How Cognitive Dissonance Impacts Repurchase Intention - Research Paper Example

? Cognitive Dissonance Impacts Repurchase Intention Fatiana Gresham Troy Introduction Cognitive dissonance is an emotional sensation that arises when there is a difference between what a person considers and information that appeals to their consideration turning it to into anxiety (Festinger, 1957). Several facts describe that cognitive dissonance can deliver serious interruption to appropriate decision making, and decreasing the dissonance can considerably develop the decision making skills of people. This is applicable in the consumer buying process which is also known as post purchase behavior. The moments immediately after purchase, trigger a series of thoughts in the minds of customers. The consequence of losing other substitute choices and impact of gaining alternate choices together can produce mental irregularity, thus, compelling the customer to reconsider the insight of the purchase decision (Kassarjian & Cohen, 1965). Statement of the Problem Cognitive dissonance occurs when a purchaser becomes dissonant about his/her purchase decision. The research seeks to investigate the problem of cognitive dissonance to understand what aspects lead to dissatisfaction after a purchase decision. A dissonant consumer can return a product or discontinue use of a particular service. The concept of cognitive dissonance is much important for organizations because it can significantly impact on the customers’ post purchasing behavior (Hamza & Zakkaria, 2012). The major problem studied in this research is to understand the consequence of cognitive dissonance on the repurchase intention of customers. The research findings in this paper will help businesses to understand better how to retain a customer by reducing the dissonance. The purpose of this research is to examine how cognitive dissonance among consumers can lead to a decrease in customer repurchase. Significance of the Problem The significance of this problem is prevalent in customer retention. Drege (1991) depicted that most companies have a customer acquisition strategy, but few companies have a customer retention strategy. Once companies acquire customers they do not develop a plan to keep them for long-run. Many times, it can be observed especially in retail segment that customer returns or exchanges product because of dissatisfaction. Thus, businesses suffer because the relationship they have with the consumer is not managed well. Businesses also face impact heavily from a lost sale, which results in acquiring a returned product that has lost its value. If there is a way to reduce the dissonance that a consumer feels after purchase behavior, it could lead to positive impacts for the consumer and businesses. The problem of dissonance also represents other significant issue concerning consumers that often experience of dissatisfaction, and failure to complaints result in silent departure of customers from using the company’s services. According to Chebat, Davidow, & Codjovi (2005), a silent loss can create negative impacts on companies such as losing a customer, along with their lifetime flow of revenue. The other negative impact silent losses have on companies is the inability to address the problem at hand. Dissatisfied customers who never protest are subject to multiple losses due to similar reasons. Companies cannot fix problems they do not know to exist. When companies fail to adhere to dissonant customers, they run the risk of harmful word-of-mouth reviews. There are only few investigative researches undertaken about the impact of cognitive dissonance and repurchase intention of customers. Therefore, there is a requirement for increased number of experimental research where relationship between these two variables can be analyzed. This research can further be studied by analyzing respondents about the reason for remaining in good relationship with an organization for a longer period of time. Literature Review According to the observation of Leon, cognitive dissonance is related with the relationships about understandings of people. The understanding is based on approaches, emotions, behaviour, and value of people. People can have numerous of cognitions about any subject which can be impudent. The cognitions of people have discordant associations with one another (Ithaca College, n.d.). This cognitive dissonance can impact on the repurchase intention of people. The reason is that, cognitive dissonance can impact on the decision making of people about purchasing any product or service. According to Jarcho, Berkman & Lieberman (2010), the decision making is significant part of people which helps to make selection between several striking alternatives. People amend their purchasing attitudes by raising their preference for selected choices. This rationalization is believed to be driven by the initiative to diminish cognitive dissonance. According to Oshikawa (1969), dissonance in repurchase decision making can appear in three ways which are after making an important and tough decision, after being pressed to purchase something which is opposing to the private approaches, and after being uncovered to discrepant information. According to the study of Sweeney, Hausknecht, & Soutar (2000), cognitive dissonance has three separate scopes which are emotional approaches, knowledge of purchase and anxiety about the transaction. The first scope denotes the emotional