A compilation of three essays on modeling customer satisfaction

Maria Guhit Duffy, Purdue University


Part One attempts to explain the relationship between search effort and postpurchase satisfaction for (a) buyers of Asian, European, Ford, G.M., and Chrysler makes, and (b) repeat buyers and switchers. The results of using confirmatory factor analysis indicates that search has an insignificant effect on the satisfaction of switchers, and a negative effect on repeaters. Other findings show that search effort has a positive direct effect on satisfaction for buyers of Asian makes and a negative direct effect on satisfaction of buyers of Chrysler makes.^ Part Two establishes the effect of satisfaction on both intended and actual repurchase rate and positive and negative word-of-mouth behavior. A logit specification in a system of seemingly unrelated regression equations is employed to accomplish this task. The findings verify these hypotheses and conclude that satisfaction is indeed very beneficial for the firm. Moreover, by using likelihood ratio tests and comparing elasticities, support for the hypotheses that (1) the effect of satisfaction on repurchase rate decays over time, and (2) satisfaction has a greater impact on negative than positive word-of-mouth behavior, is found.^ Part Three models the effect of satisfaction on loyalty and switching behavior for market segments, manufacturers, and makes within a manufacturer. A two-choice stochastic model is used, which is a modification of Blumen's mover-stayer model. The results validate that satisfaction affects loyalty for all submarkets. However, for shoppers or non-loyals, satisfaction affects repeating and switching behavior only when the market is partitioned according to manufacturer. Satisfaction has no effect on the switching of customers from one market segment to another. ^




Major Professor: Gordon P. Wright, Purdue University.

Subject Area

Business Administration, Marketing|Business Administration, Management

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