Consumer Complaining Behavior Business Essay

ACKNOWLEDGEMENT

Beginning with the name of Allah for giving me strength and confident for the successful completion of the research. For this work special thanks goes to my supervisor Dr. Imtiaz Subhani, the support and confident he provides me with his information on the subject; which is remarkable. Especially grateful to every one assist with filling out the questionnaire and for giving valuable time. In the last part special gratefulness to parents for giving encouragement to work with excitement and enthusiasm. Not only the parents but also all family members support makes complete this vital and lengthened assignment.

ABSTRACT

Consumer complaining behavior was result of dissatisfaction from any product or services and may leads to complaining. At the result of dissatisfaction has two types of customers one who have taken no action and second who have take some complain action. This study focus on finding whether endogeneity exist or not in consumer complaining behavior while other factors such as product characteristics, demographics, psychographics variable were explaining it.

For this research the instrument was developed on the basis of Ian Phau and puspita Sari research work on engaging in complaint behavior an Indonesian perspective and the list of the actions was adopted from Krishnan and Valle 1979. A total of 90 respondents were selected randomly from Iqra University and different shopping malls in Karachi. The purpose of the research was to find out endogeneity of x variable in consumer complaining behavior the objective was to determine whether endogeneity exists or not. If there was endogeneity than it was showing that variable or set of variables that can explain consumer complaining behavior but have not yet studied.

For testing hypothesis and finding result optimal scaling and correspondence analysis were used.Result shows that endogeneity exist negatively in consumer complaining behavior which shows that some factor were not studied yet but having a negative impact on complaining behavior and negative endogeneity means as the involvement of endogenous variable decreases it was causing an increase in complaining behavior.Endogenous variables may be customer awareness, customer involvement, cultural civilization and literacy level. Such as low customer awareness was leads to increase in complaining behavior.

TABLE OF CONTENTS

1.0 INTRODUCTION

1.1 Overview———————————— ————————————— 4

1.2 Problem Statement—————————————————————– 5

1.3. Hypothesis——————————————————- —————— 6

2.0. LITERATURE REVIEW ——————————————————— 7

3.0. RESEARCH METHODS

3.1. Method of Data Collection ——————————————————14

3.2. Sampling technique———————————————————— – 14

3.3. Sample Size——————————————————————- —-14

3.4. Instrument Of Data Collection————————————————- 15

3.5. Statistical Technique——————————————————————16

4.0. RESULTS

4.1. Finding and interpretation of the results————————— – —– — 17

4.2. Hypothesis assessment summary———————————————- 24

5.0. DISCUSSION and CONCLUSION

5.1. Conclusion ————————————————————————— 26

5.2. Discussion —————————————————————————-27

5.3. Implications and Recommandations———————————————–29

5.4. Future Research———————————————————————-30

6.0. REFRENCES————————————————————————31

7.0. APPENDEX————————————————————————-33

CHAPTER 1:

INTRODUCTION

1.1 Overview

Consumer complaining behavior was a result of dissatisfaction from any product or services and may leads to complaining. At the result of dissatisfaction have two types of customers one were taking no action and second were who had taken some complain action.

For consumers who have take complain actions were further divided into two types of action which include private action and public action. In case of private action consumer warn friends, family and others and also stop using the product or services. In case of public action customer have seek redress from firm or manufacturer or try to reform personally.

Also in public action dissatisfied complainer complain to government and private agency. Finally in public action customer may take legal action against the company or manufacturer.

Consumers who take public actions were more beneficial to companies than one who takes private actions since public actions not only make companies aware of the problems faces, but also provide a chance for them to hold customers. It has been observed that complaining by dissatisfied customer provide an opportunity to seller as well as manufacturer to take some action in order to satisfy the customer.

The firms and companies who understand the reason of consumer complaint behavior can build up useful complaint resolution strategy, which was result in a constructive impact on customer retention, and reduced harmful word-of mouth, and develop base line presentation.

It was very important for the company to retain current customer as current customer were more willing to show loyalty by using a variety of the companies’ products or services. The positive word of mouth of current customer catches the attention of new consumers.

1.2: PROBLUM STATEMENT

The main objective of the research was to determine the endogeneity of x variable in consumer complaining behavior when other variable such as demographics, psychographic and product characteristics were predicting it. By finding whether endogeneity exist or not were able to find some other variables and also have impact on complaining behavior but were not study yet. So research finds some important variables which were ignored earlier. At the end of the research were able to find out some other variable that explain consumer complaining behavior. This research also have a limitation which include lack of data, there were no literature on finding the endogeneity in consumer complaining behavior.