outlooks of internal strain and worry experienced by persons after paying for a product or service. The second scope denotes the realization of customers that they might have made incorrect selection. Finally, the third scope denotes the condition when customers consider a particular product due to the persistence of other persons. Post Purchase Dissonance According to Keng and Liao (2009), post purchase dissonance (PPD) negatively influences post purchase satisfaction (PPS) and repurchase intention. Keng and Liao also say that consumers that experience PPD usually engage in an external information search in order to reconcile the relationship between PPD and PPS. Consumers search for outside information about the product or service to make them feel at ease about their purchase behaviour. External information includes aspects such as other customer reviews, information about the competitors’’ products or services, and opinions from friends and companions. According to Fried (2008), before purchasing any product or service, a customer is often offered with numerous alternative selections, but unfortunately, after making purchase decision the customer is frequently confronted with disconfirming information which can lead to dissonance. The satisfaction of customers is a blend of expectation and perceived benefits. Thus, if any purchased product or service fails to provide benefits according to expectations, it can generate dissatisfaction. This dissatisfaction is different from dissonance, but both are denoted as customer’s regret after purchasing a product or service. According to Zeelenberg, higher post purchase dissonance or regret can result in higher avoidance of repurchasing (Fried, 2008). According to Hunt (1970), if post purchase dissonance is reduced, organizations can get repeat purchase (Hunt, 1970). Though several researches can provide a comprehensive explanation of degree and way of attitude alteration about repurchasing decisions, they provide less insight about the intellectual and natural events involved in generating the change in repurchasing activities of customers. Moreover, attitude about repurchase is associated with post purchase dissonance and it can effectively change behaviour of people (Jarcho, Berkman, & Lieberman, 2010). Managerial Implications From the perspective of management, it is significant for organizations to address the problem of dissonance among customers after purchasing a product or service, because, it not only raises customer dissatisfaction but also impacts on customer retention. Due to multidimensional characteristics of cognitive dissonance, management performs several activities in order to decrease the level of dissonance. The attempt to diminish dissonance can be displayed by several forms such as increased customer relationship management and developing customer retention strategies among others (Clark & Das, n.d.). Customer Relationship Management (CRM) Customer relationship management is a way to combat a dissonant consumer. Recently, Faed and Forbes (2011) mentioned that CRM is one of the significant strategies, which makes companies familiar with their customers and their behaviors. They go on to explain that CRM is the comprehensive recognition of customers, what they require, and what they prefer. As customers are hard to retain, keeping them satisfied and increasing the loyalty have become gradually important for business. The major aspect for keeping a customer loyal is maintaining good relationship with company. Since, cognitive dissonance can minimize the customer satisfaction as well as the repurchase intention, therefore providing more attention to the satisfaction of existing customers and fostering greater level of loyalty is paramount for any organization. According to Gronroos (1996), having good customer relation is a significant way to increase the lifetime value of customers. Business organizations implement CRM for producing and raising customer equity. His studies also found that CRM focuses on mutual advantages to both organizations as well as to the customers by generating repurchase intention. Customer Retention Satisfaction of customers is the crucial objective of every business as it is the most noteworthy way to retain existing customers. After selling any product or service, the organization might not get any direct interaction with the customers. In certain cases, the post purchase intention of customers is inclined by the social aspects. There is a prevailing cause to every individual for upholding cognitive constancy which gives rise to illogical and maladaptive conduct (Hamza & Zakkaria, 2012). Through CRM, organizations can gain a feeling about the requirements of customers and it lets companies to manage the relationships more intelligently by reducing any doubt of customers about selecting any product. Customer relationship management leads to an increase in customer retention. Knowing how to effectively communicate and reach to consumers is the best way for companies to retain their customers. Customer retention can positively influence on consumers repurchase plan. While most companies concentrate on lowering operating costs, investment in customer retention can be more effective with bottom line approach (Drege, 1991). It costs more to get a new customer than it does to keep an old customer. It would benefit businesses to reach out to current consumers, find out how they feel, and address any