Factors of Consumer Satisfaction - Literature review Example

Literature Review

Consumers demand for and purchase goods with the aim of meeting their needs. Such needs may be basic or secondary but consumption of the purchased commodity is expected to bring satisfaction. Other factors in the consumers’ environments such as interaction with the seller, or the seller’s agent, also contribute to satisfaction of consumers. Experience during acquisition of a commodity and during consumption, therefore, is important to the level of satisfaction that a customer derives. The adaptation level theory and the social exchange theory that explains consumers’ rationale into developing and sustains relationships with sellers inform the study and are explained below.

The Adaptation Level Theory

One of the theoretical models that can explain the experience in the interaction between buyers and sellers is the adaptation level theory that according to Wertheimer (2012) emerged from Gestalt’s concepts of perception. It explains the relationship between stimuli that a person experiences and the person’s reaction to the stimuli. Based on past stimuli, a person adapts, and this determines the individual’s current stimuli. Eiser (2012) explains that the stimuli relate to a given dimension and a baseline. The author terms such a baseline as Adaptation Level to which stimuli from current experiences are compared. Stimuli whose effects are stronger than effects of the baseline stimuli are considered more intense and likely to influence direction of adaptation unlike weak stimuli, whose effects are considered less effective than effects of the baseline stimuli. The relative association between stimuli, therefore, influences a consumer’s decision and purchase behavior. The stimuli, at a given time, can further be induced, and as Deci (2012) explains, even stimuli of a baseline price can be influenced. The value in a price can be created in consumers’ minds. Consequently, even though commodities may have same features, different values may be induced in consumers’ minds, and the values are likely to influence purchase decisions through interaction of the stimuli in the induced value and experiences of the consumers. In the context of online shopping, quality of information, communication through chats, convenience in ordering and payments, visual appeal from website design, security in making payments (Omar, Bathgate, & Nwankwo, 2011) are some of the features, of a website, which consumers can value. Perceived greater value of these, than values from experience or alternative service providers, according to the adaptation level theory, is expected to induce satisfaction among online shoppers.

Rabinowitz, Karuza, and Zevon (2012) explain that this adaptation may occur from two perspectives. From one perspective, new experiences may form a basis from which an individual forms a baseline. Experience with a seller, such as Amazon, may form a baseline from which other retailers can be judged. A consumer then evaluates derived value from any other retailer and is likely to stick with Amazon if no other retailer offers a better experience. Identification of a possible better experience from a competitor, however, will influence an adaptation of consumer behavior towards the better experience. Competence adaptation is another perspective to the adaptation level theory and involves individuals’ functionalities. Change in functionality would induce need for a change in experience, and a service provider that can meet the needs for the competency level will influence consumers’ behavior towards it. The theory plays an important role in evaluation of customer satisfaction, especially in a dynamic and competitive environment. The existence of better experiences from competitors is a competitive edge to the competitors, while changes in competence of an individual are likely threats to provider of the individual’s existing consumption behavior. The theory, therefore and through consumer experiences, offers a basis for measuring consumer elements of experience, such as satisfaction and factors to it, through evaluation of difference experiences or competencies to which a population of consumers has been exposed and their perception of available products and environment.

The theory implies that customers’ experiences with the Amazon’s website, relative to their possible or expected experiences with websites of alternative online retailers, is likely to determine their satisfaction with characteristics of the company. Positive attitude towards experiences such as convenience and security of Amazon’s website and greater significance of the attitude over attitude towards a competitor is likely to lead to satisfaction from use of Amazon’s website.

Social Exchange Theory

Acquisition of new customers and retention of existing customers further influences the number of customers but retention is a cheaper option (Folsom & Boulware, 2014). This introduces the concept of customer loyalty that the authors define as the extent to which an entity can beep its customers. With existence in a competitive environment, competitors may try to acquire clients from other players and such factors as price, service delivery, and developed relationship between an entity and its clients play an important role. The social exchange theory is one of the frameworks that explain the concept of customer loyalty through developed relationships. It offers principles into the relationship and is based on some assumptions. One of the assumptions of the theory is that rewards explain behavior in social constructs. The rewards achieve these through meeting needs of the involved parties (Ridley & Avery, 2013) and therefore, is a reflection of Maslow’s theory of needs that argues for existence of needs as a motivator of people’s behavior (Chon, Pizam, & Mansfeld, 2012). The desire to meet needs influence behavior as people engage in behavior that can help them meet their needs. This further means existence of avenues for meeting the needs that an individual then pursues. Satisfaction of these needs ends motivation into meeting the needs but opens ways for other needs and environments in which consumers seeks satisfaction and compare available options illustrates need for satisfaction of needs. Rewards in the social contexts can be goods or services. In addition, they can be intangibles such as customer service and customer relations. These can further form the basis of experience from which customers can evaluate competitors in determining optimal satisfaction and appropriate direction of behavior (Carter, 2016). The features of a website that online buyers value such as quality of information, ability to communicate on a site, security, safety, and ease of making transactions (Omar, Bathgate, & Nwankwo, 2011) are utilities to buyers and meet the definition of reward.