1.3: HYPOTHESIS

H1: Endogeneity exists when predictors predict the taking complain action.

H 2: Complaining attitude at the time of dissatisfaction predict taking complain action.

H 3: Embarrassment predicts the taking complain action

H 4: Gender predicts the taking complain action

H 5: Monthly incomes predict the taking complain action

H 6: Residence predicts the taking complain action

H 7: Political association predicts the taking complain action

CHAPTER 2: LITERATURE REVIEW

Consumer complaining behavior can be defined as the identification and analysis of all of the aspects involved in the consumer response to a product or a service failure and the resulting perceived dissatisfaction. Consumer complaining behavior was the result of dissatisfaction which was neither psychologically accepted nor quickly forgotten with this was also underlined consumption of a product or service (Day, 1977; Singh, 1988, 1990).As per expectancy disconfirmation theory, which holds that argue that dissatisfaction leading to consumer complaining behavior was a result of the gap between consumers’ expectation and the actual performance of the product or service (Adelina and Julie, 1995).

Consumer’s assessment of the purchase experiences was mainly affected by consumer expectation (Day, 1977). Consumer becomes dissatisfied when the actual performance of the product or service does not meet with the expected performance. Because of the companies’ mass promotions of the product and services result in increase in consumer expectation and this increase in consumer expectation boost in firm sales, and consumer become frustrated if actual performance does not meet consumers’ expectations, and it result in complaining behavior (Mowen and Minor, 1998).

Dissatisfaction can be communicated in a number of ways and there were different Typologies which differentiate complainer from non Complainer (Singh, 1988; Krishnan and Valle, 1979). In general, four sets of actions can be summarized first dissatisfied customer take no action and not repurchase the firm’s product or services were logical responses to dissatisfaction (Day, 1984 and Richins, 1983).

Second, consumers can also take some form of private actions. This may include changing the brand or supplier, stop using the product or service, or warning family and friends. (Singh and Wilkes, 1996, p. 9). This group is classified as voicers (Singh, 1990).

Third, consumer can take some form of public action. Public actions involve trying to reform directly from the seller and manufacturer and taking legal action against the seller or manufacturer. Consumers may also be registering a complaint with the supplier or producer, a public consumer protection agency, or a private consumer organization (Davidow and Dacin, 1997). Complainers may also create a new company to provide a better product or service (Mowen and Minor, 1998).

As compare to private action consumers who take public actions were more beneficial to companies since public actions not only make companies aware of the problems were facing, but also give an opportunity for them to grip the customers (Davidow and Dacin, 1997).

As a result of dissatisfaction consumer blame seller and manufacturer and as a result stay away from sellers and manufacturers by stop using the products or services and also involved in negative word of mouth by spreading negative information about the products and services. (Singh and Wilkes, 1996). This last group was classified as activists (Singh, 1990).

It has been observed that complaining by dissatisfied customer provide an opportunity to seller as well as manufacturer to take some action in order to satisfy the customer. All firms and companies who understand the reason of consumer complaint behavior can build up useful complaint resolution strategy, which results in a constructive impact on customer retention, and also decrease unconstructive word of-mouth, and better the base line performance (Bolfing,1989, and Davis, 1993 and Bharadwaj, 1992 and Kelley, Hoffman, Fornell and Wernerfelt ,1987)

It was very important for the company to retain the current customer as current customer were more willing to show the loyalty by using a variety of the companies’ products or services. The positive word of mouth catches the attention of new consumers and was likely to feel concerned when companies face a problem such as product or service failures. Furthermore, suitable complaint treatment can improve customers’ perceptions of service quality and boost customer affiliation with and commitment to the firm (Chandrashekaran and Tax, Brown, 1998).

Consumer becomes satisfied when his experience meets the expectation that is positive disconfirmation on the contrary, when the expectations were not fulfilled by the experience, the customers were dissatisfied that is negative disconfirmation. A neutral reaction normally was the result of an even match between expectations and experience (Blodgett, Granbois and Walters, 1993, p. 403).

For that reasons, dissatisfaction should be measured as an antecedent of complaining (Landon, 1980) while the intensity of dissatisfaction seems to play a secondary role (Oliver, 1987; Prakash, 1991).

