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IMPACT OF SERVICE RECOVERY AND ATTRIBUTIONS ON BRAND ATTITUDE AND PURCHASE INTENTIONS: PRODUCTS VS. SERVICES Kenneth E. Clow, Pittsburg State University S. Altan Erdem, University of Houston - Clear Lake Christina M. Mall, Pittsburg State University ABSTRACT Product and service failures not only affect customer satisfaction but normally have a negative impact on brand attitude and future purchase intentions of the brand concerned. This study addresses the issues of the impact of service recovery attempts and attribution on brand attitude and brand purchase intentions. Differences were found between product failures and service failures. The implications of the findings are then presented. INTRODUCTION Post-purchase actions of brand switching, negative word-of-mouth, and complaint behavior arise from product or service dissatisfaction. Complaint behavior, in turn, may range from forgetting about the incident to voicing a complaint to a third party to taking legal action (Warren and Gilbert 1993). The post purchase response will depend on who is attributed as being accountable for the dissatisfaction, the magnitude of the dissatisfaction, and whether or not the dissatisfaction could have been prevented (Folkes, Koletsky, and Graham 1987). Past studies analyzing the differences in complaint intentions and behaviors between products and services determined that complaints regarding services were slightly higher than complaints with products, as well as the severity of the service problem (Clow, Hancock, and Crouch 1996; Warren and Gilbert 1993). Consumers were more likely to make a service complaint than a product complaint. Folkes, Koletsky, and Graham (1987) studied the relationships among attributions, affects, and behavioral responses of consumers experiencing a service problem. They found that repurchase intentions were affected by two factors: 1) who was responsible for the service problem and 2) could the service problem have been prevented. If the firm is viewed to be responsible for a service problem, future purchases will be negatively impacted. However, a
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firm that accepts responsibility for a service problem and makes a good effort in satisfying the customer can reduce the negative impact on future behavior (Krishman and Valle 1979). Service recovery deals with how a firm handles the cause of the dissatisfaction and the actions the firm's employees take to satisfy the customer's dissatisfaction (Spreng, Harrell, and Mackoy 1995). Customers who are dissatisfied with a product or service can be recovered. If consumers are satisfied with the service or product recovery effort of the firm, they will be willing to purchase from the firm again (Spreng, Harrell, and Mackoy 1995; Cardozo 1965). The purpose of this study was to investigate major differences between product and services in terms of attributions for dissatisfaction, service recovery, brand attitude, and future purchase intentions after a product or service failure. The results of the study can be used by managers to reduce the negative impact on future purchase behavior in a product or service failure situation. THE STUDY The data were collected through the Arkansas Household Research Panel. Of the 510 questionnaires mailed, 152 were used for the study for a response rate of 30%. The sample consisted of 59.9% females. Approximately 13% were between 18 and 39, 45% between 40 and 59, and 42% over the age of 60. The average income was $42,789. Approximately 28% of the sample had a high school education, 25% some college, 22% a college degree, and 25% a post-graduate degree or some post-graduate work. Respondents were asked to answer a series of questions about an experience in which they were extremely dissatisfied. They could choose either a product or a service. The data were analyzed using LISREL 7 (Joreskog and Sorborn 1983, 1989). The structural model illustrated in Figure 1 (omitted) was tested. RESULTS The results of the structural model analysis for the complete data set are provided in Table 1 (omitted) and illustrated in Figure 2 (omitted). Brand attitude had a positive impact on purchase intentions of a particular brand. The level of attribution had an inverse impact
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on brand attitude. The more a consumer attributed the product or service failure to the firm performing the service, the lower their attitude towards the particular brand concerned. Price and service recovery satisfaction were not a factor in the combined model. Table 2 (omitted) provides the results and Figure 3 (omitted) illustrates the results of a product failure. Both the level of satisfaction with the recovery process and the consumer's attitude towards the brand had a positive impact on brand purchase intentions. Based on MLE coefficients, the impact of brand attitude on brand purchase intentions is almost triple that of service recovery satisfaction. Attribution towards the product manufacturer had an inverse impact on brand attitude. Price had an inverse impact on service recovery satisfaction. The higher the price of the product, the lower the level of consumer satisfaction with the service recovery process. The results of the analysis for services are provided in Table 3 (omitted) and Figure 4 (omitted). Brand purchase intentions were impacted by service recovery satisfaction, brand attitude, and attribution. Brand attitude and service recovery satisfaction had a positive impact on likelihood of purchasing the brand again while attribution towards the service provider had an inverse impact. The strongest relationship among the three was service recovery satisfaction. Brand attitude was affected by both service recovery satisfaction and attribution. Service recovery satisfaction was positively related while attribution had an inverse relationship. Price had a positive impact on brand attitude. DISCUSSION OF RESULTS Significant differences exist in how consumers react to product and service failures. For services, both the level of satisfaction with the service recovery process and the level of attribution have a strong impact on the consumer's attitude towards the brand and future purchase intentions. For products, both service recovery and attributions have a lesser impact. For services, price is an important factor in the consumer's attitude towards the brand while for products price has an impact on the consumer's satisfaction with the service recovery process. For products, the key to getting customers to purchase a particular brand after a bad experience is an adequate service recovery process and the development of a strong, positive brand attitude. If consumers have a positive
