Consumer Behavior in Travel and Tourism/GROUP 3: Dissatisfaction and post-purchase word-of-mouth

2008-11-26T21:48:28Z

158.132.47.45: /* 1. Introduction */

Interview 8 friends/relatives about memorable cases of dissatisfaction during a trip. Try to learn what the causes of dissatisfaction were, and what they did or did not do after they were dissatisfied. As part of the interview, learn exactly:
a) who they talked to (if anyone),
b) how many others they told about it,
c) what aspects they talked about,
d) if they talked to the company/outside agency, what was the result.

'''Analysis:''' From the results, summarise:
a) what makes people dissatisfied and how this may differ among respondents with different characteristics,
b) what makes them complain, and
c) specific strategies companies should use to handle complaints well and increase customer satisfaction.

'''Group 3:'''

* KUNG Man Yee Kathy (07544282d)
* YIP Tsz Leung Walter (07545820d)
* LAI Tin Hang Michael (07542504d)
* LEUNG Man Yee Cassie (07594107d)

[[Consumer Behavior in Travel and Tourism]]
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== '''1. Introduction''' ==

'''1.1 Background'''

Travel and Tourism is one of the world’s largest sectors in service industry. It is becoming more and more important in term of generating GDP and job opportunity for the countries (Hui, Wan & Ho, 2005). Prospects of travel and tourism also benefit other industries, such as retail and transportation. In Hong Kong, travel and tourism is also one of the main pillars in economy. The number of people travel oversea is increasing rapidly in the last few years. According to Statistical Review of Hong Kong Tourism (Hong Kong Tourism Board, 2006), the number of overall departure from Hong Kong is increased by more than 5%, that is up to 75 millions. However, customers become more demanding and information driven (Hui et al., 2005). Therefore, destinations and travel agencies may need to understand what makes customers satisfied or dissatisfied during their travel.

Tourists’ satisfaction or dissatisfaction can be two outcomes from travel experience. Swan and Combs (1976) stated that customers will make judgment to products based on a limited set of attributes. Some of them are relatively important in determining customers’ satisfaction, while some are not critical to satisfaction but related to dissatisfaction if performance on them is not satisfactory. Satisfied customers are more likely to have repeated purchases, customer loyalty (Anderson & Sullivan, 1993) and word-of-mouth (WOM) publicity (Cronin & Taylor, 1992; Fornell, 1992). On the other hand, dissatisfied customers may lead to negative WOM.

When customers are dissatisfied, several post-purchase behaviors may be caused. The most obvious one is complaint. For example according to statistics from Hong Kong Consumer Council, overall tourists’ complaints rose to 2,812 cases (33%) in 2007 (Eng & Mak, 2007). Showed from Travel Industry Council’s data, the number of complaints that related to package tours in the first seven months of 2007 jumped more than 20%, which were 484 cases (Eng & Mak, 2007). However, it may be difficult to obtain the number of complaints from individual travelers towards the destination or service providers of the destination. Complaint from dissatisfaction customer is an opportunity for service providers or companies to remedy their problem and have improvement (Blodgett, Wakefield & Barnes, 1995). However, some of the dissatisfaction customers may exit and engage in negative WOM behavior (Blodgett et al., 1995). That may make service providers or companies difficult to handle those dissatisfaction customers and make evaluation of their performance. Therefore, it is important for industrial practitioners to deeply understand the reasons that make tourists feel dissatisfied and their actions after they are dissatisfied. By developing better strategies to deal with customers’ dissatisfaction, positive WOM and customers’ satisfaction may result.