However, dissatisfaction was not enough for complaining and consumer complaint behavior could not simply be incorporated into a theoretical model of consumer satisfaction. (Bearden and Teel, 1983, p. 21, Day, 1984, p. 496) underlines that complaining behavior was reasonably following to disappointment and a different set of actions which was influenced by a combination of personal and Situational factors which come out to be not related to the strength of dissatisfaction.

Complainer always expects different possible outcomes for complaints. Complainer expect for a tangible solution of a problem, through repayment, exchange, repair; a psychological compensation obtaining apologies; a social benefit, “preventing the cause for the dissatisfaction from occurring to other consumers (Landon, 1977,)

Consumers who complain were divided into two groups in first category include complainer who complain because wish for assistance in resolving a problem, and in second group include complainer who complain because want sympathy. Complainer who falls in first category were easier to deal with and have a problem and sincerely want the problem solved. As compare to complainer in the first category the complainer in the second category were more complicated to handle and second category complainer were not actually looking for solution but wee more willing to have sympathy.

Such type of people may sense overwhelmed by definite conditions and probably by life in general. And want to believe that were not without help in the perception of things being the way.Complainer in the second group of complainer were looking for a sense of sharing that help them to face the world and give them a confident that no matter how terrible the world might be were all in this together.

The complainer who never complains falls into another category such type of complainers were in nature positive and perceive the good in most situations and hardly ever complain because see nothing to complain about. When in case of non complainers were never enthusiastic to complain if such non complainers engage in problem then keenly try to solve it. And in case of need a help than request for it rather than going for complaining. It was usually a

more useful way on the road to problem resolution and it was much less annoying to family and friends.

For such type of non complainer complaints rotate into war stories story shared over dinner or gathering about problems facing and how the problem was come a crossed as well as avoided. The war stories approach gains the same kindness and friendship that complainers seek, but not including the annoying negative side effects. Conflict between the consumer and the service provider also result in consumer complaining behavior. Complaining also was the result of higher expectation of the consumer than actual quality of product or service.

Consumer complaining was the indicator of firm unsatisfactory performance and in case of absence of complaining firm may not aware of the problem and thus were not be able to improve the performance ( Davidow and Dakin, 1970)It was also observe that consumer who do complain and were dissatisfied with the service or product had higher level of repurchase intention as compare to non complainer.

Complaining provides firm an opportunity to correct the mistakes. So it was very important for firm to resolve the complain and satisfy the complainer so than firm be able to retain the customer. Firm need to train employees to handle the complains and appropriate response to complain can avoid the customer switching.Consumer complaining behavior was also influenced by cultural background there was more differences in complaining behavior of customer from different cultural background.

In individualistic culture complaining for consumer was the right of every consumer and was the necessary part of the purchasing process where as consumer in collectivist culture was

afraid to complain. It was also observe that one who complain were more socially responsible and were more willing to take risk and were the psychographic characteristics.

Product characteristics were also having a relationship with complaining behavior as product was not performing as promised by the firm it leads to negative impact on the firm’s image (.Day and Lando 1977)

Price was also considered an important characteristic in complaining as price of product increases and product become expensive people may more engage in complaining. A useful exercise for getting closer to the customers and understanding them better. If complaints were transformed into knowledge about customers, it can provide a significant amount of assets for enterprises. To utilize this capital, companies have to design, build, activate and continuously improve systems for managing complaints. Such systems were named as customer CCM systems. However, Tax et al. 1998 state that in general, firms were not well informed on how to deal with either service failures or with the impact of CCM system

Complaining behavior was also influenced by the level of experience consumers who were more experienced were more willing to complain when dissatisfied as compare to one who was less experienced in the market place. (Morel, Poiesz, and Wilke 1997). Consumers who were more experienced in the marketplace were more confident and were more comfortable to deal with the firm or seller, and for them there was more probability to complain on a regular basis.

It was observed that firms were unaware of consumer complaint actions because the minority consumers actually complain directly to the producer or very few customer voices complain directly to the firms. Consumers who were not satisfied with the product or service

normally share negative experiences with other firm, and it may have a major impact on the performance as well as sales and profitability of the firm. (Day et al. 1981).

So firms need to give confidence to the complainers to complain directly to firms specially to avoid negative word of mouth. By encouraging the customer to complain it outcome in raise in fulfillment with a service. This raise in happiness was even superior among the primarily less satisfied customers, so it shows that encouraging complaint behavior may do wonders.

There were several benefits of customer complaining such as for consumer who complain and when the problem was solved than such consumer become more loyal as compare to one who had never any problem and were less loyal to the company.. Customers who actually do not complain when have a problem and actually did not spend sufficient in the product to put effort into fitting it. So were relatively throwing it and prefer to purchase a different from someone else. If customers were not interested in fixing it, surely were not interested in making recommendations to others.