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attitude towards a particular brand before the bad experience and the manufacturer makes a fair attempt at satisfying the consumer after the bad experience, consumers appear to be inclined to continue purchasing the same brand. How the firm handles the service recovery does not seem to impact the consumer's attitude towards the brand but only the future purchase intentions. However, the level of attribution does impact the consumer's brand attitude. If they feel strongly that the firm was responsible for the product failure, they will tend to reduce their image of the brand. That is to say, if consumers feel the product was defective and the consumer in no way misused the product, they will tend to reduce their attitude towards the brand, which in turn, will reduce the probability of buying the brand in the future. For services, the reaction to a bad experience is more complex. Because of the lack of tangible cues and search qualities, price becomes more important to consumers in the evaluation of a service. The higher the price, the stronger the attitude a consumer will feel towards a particular brand. That is, if two firms offer the same service, the one with the higher price will be viewed more positively in terms of brand attitude. This stronger brand attitude will in turn impact future purchases. In a service failure situation, both service recovery and level of attribution are key factors in both how the consumer will feel towards the brand and their desire to purchase the brand in the future. If the consumer feels the service firm is to blame for the service problem, their attitude towards the brand will be reduced and their likelihood of purchasing the brand in the future will be lower. The same is true for the level of satisfaction with the service recovery process. If the firm does a poor job handling the dissatisfaction after it occurs, consumer attitude towards the brand will be reduced and they will be less likely to purchase the brand in the future. The good news for services is that a strong service recovery can overcome the negative impact of attribution. If a consumer is satisfied with how the firm handled the service recovery process, it will positively impact brand attitude and purchase intentions. Based on the MLE coefficients, the consumer will still be willing to purchase the brand and the bad experience will have only a small, negative impact on brand attitude.
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CONCLUSIONS Because the cost of gaining new customers is much greater than retaining current customers, dealing with customer dissatisfaction episodes is important. In addition to the financial considerations, the negative word-of-mouth from dissatisfied customers can have a negative impact on other current and potential customers. In recovering customers from a bad experience, both the service recovery process and attribution are important. Firms who do an adequate job of taking care of dissatisfied customers after the dissatisfactory experience will in most cases retain that customer for future purchases. Because of the impact of brand attitude on future purchase intentions, firms must make every effort to support their brand through advertising and high product or service quality. Since a consumer's image of a particular brand will be reduced if he or she feels the service or product was responsible for the bad experience, firms must make every effort to ensure the original experience is a good one. In the long run, even good service recovery techniques will not overcome repeated bad experiences with a product or service. REFERENCES Cardozo, Richard N. (1965), "An Experimental Study of Customer Effort, Expectation, and Satisfaction," Journal of Marketing Research, 11 (August), 224-249. Clow, Kenneth E., Tammy J. Hancock, and Henry L. Crouch (1996), "Complaint Intentions: Products vs Services," Southwest Business Symposium Proceedings, 13 (April), 2-8. Folkes, Valarie S., Susan Koletsky, and John L. Graham (1987), "A Field Study of Causal Inferences and Consumer Research Reaction: The View From the Airport," Journal of Consumer Research, 13 (March), 534-539. Joreskog, K.G. and D. Sorbom D (1983), LISREL VI: An Analysis of Linear Structural Relations by the Method of Maximum Likelihood, Version VI. Chicago, IL: National Education Resources. Joreskog, K.G. and D. Sorbom (1989), LISREL 7: to the Program and Applications. Chicago, IL:
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Krishnan S. and Valerie A. Valle (1979), "Dissatisfaction Attributions and Consumer Complaint Behavior," Advances in Consumer Research, 6, 445-449. Spreng, Richard A., Gilbert D. Harrell, and Robert D. Mackoy (1995), "Service Recovery: Impact on Satisfaction and Intentions," The Journal of Services Marketing, 9 (1), 15-23. Warren, William E. and Faye W. Gilbert (1993), "Complaint Intentions and Behavior for Products Versus Services," The Journal of Marketing Management, 3 (Spring/Summer), 12-22.
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