Another assumption of the social exchange theory that is also consistent with the concept of adaptation level theory (Carter, 2016) is a level of effort that is expected of people for optimizing benefits from experiences. Individuals are assumed to behave in such a way that they maximize positive rewards but minimize negative rewards (Ridley & Avery, 2013). Perceived rewards from such features of a website as its design, convenience, security, communication, and information (Omar, Bathgate, & Nwankwo, 2011) are therefore likely to influence behavior such as commitment to a website and its services. Existence of a social contract is another assumption of the social exchange theory. The contract involves two parties or groups of parties in which each party has control over needs of the other party and obtains a reward from the other (Ridley & Avery, 2013). An online retailer, such as Amazon, which requires buyers’ commitment and loyalty, controls the features of its website that the buyers may need for satisfactory online purchase. Perception of reward from exchange between the online retailer and a customer, based on the theory, therefore, induces a relationship that defines commitment and loyalty.

The social exchange theory into loyalty distinguishes economic and social rewards that that customers can derive from Amazon. Each party to a relationship compares the rewards from the relationship with those from other relationships in determining a relationship or relationships to uphold. The theory also provides that positive outcomes develop trust between involved parties and induce allegiance to partners that Amazon is likely to earn from satisfied customer, suggesting a relationship between satisfaction and loyalty. Once a dominant relationship has been established, continuous relationship between the involved parties develops rules that guide the relationship (Cahill, 2006). The role of social outcomes also means that a seller, such as Amazon, can focus on social outcomes, such as security, mutual understanding, and convenience, for developing customer loyalty and moderate economic outcomes for greater financial gain.

The adaptation level theory and the social exchange theory explains occurrence of customer satisfaction and customer loyalty based on existence of customers and sellers as two groups of stakeholders with possible competition and differences between sellers as the determinants of decision into satisfaction and loyalty. Consideration of interaction between customers and sellers over the internet or reliance on technology as a factor in the business environment identifies significance of additional factors. Experience with different forms of technologies may influence social benefits and cost of technology use and moderate constructs to customer satisfaction and loyalty, and perception of usefulness, ease of use, utility, compatibility of a technology influences attitude towards it and its usage (Cheng, 2015). Usefulness, ease of use, and enjoyment of technology are perceived if users can use the technology on their own without encountering difficulties. In addition, availability of technology at all times and in all regions influences intention to use the technology. Use of different forms of technology for information access and for conducting trade, across competitors such as in the e-retail business, may influence ease of use, usefulness, and ‘enjoyability’ to moderate customers’ willingness to trade with different sellers. These features further establish significance of features of interactive platforms, between customers and sellers, in determining ability and willingness to use an entity’s online platform and to derive satisfaction from the platform. Features of a website, such as its design, convenience, security, informativeness, and communication capacity, therefore, are likely to influence attitude towards the site and satisfaction from its use. The link that the theories establish between aspects of convenience, site design, communication, security and informativeness, satisfaction, commitment, and loyalty forms the basis for the study on the relationship between the constructs.

Conceptual Framework and Hypotheses

This section presents the conceptual framework of the study. It reviews and presents literature on relationships between the concepts and integrates these with concepts of the adaptation level theory and social exchange theory. The theories, considered within the context of online shopping, identify five constructs that relate with satisfaction. these are convenience, site design, security, communication, and informativeness. Satisfaction, commitment, and loyalty are other constructs among which the theories identify relationships within the online shopping context.

