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

ABSTRACT - As conventional firms learn to do business online and online firms learn to do business through conventional channels, consumers increasingly interact with the same firm through multiple domains. Understanding the extent to which experiences in a domain influence expectations about another domain therefore becomes critical. This cross-domain influence has implications for marketing theory (e.g., the extent to which consumer reasoning is unique to a domain) as well as marketing practice (e.g., the extent to which marketing practices in the online and offline environments should be aligned).

Citation:

Namita Bhatnagar, Nicholas Lurie, and Valarie Zeithaml (2003) ,"Reasoning About Online and Offline Service Experiences: the Role of Domain-Specificity in the Formation of Service Expectations", in NA - Advances in Consumer Research Volume 30, eds. Punam Anand Keller and Dennis W. Rook, Valdosta, GA : Association for Consumer Research, Pages: 383-384.

Advances in Consumer Research Volume 30, 2003     Pages 383-384

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

Namita Bhatnagar, University of Manitoba

Nicholas Lurie, University of North Carolina

Valarie Zeithaml, University of North Carolina

ABSTRACT -

As conventional firms learn to do business online and online firms learn to do business through conventional channels, consumers increasingly interact with the same firm through multiple domains. Understanding the extent to which experiences in a domain influence expectations about another domain therefore becomes critical. This cross-domain influence has implications for marketing theory (e.g., the extent to which consumer reasoning is unique to a domain) as well as marketing practice (e.g., the extent to which marketing practices in the online and offline environments should be aligned).

One of the most important competitive differentiators in marketing practice today is service excellence. Whether a company markets primarily goods or services, delivering quality service is a critical factor both in attracting and retaining customers. While it has long been known that quality service is critical in traditional channels (Parasuraman, Zeithaml and Berry 1988, 1994; Zeithaml, Berry and Parasuraman 1996), it has recently been shown that service is the key driver of intent to repurchase from Web sites. A compelling question that will face all marketers distributing through both conventional and online channels is how the quality of service experiences with a firm in one domain, such as a store, may be used by consumers in developing expectations about services in another domain, such as the same firm’s Web site.

This paper examines the extent to which consumers generalize service experiences within and across domains. Specifically, it examines whether the source of experience (online or offline) moderates this generalization, and whether perceived similarity between domains and perceived prominence of the source of experience influence these generalizations. Three kinds of generalizations are considered: (1) within-domain generalizations (i.e., online to online, offline to offline); (2) cross-domain generalizations (i.e., online to offline, offline to online); and (3) firm-wide generalizations (i.e., online to overall firm, offline to overall firm). Strategic actions that can be employed by firms in order to retain customers when service failures occur in one domain (e.g., influencing consumers’ perceptions of similarity between the firm’s on- and offline activities and prominence of the source of experience) are further examined. Five studies have been conducted. Together, these studies examine the extent as well as types of online and offline service generalizations.

Service categories studied include travel agencies and music retailers. Results of Studies 1 and 2 found that within-domain (i.e., offline) experiences were more important than cross-domain (i.e., online) experiences in offline expectations formation. However, within-domain (i.e., online) experiences and cross-domain (i.e., offline) experiences were equally important in the formation of online expectations. Offline experiences were also found to be more important in firm-wide expectation formation. In other words, offline experiences appear to have a stronger influence on the manner in which consumers reason about clicks-and-mortar service providers. Consumers may historically be characterized as experts in shopping offline for most product categories. The offline environment may therefore loom larger in consumers’ minds, thereby affording greater weight to be given to offline service experiences. Studies 3 and 4 examine these issues by investigating the effects of perceived similarity between domains (i.e., many common versus many distinctive attributes) and perceived prominence of the domain of experience (i.e., perceptions of where the firm originated and where it allocates more resources). Theories of categorization and classification (Murphy and Medin 1985), similarity (Tversky 1977) and prototypicality (Rosch, Mervis, Johnson and Boyes-Braem 1976) provide the framework. The tendency to place domains in common mental categories is expected to be higher when they are perceived as highly similar to each other. Strong generalizations across domains that are members of common categories might therefore be expected, such that experiences within one are treated as surrogates for experiences in the other. At the same time, asymmetric similarity effects in prototypicality literature (Rosch et al 1976) suggests directionality in cross-domain generalizations. Asymmetries in similarity judgements, categorization and consequent knowledge transfer are proposed in that the similarity of less to more prominent (or prototypical) domains is judged greater than the similarity of more to less prominent (or prototypical) domains. The likelihood of categorizing less prominent domains with more prominent ones should thus be greater, as should the likelihood of using prominent experiences as surrogates for less prominent ones. The generalizations of highly prominent experiences are therefore expected to be stronger. Results find that online experiences influence offline expectations to a greater extent when the domains are seen as highly similar to each other or when the web site is seen as highly prominent (e.g., Amazon.com). The influence of offline experiences on online expectations however is neither enhanced nor mitigated when domains are perceived as similar or prominent. It is conjectured that the results were biased due to subjects’ inability to overcome strong prior beliefs about offline domain prominence, especially given the use of service experiences with hypothetical firms as experimental stimuli. To resolve this issue, real firms (based on pretest results) that are considered prominent online or offline are used in order to reinforce experimental manipulations of domain prominence (where Amazon.com is considered highly prominent online; and Barnes and Noble is considered highly prominent offline) in Study 5. Preliminary results indicate that service quality expectations for less prominent domains are lower, and that highly prominent (online or offline) experiences have a stronger impact on service quality expectations for the other domain. This suggests that firms providing sloppy service within domains they are strongly associated with would create strong perceptions of poor service quality associated with the rest of its activities. Strategies are indicated for service recovery in domains blamed by association (i.e., where negative services occur in other related domains). Specific service recovery strategies include: (a) positioning the web site and store far away from each other (in terms of attribute level functionality); and (b) positioning firms as less prominent in domains where operations are not streamlined and negative services tend to occur.

REFERENCES

Murphy, G. L., and D. L. Medin (1985), "The Role of Theories in Conceptual Coherence," Psychological Review, 92, 289-316.

Parasuraman, A., Zeithaml, Valarie A. and Leonard L. Berry (1988), "SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perceptions of service Quality," Journal of Retailing, 64 (1), 12-37.

Parasuraman, A., Valarie A. Zeithaml, and Leonard L. Berry (1994), "Alternative Scales for Measuring Service Quality: A Comparative Assessment Based on Psychometric and Diagnostic Criteria," Journal of Retailing, 70 (3), 201-230.

Rosch, Eleanor, Carolyn B. Mervis, David M. Johnson, and Penny Boyes-Braem (1976), "Basic Objects in Natural Categories," Cognitive Psychology, 8, 382-439.

Tversky, Amos (1977), "Features of Similarity," Psychological Review, 84 (4), 327-352.

Zeithaml, Valarie A., Leonard L. Berry and A. Parasuraman (1996), "The Behavioral Consequences of Service Quality," Journal of Marketing, 60 (April), 31-46.

----------------------------------------