'''1.2 Objectives'''

The purpose of this study is to investigate the causes that make travelers dissatisfied and their post-purchase behaviors. The specific objectives of this study included:

1. To investigate what makes people dissatisfied;

2. To examine is there differences among respondents with different demographic characteristics towards the causes of dissatisfaction and post-purchase actions;

3. To look at what drives people complain or not complain;

4. To provide recommendations for react among different post-purchase actions and increase customer satisfaction.

== '''2. Theoretical Background''' ==

'''2.1 Consumer Satisfaciton/Dissatifcation (CS/D)'''

Although often studied, a precise definition for CS/D is somewhat illusive. A customer satisfaction concept consisted of three constructs: the cognitive, affective and systemic (Hartman, 1973). Babin and Griffin (1998) had provided a relatively clear definition on consumer travel satisfaction (dissatisfaction) which is conceptualized and operationalized, positive (negative) response resulting from the consumers’ feedback of travel experiences.

Further supported by Pizam, Neumann, and Reichel (1978), tourist satisfaction can be defined as a result of a contradiction between one’s experience at the destination and the expectations one had about that destination. While the contradiction results in feelings of gratification, the tourist is satisfied, if the result shows displeasure, the tourist is dissatisfied. More likely, customer satisfaction has become an interesting study for both scholars and marketing professionals who aim at quality improvement and analyze the repurchase behaviour (Yu & Goulden, 2006).

'''2.2 Expectancy Disconfirmation Model'''

Customer’s post-purchase assessment of service delivered and comparison of customer’s expectations and the actual service experience is later defined as customer satisfaction (Hunt, 1977). Oliver (1980) refined the concept and generated the expectation-disconfirmation model; a sense of expectations has developed before purchasing a product and eventually a comparison would be made between their actual experience and expectations. A positive disconfirmation (PD) takes place if the actual performance/experience outweighs their expectations, it means the consumer is satisfied and is willing to re-purchase. However, if the actual performance is below the expectations, negative disconfirmation will be formed and consumer mostly looks for alternatives for the next purchase. In most of the past literatures, many scholars did test or apply the Expectancy Disconfirmation Model, for instance, Weber (1997) conducted a study on 69 German tourists’ satisfaction towards Australia; most widely accepted model of satisfaction formation is the EDP model where satisfaction is a function of disconfirmation, which in turn reflects the consumers’ expectations and perceptions/ experiences (Hui et. al., 2007). It means if perception/experience meets expectation, confirmation occurs, vice versa. Confirmation results in tourists feeling satisfied, whereas PD and ND result in the difference of tourists feelings (Cho, 1998).

The disconfirmation affects the overall satisfaction which may influence one’s repeated purchase and brand loyalty. To know more accurately on the responses to customers’ dissatisfaction, Zeelenberg and Pieters (2004) found that the specific emotions, regret and disappointment have a significant impact on tourist’s behavioral responses.

'''2.3 Behavioral Responses to Dissatisfaction'''

A poor experience or service failure will result in dissatisfaction; dissatisfaction will then in turn lead to various behavioral responses, such as, complaining, negative word-of- mouth and decisions not to repurchase. (Ennew & Schoef, 2004). These kinds of responses are often referred as Consumer complaint behaviour, which is defined by Jacoby and Jaccard (1981, p.6) as “an action taken by an individual which involves communicating something negative regarding a product or service either to the firm manufacturing or marketing that product or service or to some third-party organizational entity”.
Previous literatures show several attempts to classify complaint behavior. In Day and Landon’s (1977 cited in Gursoy, McCleary, & Lepsito, 2003) study, a two-level classification hierarchy was constructed. In the first level, behavioral responses were separated from non-behavioral responses (i.e. inertia). In the second level, actions were divided into public and private ones. Public actions include complaining to sellers and consumer organizations, seeking redress from sellers or taking legal actions; while private actions include Word-of-mouth communication to friends and relatives and boycotting the seller. Singh (1988), classified complaining behaviours into three types, which are voice responses (seeking redress from seller or do nothing), private responses (word-of-mouth communication) and third-party response ( seeking helps from media, government departments, consumer protection council or implementing legal action). Zeelenberg and Pieters (2004) divided behavioral responses into four types, switching, inertia, word-of-mouth and complaint.