Shopping Convenience

Positive experiences with an e-seller, according to the adaptation level theory (Wertheimer, 2012), influences attitude towards the seller and behavior of the buyer. Experience with convenience, which surpasses the Adaptation level of a buyer is therefore likely to influence perception, induce satisfaction, and change behavior to purchase from the seller. Saving time that could have been used to travel to a retail store or money that could have been used for inquiries are examples of aspects of online shopping that a consumer can evaluate together with other experiences to determine attitude and satisfaction (Rabinowitz, Karuza, and Zevon, 2012; Chung & Shin, 2010). Srivastava and Kaul (2014) explain that convenience is a significant factor to experiences that consumers have and to satisfaction that they derive from purchase interactions. The general scope of convenience and its specific aspects of time saving and elimination or minimization of the physical distance to be covered to receive purchased commodities are also associated with customer satisfaction (Reimers & Chao, 2014). Ability to customize services to customers’ needs towards convenience to the customers has also been associated with customer satisfaction (Hu, Huang, Hou, Chen, & Bulysheva, 2016). A positive relationship between convenience of online shopping and customer satisfaction is hypothesized as follows.

H1: Shopping convenience has a significant positive effect on online consumer satisfaction

Site Design

Websites are the forums of interactions between buyers and sellers in e-businesses and form a basis for evaluation of experience with a website, from the adaptation level perspective of the adaptation level theory (Eiser, 2012). It offers information to buyers and presentation of the information could influence users’ attitude. Ease of use, according to the consumer acceptance model (Ratten, 2015) and ease with which information on products can be obtained, such as through use of drop down menu under catalogs or lists of items that are placed at strategic points are examples of site features that define experience. Other features are online chat options for guiding users and ease with which other forms of help can be obtained and can be evaluated, based on the adaptation level concept, to inform attitude that define satisfaction (Eiser, 2012). These can be grouped under navigational characteristics of a site that Bassam (2016) identifies as significant to satisfaction with usage of a site. Other groups of characteristics of websites are visual characteristics (Dai, Haried, & Salam, 2011) and informational characteristics. The appeal of a site such as use of color themes and animation are examples and can influence attitude of users, depending on individuals’ taste. Available information on a site, such as information on offered commodities, commodity descriptions, prices, and offers, are examples of information that can be available a website. Bassam relates the three categories of website characteristics with customer satisfaction upon interaction with a site. Besides the direct positive effects of website design on customers’ attitude, it influences overall quality of delivered services and this is likely to establish its moderator effects on satisfaction. In addition, website design influences purchase behavior, an effect that can only emanate from derived satisfaction (Dkudiene, Eertokas, McCorkle, Reardon, 2015).

Lim, Al-Aali and Heinrichs (2015) explains existence of an independent form of satisfaction that is associated with websites and its significance among existing users of a given website. Website design also mitigates negative effects of other features of a website such as inadequate information on products and retailers (Luo, Ba, & Zhang, 2012). These suggest a relationship between website design of an e-retailer and customer satisfaction.

Hypothesis 2: Website design has a positive effect on online consumer satisfaction

Security

Like convenience, security is an aspect of the online retail environment to which the adaptation level concept (Eiser, 2012) applies, and is likely to influence social and economic satisfaction in the environment. Online commodity purchase, as is the case of Amazon, involves use of technology for placing orders and even making payments. Security concerns that have been reported in online banking (Fadare, Ibrahim, & Edogbanya, 2016) are likely factors to financial transactions in online purchase and could discourage intention to purchase commodities over the internet. Results from online booking sites for tourists that have a similar scope as online purchase of retail commodities also identify significance of perceived risks on use of technology for reservation (Ozbek, Gunalan, Koc, Sahin, & Kas, 2015). In addition to effects of perceived risk of technology use, such as security risks, on intentions to use the technology, the perception can have negative effects on purchase behavior (Yue, Xiangbin, & Weiguo, 2015). Hino (2015) and Chung and Shin (2010) supports the role of security in technology acceptance that influences use, such as in online purchase and payments. These, coupled with the comparative approach to satisfaction and loyalty that the adaptation level theory (Eiser, 2012) and the social exchange theory (Cahill, 2016) establish identify significance of perceived security of an entity’s technology for conducting online sales to satisfaction with the technology because of similarity in involved risks. The perception and experience, is then compared with alternative to influence satisfaction with and behavior towards an entity and its website. Omar, Bathgate, and Nwankwo (2011), however, establish a significant and direct relationship between security and satisfaction and hypothesis 3 summarizes the expected relationship between security satisfaction due to consequences of security.