CHAPTER 3: RESEARCH METHODS

3.1 METHOD OF DATA COLLECTION

As know that two types of data which was primary data and secondary data. In this research data was collected from primary sources and was primary data. Secondary data was also use in this research from different journals, articles and books available on internet. In this research main focus was on primary data obtained from questionnaire survey conducted in university, super store and shopping malls.

3.2 SAMPLING TECHNIQUE

In this Research of consumer complaint behavior sample size of 90 questionnaires was filled by both male and female in Iqra University and different shopping malls and super stores located in Karachi. The respondents were selected on random basis due to the convenience because I was not having an access to the proper list of respondents

3.3 SAMPLE SIZE

In this research the total sample size was of 90 respondents including both male and female which include 58 male and 32 female belonging to different age group and all of them were from Karachi

3.4 INSTRUMENT OF DATA COLLECTION

In this research questionnaire was developed as a research instrument for the purpose of data collection through questionnaire survey and SPSS was used as a testing tool.For this research questionnaire was developed based on Ian Phau and puspita Sari research work on engaging in complaint behavior an Indonesian perspective and the list of the actions was adopted from Krishnan and Valle 1979.Questionnaire was used to collect the information of complainer and non complainer and also the action taken by them.

Validity and Reliability Test

Content validity of questions was tested by showing it to the supervisor who are keenly in touch in class room teaching to get the professional opinion and obtain a conclusion as to whether the objects meet up the criterion. The questionnaire was developed by Ian Phau and puspita Sari .

Table 3.1

Reliability Statistics

Cronbach’s Alpha

No of Items

.624

6

Number of items include in the reliability test were 6 and Alpha .624

3.5: STATISTICAL TECHNIQUE

The data collected through questionnaire filled directly by respondents was tabulated in SPSS software. Correspondence analysis and optimal scaling were used for the analysis of variables and the association among independent and dependent variables.

Correspondence analysis was used as a test method as it was applied when because have categorical variable as dependent variable and have both scale and categorical predictors which made it necessary to apply Correspondence model on this research

CHAPTER 4: RESULTS

4.1: FINDING AND INTERPRETATION OF THE RESULTS

OPTIMAL SCALINIG

Table 4.1

Model Summary

Multiple R

R Square

Adjusted R Square

Apparent Prediction Error

.837

.701

.645

.299

Dependent Variable: take complain action

Predictors: always complain when dissatisfied complaining distasteful to me find it embarrassing to complain gender monthly income Where do you live political association

The above mentioned table of model summary shows that total variation explains by the model is 64.5% that is of adjusted r squar

Table 4.2

ANOVA

Sum Squares

df

Mean Square

F

Sig.

Regression

63.059

14

4.504

12.539

.000

Residual

26.941

75

.359

Total

90.000

89

Dependent Variable: take complain action

Predictors: always complain when dissatisfied complaining distasteful to me find it embarrassing to complain gender monthly income Where do you live political association

After applying optimal scaling technique on SPSS table 2 of ANOVA was obtained the significant value to be measured in table 2 is the p (sig) value which is significant. Which shows that model is significant.

Table 4.3

Coefficients

Standardized Coefficients

df

F

Sig.

Beta

Bootstrap (1000) Estimate of Std. Error

always complain when dissatisfied

.744

.068

2

118.874

.000

complaining distasteful to me

.257

.151

2

2.895

.062

find it embarrassing to complain

-.263

.162

3

2.646

.055

gender

-.047

.078

2

.359

.699

monthly income

-.078

.116

2

.444

.643

Where do you live

.129

.094

1

1.872

.175

political association

.282

.094

2

9.021

.000

Dependent Variable: take complain action

The above mentioned table shows the standard regression coefficient. The result shows that largest coefficient was for Always complain when dissatisfied that was .744 and second largest coefficient for political Association that is .282.The results shows that only two variables were significant among all it include always complain when dissatisfied and political association

Correspondence Analysis

Table 4.4

Correspondence Table

Take complain action

Complainer Action

Chang Brand /Supplier

Stop using product

warned friends and families

tried to reform personally

wrote a complain letter

Non Complainer-take no action

Non Complainer-change brand

Non complainer-stop using product

Non Complainer-warned friend and family

Active Margin

yes

05

12

11

10

09

00

00

00

00

47

no

00

00

00

10

8

13

12

43

Active Margin

7

16

11

10

9

10

6

9

12

90

The correspondence table shows the distribution of Complainer Action for complainer action category of Yes and No. The rows of the correspondence table represent that whether customer take complainer action or not in term of Yes or No. The columns represent the Complainer and Non complainer actions. The marginal row totals show that the totals of customer who take complain action is 47 which are higher than those who did not take complain action. For non complainer the total is 4.

