Repeat Purchases & Customers
In recent years, a considerable amount of effort has been devoted to understanding the importance of repeat purchases/consumers in a dynamic and competitive marketing environment.
The knowledge synthesized from available literature demonstrates that economic success and competitiveness of most organizations depend on their ability to maintain long-term relationships with consumers who purchase their product or service offerings repeatedly (Paul et al., 2009). Therefore, it can be argued that the cardinal importance of encouraging repeat purchases/customers is to enhance the economic success and competitive advantage of organizations.
Marketing managers may employ a multiplicity of resources and strategies to encourage repeat purchases/customers. Some of the most used strategies include: Service product assortment; customization; low price offerings; reliability and uniqueness; provision of value-added products and services; service environment enhancement through servicescaping and service location; corporate social responsibility, and; reputation and image building (Paul et al., 2009).
High-Low Involvement Purchase
Some examples of high-involvement purchases made include investing in stocks, buying a personal computer and purchasing a hi-fi stereo music system. Some high-involvement purchases made include buying a soft drink from the vendor and consuming a hamburger.
In the first instance (high-involvement), the following decision making process was followed: Recognized need to own personal computer; searched for information on type and price of computer to satisfy need; evaluated possible alternatives to come up with best deal; made purchase, and performed post-purchase evaluation to see how the computer met felt needs (Tutor2U, 2012). In the second instance (low-involvement), need recognition was identified through hunger followed by purchase of hamburger.
There exist salient differences in the two purchases as one involves five stages while the other involves two stages. In low involvement purchases, a customer does not need to go through some stages of decision making, such as information search and evaluation of alternatives, as they seek to fulfill a low-risk immediate need.
In high-involvement purchase, however, the customer is engaged in high expenditure enterprises involving a great deal of personal risk. Consequently, they go through all the five processes of decision making (need recognition, information search, evaluation of alternatives, purchase, post-purchase evaluation) to make the purchase (Tutor2U, 2012)
Kotler (1996) cited in Wang & Shieh (2006) defined customer satisfaction “…as the level of a person’s felt state resulting from comparing a product’s perceived performance or outcome in violation to his/her own expectations” (p. 196). Customer satisfaction has a wide and varied impact on marketing.
Available research demonstrates that customer satisfaction not only leads to customer loyalty and repurchase intentions, but also to organizational productivity and profitability (Anderson et al 1997). These constructs facilitate the organization to not only market its products and services in a more effective and efficient manner, but also widen its target market for the product offerings, hence ensuring its survival and growth
Customer satisfaction is important due to varied reasons. Satisfied customers, it is argued, assist organizations to secure future revenues, lessen the costs of future transactions, reduce price elasticities, and minimize the probability that customers will defect to competitors if quality of product or service falters.
Internally, according to Anderson et al (1997), “…customer satisfaction reduces costs associated with defective goods and services, such as warranty costs, field service, reworking/replacing defective goods, and handling/managing complaints” (p. 131). Lastly, positive word-of-mouth from satisfied customers assist organizations to lower the costs associated with attracting new customers, not mentioning that it enhances the firm’s overall image and reputation (Anderson et al., 1997).
Anderson, E.W., Fornell, C., & Rust, R.T. (1997). Customer satisfaction, productivity, and profitability: Differences between goods and services. Marketing Science, 16(2), 129-145.
Paul, M., Hennig-Thurau, T., Gremler, D.D., Gwinner, K.P., & Wiertz, C. (2009). Toward a theory of repeat purchase drivers for consumer services. Journal of the Academy of Marketing Science, 37(2), 215-237.
Tutor2U. (2012). Buyer behavior – The decision-making process.
Wang, I.M., & Shieh, C.J. (2006). The relationship between service quality and customer satisfaction: The example of CJCU Library. Journal of Information & Optimization Sciences, 27(1), 193-209.