H3: Security has a significant positive effect on online consumer satisfaction

Communication

Visual characteristics and informative characteristics of a website influence satisfaction of online buyers (Bassam, 2016). Evaluation of the characteristics with experience of an adaptation level (Eiser, 2012) informs the satisfaction such that better experiences that expected define satisfaction. The visual and informative characteristics are forms of communication and imply significance of communication to level of satisfaction of online buyers. Luo, Ba, and Zhang (2012) also note that web design moderates negative effects of uncertainties that buyers may have. Lack of sufficient information on a subject induces uncertainty and provision of the necessary information that visual and informational aspects of web design achieve solves this (Luo, Ba, & Zhang, 2012). Website quality is another factor to customer satisfaction and Shin, Chung, Oh, and Lee (2013) identifies communication as one of its aspects. The authors report that website quality influences customer satisfaction into intension to purchase, and the effect can be attributed to communication with customers and the adaptation level concept of the adaptation level theory (Eiser, 2012). A direct relationship between communication with customers and satisfaction among online customers, therefore, is hypothesized as follows.

H4: Communication has a significant positive effect on online consumer satisfaction

Informativeness

Informativeness is an aspect of communication and defines usefulness of the communication. Consequently, significance of communication to customer satisfaction can be inferred to informativeness to the extent that the communication is informative, under the construct of the adaptation level theory. Informative characteristics also define website design (Bassam, 2016) whose effectiveness to customer satisfaction can be inferred to perceived informativeness. More informative recommendations, than information that customers have, is likely to increase customer satisfaction (Yoon, Hostler, Guo, & Guimaraes, 2013), and the relativity is consistent with the adaptation level concept of the adaptation level theory. Controlling information flow to ensure that necessary and informative information is delivered to an audience has also been associated with customer satisfaction. It prompts action among customers, develops a positive attitude among them, and enhances degree of satisfaction among the group (Wu, Wang, Wei, & Yeh, 2015). Consequently, informativeness of an online shopping website is expected to induce customer satisfaction as the following hypothesis outlines.

H5: Informativeness has a significant positive effect on online consumer satisfaction

Satisfaction and Commitment

The social exchange theory provides for mutual exchange of rewards between parties to an interest (Ridley & Avery, 2013) and explains development of trust and commitment following such benefits as satisfaction from a seller. Empirical results have established direct relationships between customer satisfaction and customer commitment. Customer satisfaction, according to Su, Swanson, Chinchanachokchai, Hsu, and Chen (2016), has direct effects on customer commitment to an entity. In addition, satisfied customers are willing to be identified with organizations that they relate with and the associated bond is a likely factor to commitment. Satisfaction further triggers repurchase and the retention scope defines commitment to an entity that customers develop because of satisfaction (Su, et al., 2016). A positive relationship between customer satisfaction and customer commitment, therefore, is hypothesized.

H6: Online customer satisfaction has a significant positive effect on commitment

Commitment and Loyalty

Commitment that satisfaction attract, under the social exchange theory’s provisions for mutual benefits and trust (Ridley & Avery, 2013) implies consistency in relationships that defines loyalty. The effects of commitment on the relationship between customer satisfaction and customer loyalty further suggest possible existence of a relationship between commitment and customer loyalty that interact with the relationship between satisfaction and loyalty (Wu, Zhou, & Wu, 2012). A series of relationships that Ching-Chow, Ping-Shun, and Yu-Hui (2014) establish between affective commitment, customer participation, and customer loyalty also suggests a possible relationship between commitment and loyalty. The authors did not establish a direct relationship between commitment and loyalty buy noted that commitment drives participation that then drives loyalty. The final customer loyalty that emanates from customer participation, therefore, can be attributed to affective commitment that drives participation (Ching-Chow, Ping-Shun & Yu-Hui, 2014). A study on New Zealand customers, however, establishes a direct relationship between commitment and customer loyalty. Even though the study was not specific to online customers, it identifies significance of affective commitment to explaining customer loyalty, even more than does customer satisfaction (Richard & Zhang, 2012). The developed positive relationship can be inferred to online customers who are part of the general population of customers. The relationship has further been established to be positive. Faryabi, Sadeghzadeh, and Zakeri (2015) note that commitment, together with such factors as trust and satisfaction have positive relationships with customer loyalty and these support the theory of social exchange. The direct relationship, according to Garcia and Rodriguez (2015) also exist among hotel customers, and these inform the following hypothesis.

H7: Commitment has a significant positive effect on loyalty

The following diagram summarizes the conceptual framework.

Figure 1: The conceptual framework