Reasoning About Online and Offline Service Experiences: the Role of Domain-Specificity

ABSTRACT - As offline firms go online and online firms go offline, consumers increasingly interact with a single firm in multiple domains. Understanding the extent to which experiences in one domain (online or offline) influence expectations and behavior about the other domain becomes critical. This has implications for marketing theory (the extent to which consumer reasoning is unique to a domain) as well as marketing practice (the extent to which marketing practices in the on- and offline environments should be aligned).

Citation:

Namita Bhatnagar, Nicholas H. Lurie, and Valarie A. Zeithaml (2002) ,"Reasoning About Online and Offline Service Experiences: the Role of Domain-Specificity", in NA - Advances in Consumer Research Volume 29, eds. Susan M. Broniarczyk and Kent Nakamoto, Valdosta, GA : Association for Consumer Research, Pages: 259-260.

Advances in Consumer Research Volume 29, 2002     Pages 259-260

REASONING ABOUT ONLINE AND OFFLINE SERVICE EXPERIENCES: THE ROLE OF DOMAIN-SPECIFICITY

Namita Bhatnagar, University of North Carolina at Chapel Hill

Nicholas H. Lurie, University of North Carolina at Chapel Hill

Valarie A. Zeithaml, University of North Carolina at Chapel Hill

ABSTRACT -

As offline firms go online and online firms go offline, consumers increasingly interact with a single firm in multiple domains. Understanding the extent to which experiences in one domain (online or offline) influence expectations and behavior about the other domain becomes critical. This has implications for marketing theory (the extent to which consumer reasoning is unique to a domain) as well as marketing practice (the extent to which marketing practices in the on- and offline environments should be aligned).

The idea that knowledge in one (source) domain is used in reasoning about another (target) domain is common to research in psychology in categorization (Murphy and Medin 1985), analogies (Gregan-Paxton and John 1997), inferences (Ford and Smith 1987), and metaphors (Lakoff and Johnson 1980). In marketing, work on new products (Urban, Hulland and Weinberg 1990) argues that consumers use their existing product experiences to evaluate new products.

At the same time, research on domain-specificity in reasoning (Hirschfeld and Gelman 1993) suggests that people are often limited in the extent to which they use knowledge from one domain to reason about another domain. In consumer research, there is evidence for domain-specificity in reasoning as well. For example, Lichtenstein, Netemeyer and Burton (1995) find evidence for domain specificity in deal proneness by showing that consumers exhibit different behaviors for different deal types such as coupon proneness and sale proneness. In other words consumers may, for a number of reasons, fail to use their experiences with a firm in one domain to evaluate encounters with the firm in another domain.

This research examines the extent to which consumers generalize on- and offline service experiences to service expectations and behavioral intentions: whether consumers generalize equally within and across domains and to the overall firm, and whether the source domain of experience moderates this generalization. Four kinds of generalizations are considered: 1) Within-domain generalizations (online to online, offline to offline); 2) Cross-domain generalizations (online to offline, offline to online); 3) Firm-wide generalizations (online to overall firm, offline to overallfirm); and 4) Cross-firm generalizations (online to competing firms, offline to competing firms). A mathematical model of experience generalization is developed that proposes domain characteristics that enhance or mitigate the influence of experiences on cross-domain expectations and repurchase intentions.

Five experimental studies (four completed) examine factors that enhance and inhibit the generalization of service experiences within and across domains. Study 1 uses a paper based airline ticket purchasing scenario to explore the relative influence of within and cross-domain service experiences on service expectations (five SERVQUAL dimensions of expected reliability, responsiveness, assurance, empathy and tangibles) and whether these effects depend on the source (on- versus offline) of the experience. Study 1 also examines the effects of positive versus negative service experiences. Results suggest that the source domain moderates the extent to which within- and cross-domain experiences influence service expectations. For offline expectations, within-domain (offline) experiences are more important than cross-domain (online) experiences. For online expectations, however, within-domain (online) experiences and cross-domain (offline) experiences are equally important. In addition, offline experiences have a stronger impact than online experiences on overall firm expectations. Study 2 replicates Study 1 results that offline experiences are more important than online experiences in reasoning across domains and about the firm in general using a video-based CD purchasing scenario.

Given that Studies 1 and 2 find asymmetric effects of the source domain (online versus offline) for cross-domain generalizations, a mathematical model of expectations-transfer is developed. Within this model, two factors are proposed as potential moderators of cross-domain expectation formation and cross-firm repurchase intentions: 1) perceived similarity between domains (the number of common and distinctive attributes); and 2) perceived prominence of the source domain (the focus of the firm’s operations and whether the firm started as an offline or online firm). In particular, consumers are expected to generalize experiences to a greater extent when domains are perceived as more similar to each other and when the experience is perceived as more prominent. At the same time, there may be asymmetries in these similarity and prominence relations (Tversky 1977). In particular, given that consumers have greater experience shopping offline than online, the perceived similarity of the online domain to the offline domain may be greater than the perceived similarity of the offline domain to the online domain. Store based activities may thus be considered more prominent or prototypical (Rosch 1976) and better indicators of Web based operations. Study 3 results support the proposed model of expectations transfer and finds that an increase in perceived domain similarity enhances the cross-domain generalization of online but not offline experiences. Study 4 replicates Study 3 results and also finds that increased domain prominence enhances the impact of online but not offline experiences. These two studies suggest that consumers have strong beliefs about offline experiences that may not be easily manipulated. Study 5 extends these findings to examine the impact of service experiences on cross-domain and cross-firm repurchase intentions. In this study, real companies, instead of hypothetical firms, that are more or less prominent in the two domains (e.g., Amazon and Barnes & Noble) will be used.

Together, the results from this series of studies suggest important differences in the extent to which consumers use on and offline experiences to develop expectations about future encounters with the firm. Results indicate that offline experiences are more important than online experiences in reasoning about the other domain. Further, perceived similarity between domains and perceived salience of the source domain moderate the cross-domain generalization of on- but not offline experiences. This suggests that firms can influence the extent to which consumers use online experiences in forming offline expectations by positioning heir Web site and stores as more or less similar to each other, or one of the domains as more prominent than the other. Similar strategies however do not appear effective in influencing the extent to which consumers use offline experiences in forming online expectations.

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