Special Session Summary Perceived Quality and Value, Satisfaction and Loyalty: New Insights Into Processes Underlying Some Familiar Constructs

Citation:

Amna Kirmani and Hans Baumgartner (1999) ,"Special Session Summary Perceived Quality and Value, Satisfaction and Loyalty: New Insights Into Processes Underlying Some Familiar Constructs", in NA - Advances in Consumer Research Volume 26, eds. Eric J. Arnould and Linda M. Scott, Provo, UT : Association for Consumer Research, Pages: 598.

Advances in Consumer Research Volume 26, 1999      Page 598

SPECIAL SESSION SUMMARY

PERCEIVED QUALITY AND VALUE, SATISFACTION AND LOYALTY: NEW INSIGHTS INTO PROCESSES UNDERLYING SOME FAMILIAR CONSTRUCTS

Amna Kirmani, Southern Methodist University

Hans Baumgartner, Pennsylvania State University

Recent work on the determinants of company profitability and revenue growth has emphasized the central importance of perceived quality, perceived value, customer satisfaction, and loyalty to the company’s profit chain (Fornell et al. 1996; Woodruff and Gardial 1996; Heskett et al. 1994). All of these constructs constitute important areas of study in consumer research, spanning diverse streams of research, such as brand evaluation, service quality, customer satisfaction and brand loyalty.

Despite extensive research on the meaning of perceived quality, perceived value, satisfaction, and loyalty, the relationships among these constructs remain largely unclear. Although consumer researchers have begun to explore some basic structural models of these relationships (e.g., Fornell et al. 1996; Monroe 1990; Oliver 1997; Zeithaml 1988), most of the studies have been main effects oriented. Less attention has been paid to moderating variables that establish the conditional boundaries of the relationships. Understanding the processes underlying consumer perceptions of quality, value, satisfaction, and loyalty and the conditional boundaries of these relationships would provide a better foundation for model building.

This special session brought together three teams of researchers who offered somewhat new ways of looking at these familiar concepts. The researchers have conducted studies that probe the psychological mechanisms governing these constructs and the relationships among them. By examining moderating variables that affect the relationships, they sought to bring greater complexiy to these models. The researchers addressed such issues as whether consumers evaluate the quality and value of products simultaneously or sequentially, whether quality and value are antecedents or consequences of satisfaction, and how quality, value, and satisfaction contribute to customer loyalty.

In the first presentation, Amna Kirmani and Hans Baumgartner investigated the process underlying the formation of judgments of a target brand’s quality or value. Their fundamental proposition was that value judgments are more context dependent than quality judgments. The reason for this is that consumers rely on internal standards to assess a brand’s quality, whereas they seek information about competitive brands in order to assess a brand’s value. Since internal standards are relatively stable (at least in the short run) and reference brands change from one evaluation context to the other, this results in greater context dependence of value judgments. Thus, in contrast to the traditional view that quality is an antecedent of value, these authors asserted that, under certain conditions, judgments of quality and value may be formed independently.

In the second presentation, Gillian Naylor and Merrie Brucks examined the process underlying the formation of judgments of value and satisfaction in a service context. They proposed that satisfaction and value are distinct constructs, both in terms of inputs and outcomes. Whereas satisfaction is based largely on the benefits experienced during the service experience (e.g., fun exercise classes), value is based primarily on the outcomes of the service experience (i.e., weight loss). Moreover, value may be a consequence, rather than an antecedent, of satisfaction and may be a more important determinant of long-term intentions to repurchase than satisfaction.

In the final presentation, Michael D. Johnson and Seigyoung Auh investigated the relationship between customer satisfaction and loyalty. They argued that satisfaction evaluations focus on a customer’s experience with a particular product or service to date, whereas loyalty focuses on a customer’s expectation or predisposition to repurchase or choose a product or service over potential alternatives. The authors predicted that two factors, the relative importance of price versus quality in evaluations of satisfaction and customers’ ease of judging quality differences, moderate the impact of satisfaction on loyalty. Satisfaction is expected to have a strong effect on loyalty either when quality is a more important determinant of satisfaction than price and quality differences are easy to judge, or price is more important than quality and quality differences are difficult to assess.

In his role as discussant, Kent Monroe integrated the three papers, summarized the existing research in the pricing area, and talked about recent developments in pricing.

REFERENCES

Fornell, Claes, Michael D. Johnson, Eugene W. Anderson, Jaesung Cha and Barbara Everitt Bryant (1996), "The American Customer Satisfaction Index: Nature, Purpose and Findings," Journal of Marketing, 60 (October), 7-18.

Heskett, James L., Thomas O. Jones, Gary W. Loveman, W. Earl Sasser, and Leonard A. Schlesinger (1994), "Putting the Service-Profit Chain to Work," Harvard Business Review, 72 (March-April), 164-174.

Monroe, Kent B. (1990), Pricing: Making Profitable Decisions, 2^nd ed., New York: McGraw-Hill.

Oliver, Richard L. (1997), Satisfaction: A Behavioral Perspective on the Consumer, New York: McGraw-Hill.

Woodruff, Robert B. and Srah F. Gardial (1996), Know Your Customer: New Approaches to Understanding Customer Value and Satisfaction, Cambridge, MA: Blackwell.

Zeithaml, Valarie A. (1988), "Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence," Journal of Marketing, 52 (July), 2-22.

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