Looking at the column totals we can observe that for Complainer the mostly taken action is Stop using product having a value of 16 followed by second mostly taken action of warned fried and family with total of 11 and also another action of complainer that is Tried to reform personally is having value of 10.

Looking at the column totals for Non Complainers the mostly taken action is stop using product by having total of 12 out of 43, followed by warned friend and families having a value of 12.we can also observe that out of 43 non complainers 10 are those who have taken no action

Finding Endogeneity

In order to find out whether endogeneity exist or not in consumer complaining behavior a two step regression analysis was applied and the result shows endogeneity exist negatively in consumer complaining behavior. Which means that there were ignored variable in complaining which have negative impact of dependent variable.

Table 4.5

Regression

Variables Entered/Removed

Model

Variables Entered

Variables Removed

Method

1

Ignored X Variable

.

Enter

Dependent Variable: take complain action

Table 4.6

Model Summary

Model

R

R Square

R Square adjusted

Estimate of the error

1

.637(a)

.406

.399

.38940

Predictors: (Constant), Ignored X Variable

Table 4.7

ANOVA

Model

Squares Sum

Df

Square Mean

F

Sig.

1

Regression

9.112

1

9.112

60.090

.000(a)

Residual

13.344

88

.152

Total

22.456

89

a Predictors: (Constant), Ignored X Variable

b Dependent Variable: take complain action

In order to find out the endogeneity in complaining behavior two step regression was applied and above mentioned table of ANOVA was obtained.

ANOVA table shows that the p value (sig) for model is less than .05 which means that model is significant. It means that endogeneity exist

Table 4.8

Coefficients

Model

Unstandardized Coefficients

Standardized Coefficients

t

Sig.

B

Std. Error

Beta

1

(Constant)

1.935

.072

26.933

.000

Ignored X Variable

-.309

.040

-.637

-7.752

.000

a Dependent Variable: take complain action

Above mentioned table of coefficient shows that the value of Beta is negative which means that there is negative impact of ignored variable on dependent variable. It means that the set of ignored variables causing the endogeneity as the ignored variables were increased it was result in decrease in consumer complaining behavior and also by reducing the ignored variable it was resulting in increase in complaining behavior.

Ignored Variable (X Variable)

In order to find out whether endogeneity exist or not a two step regression analysis was applied and as a result a new ignored variable was obtained which was named as X variable.

Observation for ignored variable were 98

Ignored variable (X Variable) was suspected of causing endogeneity

Table 4.9

2.68662

2.8464

1.40086

2.49011

1.76394

0.64475

0.64475

1.40086

2.2868

2.32354

3.01296

-0.4445

1.36412

1.36412

1.92372

2.49011

2.2868

1.20435

1.36412

0.64475

0.64475

2.48332

3.0497

-0.0814

2.32354

1.36412

-0.4445

-0.4445

1.76394

2.12703

3.77587

2.68662

-0.0814

0.07836

0.07836

-0.1182

0.44144

1.20435

2.12703

0.44144

1.7272

1.7272

1.36412

2.12703

2.32354

2.32354

2.49011

-0.2847

-0.2847

0.84126

2.12703

1.92372

1.76394

0.80452

1.36412

1.36412

1.40086

-0.2847

2.8464

2.64988

0.80452

0.64475

0.64475

-0.0814

2.68662

2.12703

3.77587

0.64475

-0.2779

-0.2779

1.40086

0.64475

2.85319

3.41279

0.44144

1.36412

1.36412

3.0497

1.20435

2.49011

0.44144

0.07836

0.64475

0.64475

1.76394

1.40086

2.12703

0.64475

0.84126

1.20435

1.20435

1.92372

2.12703

2.12703

1.36412

0.80452

-0.0814

-0.0814

Results for Endogeneity

As the purpose of the study was to find out whether endogeneity exist or not, result show that there was endogeneity in consumer complaining behavior .Endogeneity was find by applying two step regression and table of ANOVA shows the value of p less than .05 which was significant it means endogeneity exist.

Result also shows the coefficient table in which the value of Bet