dissatisfaction. Customers, who regularly purchase the products or services of an organization, will also be probable to refer the organization’s name to the friends and relatives. Changing customers from one time purchase to repeat purchase can increase the bottom line of business enormously (Ghavami & Olyaei, 2006). Research Methodology The research concentrates on the impact of cognitive dissonance on the repurchasing decisions of customers. The research will help to understand the various aspects of cognitive dissonances and its relationships with the customers’ purchasing behavior. In this research, a mixed approach will be followed by using both qualitative as well as quantitative measures. The qualitative measures will help to understand the theoretical aspects of purchasing behavior and cognitive dissonance in order to gain a general understanding of the problem. The quantitative research will help to understand the relationship between the two variables named cognitive dissonance and repurchase intention of customers. Research Approach The research will be an investigative research where sample of respondents will be taken randomly in order to examine their purchasing criteria and will be measured in order to determine the cognitive dissonance. The cognitive dissonance will be measured on three aspects which are cognitive aspects, emotional aspects and behavioral aspects of customers after purchasing any product or service (Hausknecht, Sweeney, Soutar, & Johnson, 1998). On the other hand, the repurchase intention will be measured on four aspects which are customer satisfaction, future purchase intention, attitudinal loyalty and switching barrier after purchasing certain products or services. Both the variables will be analyzed by using Pearson correlation analysis (Julander & Soderlund, 2003). Research Setting In this research, both primary as well as secondary data will be used. The method for collecting primary data will be through questionnaire survey and the secondary data will be collected by various internet sources such as academic websites, journals, articles, and books. The research will be carried out in four phases. First, literature review will be conducted. Following the literature review, the primary data will be collected by forming questionnaire. After collecting the primary data, it will be analyzed according to the research problem through appropriate methods. Finally, the findings will be developed by analyzing the data and associating with the research problem. Timeline The following table will describe the proposed timeline for the research study: Activities Timeline Literature Review 15 days Data Collection Questionnaire Design 5 days Collection of Data 2 months Arranging Data 7 days Analysis Developing Research Framework 6 days Analyze the Data 1 month Development of Findings Discuss the Data 10 days Describe the Research Problem 5 days Generate Conclusion 3 days References Clark, P. W., & Das, N. (n.d.). Exploring the use of E-CRM elements and effective website design as tools for reducing consumer post-purchase cognitive dissonance. Journal of Technology Research. Chebat, C., Davidow, M., & Codjovi, I. (2005), Silent voices; why some dissatisfied consumers fail to complain. Journal of Service Research 7(4), pp. 328-342. Drege, S. (1991). Customer retention strategies. Business Mexico 1(10), p. 52. Fried, T. A. (2008). The relationship between psychological types, demographics and post-purchase buyer's remorse. United States: ProQuest. Festinger, L. (1957). A theory of cognitive dissonance. Stanford, CA: Stanford University Press. Faed, A., & Forbes, D. (2011). Impact of customer management system in improving customer retention: Optimization of negative customer feedback. World Academy of Science, Engineering and Technology, 72, p. 173. Gronroos, C. (1996). Relationship Marketing: Strategic and Tactical Implications. Management Decision, 34(3). Ghavami, A., & Olyaei, A. (2006). The impact of CRM on customer retention. Retrieved from http://epubl.ltu.se/1653-0187/2006/02/LTU-PB-EX-0602-SE.pdf Hausknecht, D. R., Sweeney, J. C., Soutar, G. N., & Johnson, L. W. (1998). Toward a scale to measure cognitive dissonance. Journal of Consumer satisfaction, Dissatisfaction, and Complaining Behavior 11, pp. 119-127. Hunt, S. D. (1970). Post-transaction communication and dissonance reduction. Journal of Marketing 34, pp. 46-51. Hamza, V. K., & Zakkaria, K. A. (2012). Determinants of cognitive dissonance and its relative importance to consumer product purchase. International Journal of Multidisciplinary Management Studies 2(1), pp. 157-168. Ithaca College. (n.d.). The theory of cognitive dissonance. Retrieved from http://www.ithaca.edu/faculty/stephens/cdback.html Jarcho, J. M., Berkman, E. T., & Lieberman, M. D. (2010). The neural basis of rationalization: cognitive dissonance reduction during decision-making. Social Cognitive and Affective Neuroscience pp. 1-8. Julander, C. R., & Soderlund, M. (2003). Effects of switching barriers on satisfaction, repurchase intentions and attitudinal loyalty. Retrieved from http://economicswebinstitute.org/essays/switchingbarriers.pdf Keng, C. J., & Liao, T. H. (2009). Consequences of post-purchase dissonance: The mediating role of an external information search. Social Behavior and Personality 37(10). Kassarjian, H. H., & Joel, B. C. (1965). Cognitive dissonance and consumer behaviour. 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