Product loyalty despite dissatisfaction: The influence of investment

Lori Sue Miller Westgate, Purdue University

Abstract

Investment is a psychological construct involving the amount of time and effort people "put into" their ongoing relationships. The purpose of this study was to apply investment theory to explain people's commitment to retail goods and services (i.e., their product loyalty). Products that require little time or effort to be purchased and used (e.g., grocery/toiletry items) are classified as "low investment". Conversely, more complex products (e.g., VCRs, computers) can be considered "high investment". It was hypothesized that an interaction exists between satisfaction and investment level for predicting product loyalty behavior. Specifically, satisfaction level is expected to be very influential for loyalty to low-investment products (i.e., dissatisfaction will decrease loyalty, resulting in brand "switching"). However, since high degrees of investment create stronger commitment, it was hypothesized that dissatisfaction with high-investment products would not significantly decrease product loyalty. To test the hypothesis, questionnaires were administered to a convenience sample of college undergraduates. A scenario technique was used in which a fictional character was using a product/service and was either satisfied or dissatisfied. Given the option of switching to a competitor, the subjects were asked to predict the character's intention to remain loyal to the original product/service. The products/services used in the scenarios were a toothbrush, computer software, VCR, and auto mechanic. Manipulation checks were asked to determine if subjects accurately perceived the product/service as high or low in investment and satisfaction. Analyses of variance confirmed the validity of the investment and satisfaction manipulations. Overall significant main effects were found for satisfaction and investment, such that high satisfaction and high investment resulted in stronger loyalty. The hypothesized interaction was significant for some of the products. Loyalty did not significantly decrease due to dissatisfaction with the VCR (a high-investment product), but it did for the toothbrush (a low-investment product). This interaction was not significant for the computer software or mechanic scenarios. Reasons for this may relate to individual differences and people's perceptions of investment for various products. These results provide theoretical contributions to the consumer satisfaction and investment theory literatures. Implications for marketing practitioners are discussed.

Degree

Ph.D.

Advisors

Feinberg, Purdue University.

Subject Area

Marketing|Social psychology

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