Literature review

1.CONSUMER RESEARCH IN DIFFERENT DISCIPLINES:

A considerable body of literature in a range of different discip lines exists on
consumption,
consumer behaviour, and consumer decision-making process. Research in
economics,
business, marketing, psychology and sociology domains studies consumer
behaviour from
different theoretical premises: “for economists, consumption is used to
produce utility; for
sociologists, it is a means of stratification; for anthropologists – a matter of
ritual and symbol; for psychologists – the means to satisfy or express
physiological and emotional needs; and for
business, it is a way of making money”(Fine 1997).

For more than a decade now, a range of studies that address

environmentally sound consumer
behaviour, e.g. car use, waste sorting, minimisation and recycling practices,
have been
conducted. However, few studies evaluated consumer acceptance of the PSS
concept – a
consumption based on non-ownership of physical products, see, for example,
studies on car
sharing schemes (Schrader 1999; Meijkamp 2000), ski rental and washing
services (Hirschl,
Konrad et al. 2001).

One reason explaining the lack of studies in the area could be that, there are
still not many
PSS schemes in place to serve as test grounds. Another reason could be
uniformity of
research focus. Most of consumer research focused on adopter categories,
habits, attitudes
and intentions, rather than on actually measuring the satisfaction level with
the service. The
reason is probably that PSS ideas have been promoted by researchers from
the environmental
management, marketing, design, and engineering fields, and to a lesser
extent by sociologists, who hold the banner of research in customer
satisfaction.
2. CONSUMER SATISFACTION PROCESS :

The paramount goal of marketing is to understand the consumer and to

influence buying
behaviour. One of the main perspectives of the consume r behaviour
research analyses buying
behaviour from the so-called “information processing perspective" (Holbrook
and Hirschman
1982). According to the model, customer decision-making process comprises
a needsatisfying
behaviour and a wide range of motivating and influencing factors. The
process can
be depicted in the following steps (Engel, Blackwell et al. 1995):

 Need recognition – realisation of the difference between desired

situation and the current situation that serves as a trigger for the
entire consumption process.

 Search for information - search for data relevant for the purchasing
decision, both from
internal sources (one's memory) and/or external sources.

 Pre-purchase alternative evaluation - assessment of available choices

that can fulfil the
realised need by evaluating benefits they may deliver and reduction of
the number of options to the one (or several) preferred.

 Purchase - acquirement of the chosen option of product or service.

 Consumption - utilisation of the procured option.

 Post-purchase alternative re-evaluation - assessment of whether or not

and to what degree the consumption of the alternative produced
satisfaction.

 Divestment - disposal of the unconsumed product or its remnants.

Besides the information processing perspective, marketing analyses
consumer behaviour by employing a psychologically grounded concept
of attitudes (Balderjahn 1988; Ronis, Yates et al. 1989; Luzar and
Cosse 1998). It is consumer attitudes that are usually named as the
major factor in shaping consumer behaviour and a wealth of studies is
available on the topic of how attitudes can predict behaviour.
3. WHY CUSTOMER SATISFACTION IS SO IMPORTANT : It seems self
evident that companies should try to satisfy their customers. Satisfied
customers usually return and buy more, they tell other people about their
experiences, and they may well pay a premium for the privilege of doing
business with a supplier they trust. Statistics are bandied around that
suggest that the cost of keeping a customer is only one tenth of winning a
new one. Therefore, when we win a customer, we should hang on to them.

Why is it that we can think of more examples of companies failing to satisfy

us rather than when we have been satisfied? There could be a number of
reasons for this. When we buy a product or service, we expect it to be right.
We don’t jump up and down with glee saying “isn’t it wonderful, it actually
worked”. That is what we paid our money for. Add to this our world of ever
exacting standards. We now have products available to us that would
astound our great grandparents and yet we quickly become used to them.
The bar is getting higher and higher. At the same time our lives are ever
more complicated with higher stress levels. Delighting customers and
achieving high customer satisfaction scores in this environment is ever more
difficult. And even if your customers are completely satisfied with your
product or service, significant chunks of them could leave you and start
doing business with your competition.

A market trader has a continuous finger on the pulse of customer

satisfaction. Direct contact with customers indicates what he is doing right or
where he is going wrong. Such informal feedback is valuable in any company
but hard to formalise and control in anything much larger than a corner
shop. For this reason surveys are necessary to measure and track customer
satisfaction.

Developing a customer satisfaction programme is not just about carrying out

a survey. Surveys provide the reading that shows where attention is required
but in many respects, this is the easy part. Very often, major long lasting
improvements need a fundamental transformation in the company, probably
involving training of the staff, possibly involving cultural change. The result
should be financially beneficial with less customer churn, higher market
shares, premium prices, stronger brands and reputation, and happier staff.
However, there is a price to pay for these improvements. Costs will be
incurred in the market research survey. Time will be spent working out an
action plan. Training may well be required to improve the customer service.
The implications of customer satisfaction surveys go far beyond the survey
itself and will only be successful if fully supported by the echelons of senior
management.