Rakesh Niraj, George Foster, Mahendra R. Gupta and Chakravarthi Narasimhan
Achieving high level of customer satisfaction (CS) involves spending marketing resources in terms of money, managerial time, and focus. Consistent with the return on quality…
Abstract
Purpose
Achieving high level of customer satisfaction (CS) involves spending marketing resources in terms of money, managerial time, and focus. Consistent with the return on quality framework this paper aims to look at both the costs and benefits of a satisfaction program.
Design/methodology/approach
This paper reports the results of a longitudinal study of a beverage distributor. Two satisfaction surveys were conducted before and after the launch of the program. Profitability was calculated using activity based costing (ABC) principles. The link between changes in satisfaction and changes in profitability was analyzed.
Findings
It was found that as a result of the launch of satisfaction program CS increased significantly, but the weighted least square analysis of the relationship between CS and customer profitability (CP) shows that it does not necessarily result in higher customer profits. CS is found to be positively related to sales volume and gross profits at the customer level. However, a net profit measure of CP, derived after careful allocation of costs based on activities, shows a much more complex and non‐linear pattern of relationship.
Originality/value
The paper shows that there are several valuable lessons to be drawn from the study. First, the cost of increasing satisfaction could be substantial. A positive relationship between satisfaction and profitability, posited by most of the customer satisfaction literature, could reach its limit much sooner than generally believed. Second, allocating costs based on activities in serving the customers, and not merely on revenues is important since doing so results in a different and more complete profitability profile of customers, as is described in the sample. Finally, the complexities and non‐linearities in the CS‐CP link documented in this study imply that satisfaction improvement efforts (and dollars) should be directed towards larger customers and customers who are already relatively highly satisfied.
Details
Keywords
Anand K. Jaiswal and Rakesh Niraj
This paper aims to examine the mediating role of attitudinal loyalty in the relationship between satisfaction and customer behavioral intentions such as willingness to pay more…
Abstract
Purpose
This paper aims to examine the mediating role of attitudinal loyalty in the relationship between satisfaction and customer behavioral intentions such as willingness to pay more and internal and external complaining responses. It also seeks to examine the nonlinear effects in the relationship between satisfaction, attitudinal loyalty and behavioral intentions.
Design/methodology/approach
The paper adopted the structural equation modeling approach to test the hypotheses (sample size 202). It used Marsh et al.'s unconstrained method to test latent quadratic effects in the conceptualized relationships.
Findings
The results support the fully mediating role of attitudinal loyalty in the relationship between satisfaction and behavioral intentions. The paper also finds partial support for nonlinear effects in the relationship. Results support nonlinearity, and in particular diminishing sensitivity, in the link from attitudinal loyalty to willingness to pay more.
Originality/value
The paper adds to the existing literature by detangling the complex relationships between satisfaction, attitudinal loyalty and behavioral intentions such as willingness to pay more and external and internal complaining responses. In particular, this is the first study to simultaneously examine the nonlinear effects of attitudinal loyalty on multiple behavioral intentions constructs. This study also establishes the superiority of a fully mediated model, in which satisfaction affects behavioral intentions through attitudinal loyalty, over a partially mediated model.
Details
Keywords
Grocery retailers have access to detailed data on consumer purchases within their own chains. Previous research has used across-chain scanner panel data to develop optimal price…
Abstract
Purpose
Grocery retailers have access to detailed data on consumer purchases within their own chains. Previous research has used across-chain scanner panel data to develop optimal price cuts targeted to individual households but whether such a targeting strategy will work with only within-chain data is unknown. The purpose of this research is to address this specific question.
Design/methodology/approach
The authors use scanner panel data from multiple categories to create across-chain and within-chain purchase histories for the same consumers. They then estimate models of purchase decisions on the two datasets and compare their performance.
Findings
Within-chain data fares significantly worse on both fit and prediction criteria. Retailers' upside to customizing is minimal compared to those reported for manufacturers. Finally, customized prices based on the within-chain model significantly underperform the promise of across-chain data.
Research limitations/implications
Store choice is not modelled. Research also needs to be replicated in other contexts. The authors conclude that limited purchase histories may not yield accurate enough estimates of marketing mix responsiveness, and that across-chain purchase histories are essential for effective targeted price cuts.
Practical implications
Loyalty card data may be useful for other purposes, like experimenting with segment-specific discounts, but its value in customizing prices at individual level is limited without adding other sources of information.
Originality/value
Previous research on price customization has been based almost exclusively on across-store data. However, retailers only have access to their own chain-specific data. This is the first study to comprehensively compare price customization based on within- and across-chain purchase data and show that the upside potential for price customization based on the former information set is quite limited.
Details
Keywords
Sanjeev Tripathi and Kopal Agrawal Dhandhania
The Olympic Gold Quest (OGQ) was founded as a Non-profit to support Indian athletes in their quest to win Olympic Gold medals by bridging the gap between the best athletes in…
Abstract
The Olympic Gold Quest (OGQ) was founded as a Non-profit to support Indian athletes in their quest to win Olympic Gold medals by bridging the gap between the best athletes in India and in the world. The support from OGQ has been instrumental to India in winning its highest number of medals at any summer Olympics. Buoyed by this success, OGQ has set up a target of achieving eight Olympic medals at the 2016 Rio Olympic Games. With OGQ relying on donations to support the athletes, the challenge is to market the Olympic cause by creating, communicating, and delivering the right offering for its donors.
