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This presentation simplifies the content of a white paper presented by Piyush Kumar regarding the Impact of Performance, Cost and Competitive Considerations on the relationship between Satisfaction and Repurchase Intent in Business Markets.
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THE REPURCHASE DECISION PROCESS
The Impact of
Performance, Cost & Competitive Considerations
on the Relationship Between
Satisfaction and Repurchase Intent
in Business Markets
A Whitepaper by -
Piyush Kumar
Vanderbilt University
MBA-2012 | COHORT-7
Asian Institute of Management
Hypothesis• Supplier’s Dilemma• Satisfaction
Modeling• Topics of Modeling
• Evaluation Criteria
• Data Collection
• Empirical Findings
Conclusion• Limitations• Future Research
Presentation Flow
Hypothesis
Performance criteria
influences customer overall
satisfaction
Customer experiences
with competing supplier affect
their repurchase intention
Effective Customer retention strategy
Supplier’s Dilemma
Customer management
Program
Profitability
Even after having effective Customer management program still Customer tends to have multiple supplier for 2/3rd of their requirements
What is Satisfaction?
Prior expectation
Performance level
Satisfaction level
Overall Satisfaction Model
◦ Overall satisfaction is a customer’s judgment regarding a fulfillment from product/service/firm
◦ Evaluation Process
◦ Use a set of Performance & Cost Criteria
◦ Aggregate multiple judgments to form global judgment
◦ Process Model of Satisfaction
◦ Evaluation Criteria based on –
◦ Competitive Norms
◦ Expectations & Performance
◦ Equity & Desires
Repurchase Intent Model
◦ Repurchase Decision Process in B2B is complex
◦ Performance | Cost | Competitive Considerations
◦ Overall Satisfaction & Repurchase Intent are different
◦ Service is less important in Repurchase Decision
◦ Market share has marginal correlation w/satisfaction
◦ Not evaluated in isolation; w.r.t. alternate supplier
◦ Implications for Suppliers of B2B Customers
◦ Benchmark for evaluation varies across customer base
Repurchase Intent Model
Satisfaction Gain/Loss
Cost Gain/Loss
Focal Supplier
Repurchase Intent
Satisfaction Gain/Loss
Cost Gain/Loss
Alternate Supplier
Relevant Criteria for Evaluation
Performance Criteria Product Quality Quality of product offering
Assistance in developing solutions
Customer Service Quality of Sales Team Leader
Delivery Processes
Cost Criteria Acquisition Cost
Maintenance Cost
Evaluation of Suppliers
◦ Core product
◦ Business Solution Development
◦ Sales team performance
◦ Delivery process
◦ Total Cost of Ownership = Acquisition Cost +
Maintenance Cost
◦ Increase in the satisfaction of these criteria will
increase the chances of Repurchase
Data Collection & Estimation
◦ Key representatives from major organizations
◦ Overall satisfaction with the supplier firm
◦ Based on people, products and services
◦ Likelihood of buying services to meet future needs
◦ Reduction of TCO is main criteria for all Buying Centers
Empirical finding of the research
Driving force for Overall Satisfaction
Problem solver not just product offering
Enhance satisfaction by post purchase service by sale force
Cost doesn’t have significant impact
Offer complete package
Driving force for Repurchase Intent
Level of customer satisfaction may not result in repurchase intent.
Customer’s perception of the overall competitiveness of the supplier
Both overall and relative satisfaction
Quality of product offering and ability to solve customer’s problems
Service offering part has greater impact than product offering part
Conclusion
◦ Relation b/w Satisfaction & Repurchase Intent is non-linear and content-based approach shows that
◦ Effect of Cost & Competitive Considerations on Repurchase
◦ Weight of Performance Criteria varies in OSat & RepInt
◦ Repurchase Intent is a measure of future purchases
◦ Recent alternate suppliers impact Repurchase Decisions
Limitations & Future Research
◦ Limitations
◦ Focus was on the firm and not on product/service
◦ Intent is not a perfect predictor of future purchase
◦ Future Research
◦ Bolster the Theory of Post-Purchase Behavior
◦ Impact of multiple suppliers on Repurchase Decisions
Thank You!Deepak Damodaran
Indrani Basu
Madhuranath R
Sahil Shah
Sandeep Kumar
Surendra Kumar