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Article
Publication date: 13 February 2017

Sangyoon Yi and Jae-Hyeon Ahn

Consumer expectation not only influences purchase decision but also post-purchase satisfaction and word-of-mouth (WOM). This study aims to develop theories of initial expectation

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Abstract

Purpose

Consumer expectation not only influences purchase decision but also post-purchase satisfaction and word-of-mouth (WOM). This study aims to develop theories of initial expectation management by suggesting when it is desirable for new products to raise or lower consumer expectations. It systematically examines the interplay of product value and consumer heterogeneity in the dynamic process of new product diffusion under competition.

Design/methodology/approach

Drawing on traditional diffusion and choice models, this study develops an agent-based model to formalize and analyze how consumers’ initial expectations of a new product influence the interdependent processes of product sales, consumer satisfaction and WOM. The simulation analyses in controlled settings help understand the underlying mechanisms in a stepwise manner.

Findings

The results show that, although the optimal strategy for low-value products is to induce consumer expectations higher than product value, high-value products are better introduced with expectations formed close to it. The results also highlight an important drawback of “under-promising” strategies in reducing the base and volume of WOM. Further, the analysis illustrates how consumer heterogeneities in product valuation and initial expectation affect the effectiveness of expectation management. For high-value products, both heterogeneities reduce the effectiveness of the optimal strategy. For low-value products, however, value heterogeneity enhances the effectiveness, whereas expectation heterogeneity reduces it.

Practical implications

Firms introducing new products should be sensitive to how consumers value the product and form expectations about it. Different from firms that must rely on aggressive advertising to sell inferior products by building up high expectations, those with superior products can rely more on the power of consumer WOM, which is much less costly and thus gives them a competitive advantage. Firms should also pay attention to how diversified the consumers are in product valuation and expectation. The expectation management strategy is more effective when consumers form more similar expectations. Inferior firms may leverage this mechanism to neutralize their disadvantages.

Originality/value

The articulated mechanisms help push forward the research on new product diffusion and consumer expectation management. To the best of the authors’ knowledge, this is one of the first studies to systematically analyze the impact of consumer heterogeneity on the effectiveness of expectation management.

Details

European Journal of Marketing, vol. 51 no. 1
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 20 August 2021

Mir Dost, Syed Mir Muhammad Shah and Irfan Saleem

The purpose of this study is to investigate the influence of mentor expectations on nascent entrepreneur’s venture creation and how this relationship strengthens/weakens when…

Abstract

Purpose

The purpose of this study is to investigate the influence of mentor expectations on nascent entrepreneur’s venture creation and how this relationship strengthens/weakens when mediated by the sense of nothing to lose and entrepreneurial resilience.

Design/methodology/approach

The author nested the data from mentors and protégé entrepreneurs by using a questionnaire survey. Mentors were those individuals who were established entrepreneurs and involved in training to protégé entrepreneurs. Protégé entrepreneurs were those who were part of the cohorts in incubation centers for training and startup training.

Findings

Data revealed that it was unlikely to create a new venture when mentors displayed low expectations in protégé entrepreneurs. However, this relationship was positively mediated by the sense of nothing to lose and entrepreneurial resilience.

Practical implications

The findings have important implications on how mentor expectations can hinder protégé entrepreneurs’ venture creation and how it turns around when entrepreneurs display the ability of nothing to lose and resilience.

Originality/value

Mentorship from other experienced individuals has become essential to entrepreneurs and their fledgling ventures. Although there is an acknowledgment that mentoring improves an entrepreneur’s likelihood of success in a new venture, yet far too little the authors know about the degree of expectations in mentor-mentee relationships and new venture creation. This research connects those pieces of the puzzle and fills the gap.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 14 no. 6
Type: Research Article
ISSN: 2053-4604

Keywords

Article
Publication date: 24 July 2009

Satyabhusan Dash, Ed Bruning and Manaswini Acharya

The purpose of this paper is to investigate the relationship between Canadian and Indian consumers' national cultural orientations and banking service quality expectations. Using…

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Abstract

Purpose

The purpose of this paper is to investigate the relationship between Canadian and Indian consumers' national cultural orientations and banking service quality expectations. Using two of Hofstede's five cultural dimensions operationalized at the individual level, and five dimensions of service quality from Parasuraman et al.'s SERVQUAL scale, the aim is to develop and test hypotheses relating national culture values to service quality expectations.

Design/methodology/approach

The study is quantitative in nature, using surveys (online and written) from respondents in Canada and India. Data were analyzed using dummy variable regression and structural equation modeling.

Findings

The results show that the importance of various SERVQUAL dimensions is related to Hofstede's power distance and individualism cultural dimensions both at the individual and national levels. More specifically, consumers low on power distance expect highly responsive and reliable service. High power distance customers attach higher importance to tangible service attributes. Consumers high on individualism expect lower empathy and assurance from service providers. Furthermore, Indian consumers attach higher importance to tangible attributes, whereas Canadian consumers find service reliability more important. However, differences in overall service quality expectations are not significantly different across the two countries.

