design was mainly chosen due to economic restrictions, but also in order to capture individual variations in perceived supply situations.

A list of the population by taking the household as the basic unit was constructed by means of census data. This choice was due to the basic role of the household in most societies. The household in Western societies coincides to a substantial degree with the nuclear family. Central addresses (and names) were selected by random. Five households were interviewed around each address in a specific order. By making one call-back 314 usable interviews were completed based on 80 central addresses, i.e., a response rate of 79 per cent. The non-response is due to factors such as: the central address was not found; there were not five households around the selected address; and the selected respondents were either unwilling to participate or not at home.

Data

Data were gathered on purchased (private goods) or used (public goods) during the last 12 months. Questionnaire items addressed the following aspects (among others) for each good-product purchased/used: satisfied/dissatisfied, if dissatisfied whether any complaint actions; and if complained, the outcome of this/these action(s), besides motivation for not complaining.

The data were gathered by means of personal interviews, partly by using open-ended questions. The interviewers were participants in a graduate marketing research class. Adequate instructions and interview-training were given prior to the data gathering.

The housewife was chosen as respondent, due to her traditional position and assumed insight regarding the household activities (Davis 1976). In households without a housewife (22), the self-selected "heed of the household" was chosen as respondent. The interviews averaged 25-30 minutes. All the open-ended questions were coded by two independent coders. Initially the intercoder reliability was high. All deviances were discussed with a third person.

FINDINGS

Table 1 summarizes the main findings regarding dissatisfaction and complaining behavior:

TABLE 1

DISSATISFACTION AND COMPLAINING BEHAVIOR BY PRODUCT AND SERVICE CATEGORY

Inspection of Table 1 reveals several things to be noted:

The numbers in row 1 clearly demonstrates great variations in purchase/use of the various products and services. However, except for cars, these purchase/use-fractions are all over high.

The percentage of buyers/users dissatisfaction varies considerably across the various products and services, ranging from 4% of the social-welfare users to 24% of the buyers of electrical appliances. For the private goods, "electrical appliances" is demonstrating the highest dissatisfaction fraction, whilst the highest dissatisfaction fraction regarding public goods is found for "health service", which may be attributed to factors such as breakage (el. apl.) and embarrassment (health service) by looking at the dissatisfaction numbers, the three lowest dissatisfaction-fractions are found for public goods. In comparing the proportions of dissatisfied consumers to buyers/users for private and public goods, the null-hypotheses, i.e. , no differences in dissatisfaction propensity, was rejected at the .001-level. [Here each purchase/use was considered the unit of analysis, t-test (two-tailed) was applied to test the difference of portions (Blalock 1972). The same approach has been applied when comparing propensity to complain, and outcome of complaints across for private and public goods.]

The propensity to take action among the dissatisfied buyers and users does also vary considerably across the various products and services, ranging from 100% for "cars" to 10% "for health services". Again, all over lower numbers are found for the public compared to the private goods (p<.O01).

The fractions of positive outcome of the complaints, do also vary considerably across products, ranging from 100% for "school" to zero for "telephone". In comparing outcomes/number of complaints for the private and public sector, the fractions were .83 and .27 respectively (p<.001).

Sources of dissatisfaction

For the private goods the expressed dissatisfaction was found to be related to the instrumental, post-purchase performance of the various products (cf. Swan and Combs 1974). The dissatisfaction for the public goods, however did vary considerably, reflecting both dissatisfaction related to the delivery system (technical difficulties, unqualified teachers and health personnel, waiting time, and school policy) prepurchase (waiting time) and postpurchase/use-phase (service).

Motivation not to complain

Great variations in the propensity to complain for private compared to public goods were reported in Table 1. When relating the reasons for not complaining to products and services from these two sectors, the following picture emerges:

TABLE 2

INDICATED REASONS FOR NOT COMPLAINING

The base numbers indicate that more dissatisfied consumers do not express their dissatisfaction with public compared with what is the case for private goods, in spite of the higher fractions of dissatisfied buyers/ users reported in Table 1. When looking at row one in Table 2, it is also evident that the dissatisfied, not complaining consumers, do perceive the probability of getting a positive outcome lower when dissatisfied with public compared to what is the case when dissatisfied with private goods (p<.05).

The differences for row two ("too much effort needed") may be interpreted as the expected outcome of the complaint is not worth the effort, which may partly be attributed to the amount at stake.

CONCLUDING COMMENTS

This study used a restricted sample and was limited to a few public and private goods categories. Obviously, the results should be treated as tentative and suggestive. As far as they go, the findings showed smaller dissatisfaction and complaining tendencies in the public than in the private sector. A naive interpretation of these tendencies is that "all is well in the public goods area". A completely different interpretation is the one suggested by Hirschman. Earlier research has pointed to the "new silent majority", the dissatisfied consumers who refrain from complaining (Resnik, Gnauck, and Aldrich, 1977). The findings reported here suggest that for public goods, this silent majority may be in double jeopardy. First, only one institution is responsible for supplying the various public (collective) goods included in this study. The combined effect of only one supplier and the services as such, contributes to modest variations in the services offered. With little or no variation expectations will approach the perceived utility, and thus less reasons for complaints. Compared to markets with varying degree of performance offered, such stereotype, low variability markets are less apt to produce dissatisfaction, because you "know what you get". The fact that you have to wait for years to get a telephone, and months to get adequate medical treatment in the actual country, supports this explanation. Second, even when dissatisfied, they fail to take action. Cut off from the exit option, the silent majority does not use the voice alternative either. Therefore, there seems to be a lack of any functioning recuperative mechanism in the public sector. This sector then is in a strong need for a control system similar to the market for private goods. An obvious first step is to develop effective channels and routines for complaints handling.

Our findings also bear on the methodological issue of subjective versus objective indicators of consumer welfare. While +lander (1977) has seriously questioned the meaningfulness of CS/D measures, Day (1977) holds, with several reservations, that such data may be adequate. The findings reported in the present study suggest that subjective measures (CS/D and reported complaining measures) at best may be meaningful for cross-temporal and cross-product comparisons within a marketing or delivery system (such as the public or the private systems). Comparisons across systems, however, may lead to incorrect conclusions.

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