'''2.3.1 Complaint'''

'''''2.3.1.1 Motives for complaint'''''

Serious problem or bad experience that a consumer could not tolerate could induce the action of complaint (Nyer, 2000). In Hueng and Lam’s (2003) study on customer complaint behaviour towards hotel restaurant services, it was found that the most common complaint motives include “seek corrective actions” and “ask for explanation” followed by “seek apology” and “express emotional anger”. Surprisingly, complainers do not really focus on compensation as compared to other motives in the study. The motives of “seek compensation” and “seek redress” were rated relatively

'''''2.3.1.2 Barrier of Complaint'''''

However, many consumers do not actively complain. Previous researches indicated that about 50 percent of consumers choose not to complain. (Day, Grabicke, Schaetzle and Staubach 1981; TARP, 1986 cited in Gursoy et. al., 2003). Previous researches revealed that there were three major reasons that consumers choose not to complain. The first reason is it is not worth the time and effort to complain that the anticipated cost is believed to be greater than the anticipated gain (Day & Landon, 1977; Day, Grabicke, Schaetzle & Staubach, 1981; TARP, 1986). Second, consumers might not know or familiar where or how to complain (TARP, 1986; Villarreal-Camacho, 1983). Thirdly, consumers might believe that nothing will happen even if they complain (Lewis & Morris, 1987 cited in Gursoy et. al., 2003).
These barriers of complaint actions may lead to damage to business as a service failure can be recovered only if the customer lets the service provider know about the failure (Gursoy, McCleary,& Lepsito, 2007). More importantly, although dissatisfied consumers may not actively complain, they may simply switch to alternatives or spread negative word-of-mouth which lead to strong impact.

'''2.3.2 Word-of-Mouth'''

Word-of- Mouth communication (WOM) is a “process allows consumers to share information and opinions that direct buyers towards and away from specific products, brands and services” (Hawkins, Best, & Coney, 2004 cited in Litvin, Goldsmith & Pan, 2007, p.459). With the growth of technology, WOM can also be mediated by electronic means using websites, blogs and forums (Buttle, 1998 cited in Litvin, et. al., 2007). The digitalization of WOM brings possibilities and also challenges to marketers that eWOM appear in large scale and border scope and speed up the spread of WOM.V (Per Dellarocas ,2003 cited in Litvin et. al., 2007).
WOM communication is an important alternative information source for consumers and play significant role in consumers’ decision-making process especially when dealing with intangible products and services. (Swan & Oliver, 1989; File, Judd, &Prince, 1992; Gremler, 1994 cited in Cheng, Lam, & Hsu, 2006).

'''''2.3.2.1 Motives of Word-of-mouth Communication'''''

In Sundaram, Mitra and Webster (1998), motives of negative WOM communication were summarized. They include: Altruism, which is to present others from experiencing the problems that they had encountered; Anxiety reduction, which is to vent consumers’ anger through negative WOM communication; Vengeance, which is intention of retaliates against the offending business by deterring others from patronizing the business through advice; Advice seeking, which is to share the negative experience to obtain advice on solution of the problems.

'''''2.3.2.2 Impacts of Negative Word-of-mouth on Travel Industry'''''

It was found by previous research that dissatisfied consumers are more likely to express their feelings to others than satisfied consumers (Tax, Brown, & Chandrashekaren, 1998 cited by Cheng, et. al., 2006). Researches (Richins, 1987; Hart & Heskett, 1990; Furlong, 1993) revealed that dissatisfied consumers would tell an average of 10 people about their experience, while satisfied consumers would only tell an average of 3-6 people about their experience.

The impacts of negative word-of-mouth on travel industry were recognized by previous researches. Cited in Litvin, et. al. (2007), Morgan, Pritchard, and Piggott’s (2003) research revealed that negative WOM can have an overwhelming impact upon a destination’s image, as dissatisfied visitors spread unflattering comments related to their experiences. Similar result was found in Crick’s (2003) study that negative WOM would possibly lead to a downturn in the travel industry in Caribbean. It was suggested by Cheng et. al. (2006) that, WOM recommendations are more influential for hospitality industry due to the nature of inseparability between service production and consumption.