Details
![Indian Institute of Management Ahmedabad](/insight/static/img/indian-institute-of-management-ahmedabad-logo.png)
Keywords
After working through the case and assignment questions, students will be able to: understand how product markets in a given global region are to be analysed and assessed; assess…
Abstract
Learning outcomes
After working through the case and assignment questions, students will be able to: understand how product markets in a given global region are to be analysed and assessed; assess various dimensions of consumer behaviour that would impact the strategies of a firm under consideration; identify how a firm can create its brand image and value proposition in a given international market; and evaluate and categorize various threat dimensions that a firm would experience in an international market.
Case overview/Synopsis
Bajaj Auto (BA) was India’s largest two-wheeler exporter, with ongoing exports to more than 75 countries worldwide. Besides being in other regions of the world, BA’s foray into the African market had been very successful, and it was growing from strength to strength in this market. BA’s motorcycles, three-wheeler rickshaws and small commercial vehicles had been successfully plying the roads of many countries in Africa such as Egypt, Nigeria and Kenya.
Rakesh Sharma (Sharma), the Executive Director of BA, knew very well that Africa was a high-risk-high-gain market for BA. Intense competition from Indian and international two-wheeler and three-wheeler manufacturers, global supply chain and logistics issues, various economic and legal challenges, and the threat of losing African consumer patronage were the challenging issues that Sharma was facing in this market. Would Sharma be able to effectively assess the market environment and consumer behaviour prevalent in the African countries? Would he be able to recognize BA’s brand and value-propositions and identify the international marketing challenges threatening BA’s smooth ride in this market?
Complexity academic level
The case can be taught in advanced undergraduate, MBA or executive-level programs.
Supplementary materials
Teaching notes are available for educators only.
Subject code
CSS 5: International Business.
Details
Keywords
The purpose of this paper is to review Egg Card's current marketing strategy, drawing on the recent media flurry over its disaffected customers. The paper also seeks to highlight…
Abstract
Purpose
The purpose of this paper is to review Egg Card's current marketing strategy, drawing on the recent media flurry over its disaffected customers. The paper also seeks to highlight the extent of Egg Card's contribution to the gap between marketing theory (i.e. marketing as an academic discipline) and practice (marketing in the real world) and to point out the implications this might have for the future of marketing as an academic discipline.
Design/methodology/approach
The paper adopts a qualitative content analysis of academic, media, and other official company reports on the development of the gaps between marketing theory and practice.
Findings
Egg Card's (post‐acquisition by Citigroup since May 2007) first‐mover response to the global economic downturn and ensuing credit‐crunch epitomizes the entrenched disconnection between how marketing is taught as an academic discipline and how it plays out in the real world.
Originality/value
The paper attempts to introduce a new concept – Jaymarketer – into the marketing literature in the hope that academics will become able to reconnect with the real world of marketing. Hopefully, this will set the stage for further research on how to bridge the dichotomies between marketing theory and marketing practice.
Details
Keywords
Sanjeev Tripathi and Kopal Agrawal Dhandhania
OGQ was founded by Geet Sethi and Prakash Padukone with the mission to support potential Olympic medal winners, in achieving their dream, with the help of all the stakeholders;…
Abstract
OGQ was founded by Geet Sethi and Prakash Padukone with the mission to support potential Olympic medal winners, in achieving their dream, with the help of all the stakeholders; and the vision to scout for potential talent and identify their needs. It had eminent personalities from sports who understood the problems with Indian sports and from industry who had a passion for sports and supported it. OGQ supported its athletes for the 2012 London Olympics through voluntary contributions and its athletes won four medals. For the 2016 Olympics, OGQ had a target of eight Olympic medals and was scaling up its support to athletes. Viren Rasquinha, the CEO of OGQ, knew that he had to focus on getting more contributions as he needed more resources to support the athletes. For this OGQ needed to review its communication strategy to the current and potential donors.
Details
![Indian Institute of Management Ahmedabad](/insight/static/img/indian-institute-of-management-ahmedabad-logo.png)
Keywords
Jin Ho Yun, Philip J. Rosenberger and Kristi Sweeney
The purpose of the paper is to contribute to the extant sport marketing literature by positing fan engagement, team brand image and cumulative fan satisfaction with the team as…
Abstract
Purpose
The purpose of the paper is to contribute to the extant sport marketing literature by positing fan engagement, team brand image and cumulative fan satisfaction with the team as factors influencing attitudinal and behavioural soccer (football) fan loyalty, with enduring involvement with the team as a moderator.
Design/methodology/approach
A convenience sample of Australian A-League soccer fans completed a paper-and-pencil, self-administered survey to evaluate their team on the focal constructs. A total of 207 participants were recruited from a major Australian east-coast university.
Findings
Using partial least squares-structural equation modelling (PLS-SEM), the study found that fan engagement influences both team brand image and cumulative fan satisfaction, while team brand image also influences cumulative fan satisfaction, and both of these constructs influence attitudinal loyalty and behavioural loyalty. The moderating role of enduring involvement was also found for two relationships: team brand image → attitudinal loyalty and team brand image → behavioural loyalty, along with a mediating role of attitudinal loyalty.
Originality/value
This study increases our understanding of the reasons why soccer fans are committed to and exhibit fan-related behaviours for a team, thus contributing to the sports-marketing literature on the relationships amongst fan engagement, team brand image, cumulative fan satisfaction, attitudinal loyalty and behavioural loyalty, along with the moderating role of enduring involvement. The findings also assist sports-marketing practitioners to formulate more effective, fan-centric marketing-communication strategies leading to a larger loyal fan base.