'''2.3.3 Inertia'''

According to Zeelenberg and Pieters (2004), inertia is “doing nothing in response to a failed service encounter”.

'''2.3.4 Switching'''

According to Zeelenberg and Pieters (2004), switching refers to the “termination of a relationship with the service provider. This termination may either be followed by initiating a relationship with another service provider, by performing the service yourself, or refraining from the service altogether”.

'''2.4 Influences of Demographics on Behavioral Responses to Dissatisfaction'''

Previous researches indicated demographic characteristics such as age, gender and education influenced the customer complaint behaviour. It was found that younger consumers with higher education level are more likely to complain as they have a higher demands and expectations than other groups of consumers (Morganowsky and Buckley, 1987 cited in Lam & Tang, 2003; Sign, 1990 cited in Lam & Tang, 2003; Lam & Tang, 2003; Day and Landon, 1977 cited in Heung & Lam, 2003). Female consumers were found to be more likely to complain than males in several studies (Keng, Richmond, & Han, 1995 cited in Lam & Tang,2003; Kau et. al., 1995 cited in Heung & Lam, 2003; Heung & Lam, 2003), while on contrary, some studies indicated males are more likely to complain (Babakus et. al., 1991; Reiboldt, 2002 cited in Ngai, Hueng, Wong, & Chan, 2007). .

== '''3. Methodology''' ==

'''3.1.Target population'''

The target population of this study consists of eight Hong Kong residents who have memorable cases of dissatisfaction during the group tour or package tour.

'''3.2.Research Framework (Figure 1)'''

In order to achieve those objectives, qualitative approach with judgment and snowball sampling was adopted in this research. Qualitative approach was used for understanding the up-to-date insights of Hong Kong residents with the topic of the dissatisfaction during the trips, while in-depth interview of eight interviewees were conducted to collect the related information, such as the causes of dissatisfaction and the action after dissatisfaction.

In addition, secondary data from the journals, internet and newspapers were gathered as supportive sources. It enhances more understanding about the definition of dissatisfaction and what is the potential post purchases behavior in pervious consumer behavior studies.

'''3.3.Qualitative Research – In-Depth Interview'''

Eight Hong Kong residents were invited in the in-depth interview, they would provide related information to enhance the reliability to the research, and together with fewer research biases. The interview lasted approximately 20 minutes. The in-depth interview was semi-structured, with the topics of discussion being flexible and interviewers were encouraged to discuss their thoughts, feelings and experiences about dissatisfaction and post purchase behaviors. Four main questions were asked during the interview (Appendix 1), some supplementary questions were followed in every main question for collecting additional information. The first question was aimed to understand the causes of dissatisfaction and the factors that contribute t such dissatisfaction. The second question was trying to access the reaction of respondents when they felt dissatisfaction. The third question aimed to investigate did they share the dissatisfaction with others, while last question was focused on examining respondents did they inform other organizations for solving such dissatisfaction.

The interview was conducted in both English and Cantonese. All the speeches from the interviewee were recorded and translated into English for the study use. The interview were recorded and transcribed. Transcript was edited and the data were coded by using open coding. In addition, a data display of the analyzed data was undertaken and presented.

'''3.4.Pilot Study'''

A pilot test was conducted on two target respondents and one SHTM lecturer to clarify the overall structure and approach to the project whilst validating the measuring instrument to be used. Problems of misinterpreting questions occurred in the pilot resulting in improving the questionnaire in both form and content (e.g. lay out of questions and alternatives, difficult to understand questions, improvement of instructions, etc.).

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Consumer Behavior in Travel and Tourism/GROUP 3: Dissatisfaction and post-purchase word-of-mouth