Practical implications

The results suggest that managers must be aware of the cultural values of the buyer/client in order to fully understand the most effective means of establishing and nurturing the service delivery process and, consequently, establishing service quality expectations. Banks will be more successful when service delivery is in tune with cultural imperatives, particularly sub‐group cultural imperatives.

Originality/value

The study provides an original insight into the manner in which national culture impacts on service quality expectations. Furthermore, the study identifies individual sub‐cultural influences that shape service quality expectations.

Details

International Journal of Bank Marketing, vol. 27 no. 5
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 14 November 2022

Bora Min

This study aims to draw on the malleable nature of processing fluency to identify the role of consumer expectation in generating diverging effects of metacognitive experiences on…

Abstract

Purpose

This study aims to draw on the malleable nature of processing fluency to identify the role of consumer expectation in generating diverging effects of metacognitive experiences on perception of product innovativeness and product evaluation. It also examines critical boundary conditions to offer a more sophisticated understanding of the interactive effect of expectation and processing fluency.

Design/methodology/approach

Studies 1, 2A and 2B recruited 1,922 online participants, and Studies 3 and 4 recruited 644 college students. The authors manipulated product innovativeness expectation by exposing participants to expert reviews of new products, and processing fluency by presenting product detail in either easy-to-read font/color contrast or difficult-to-read font/color contrast. Subsequently, perceived product innovativeness and product evaluation including actual product adoption were measured.

Findings

When a product was expected to be innovative (ordinary), feelings of difficulty with processing its detail increased (decreased) perceived innovativeness and, in turn, interest in purchase. The observation occurred only when a credible external source (vs firms) generated the innovativeness expectation or consumers’ elaboration level was not high. Furthermore, when innovativeness became associated with negative implications, perceived innovativeness no longer enhanced but impaired purchase intention.

Research limitations/implications

Studies used incrementally new products only. Really new products involving a high adoption risk might produce a diverging effect. The findings need to be replicated with higher involvement products. An ideal level of difficulty with comprehending product information was not examined in the present research.

Practical implications

Results carry significant weight for firms who seek to draw consumer attention to their new products by choosing an optimal format of product presentation. The findings suggest that they can proactively administer a proper level of ease/difficulty with comprehending product detail depending on the extent of product innovativeness and target audience.

Originality/value

Extant research has not addressed how the malleable nature of processing fluency systematically affects innovativeness perception and product evaluation. The key contribution of this paper to the metacognition literature is the role of consumer expectation that alters the meaning of metacognitive experiences in relation to innovativeness perception. In addition, this is one of the first to empirically investigate perceptual processing fluency in the elaboration likelihood model theory.

Details

European Journal of Marketing, vol. 57 no. 1
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 20 March 2007

Jochen Wirtz, Anna S. Mattila and Rachel L.P. Tan

It is widely accepted that consumers enter into a service consumption experience with a set of expectations, including affective expectations. This research aims to investigate…

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Abstract

Purpose

It is widely accepted that consumers enter into a service consumption experience with a set of expectations, including affective expectations. This research aims to investigate the matching effects between arousal‐level expectations and perceived stimulation (i.e. arousal congruency) on satisfaction and in‐store behaviors.

Design/methodology/approach

A 3 (under‐stimulation, arousal congruency and under‐stimulation) perceived arousal congruency)×2 valence (pleasant or unpleasant environment) factorial design was employed and tested across two service settings, a music store and a book store. A short narrative was used to induce arousal level expectations (high and low). Subjects were then exposed to a video clip in which the actual arousal of the store environment was manipulated at three levels (high, moderate, low). Consequently, subjects could perceive the store environment to match their expectations (arousal congruency), exceed their expectations (over‐stimulation) or to fall short of their expectations (under‐stimulation). Half of the video clips showed a pleasant store environment, whereas the other half of the videos involved an unpleasant store environment. Satisfaction and in‐store behaviors served as the two dependent variables in this study.

Findings

The results of this study indicate that the valence of the service environment (pleasant or unpleasant) moderates the arousal‐congruency effect on satisfaction and in‐store behaviors. Satisfaction in pleasant service environments was maximized at arousal congruency, while such matching effects failed to influence satisfaction in unpleasant settings. For in‐store approach behaviors, perceived under‐stimulation, compared with over‐stimulation, had a positive effect on in‐store behaviors.

Practical implications

The findings of this study indicate that retailers need to pay attention not only to the pleasantness of the store environment, but also to arousal level expectations regarding the servicescape.

Originality/value

This paper posits a hitherto neglected theory that affective expectations, which reflect people's expectations about how they expect to feel in a given situation, might be equally important in influencing customer responses in a service setting.

Details

International Journal of Service Industry Management, vol. 18 no. 1
Type: Research Article
ISSN: 0956-4233

Keywords

Article
Publication date: 12 October 2021

Yoshie Saito

The survival rate of newly listed firms is low, and there is evidence of a surge of poorly performing new listed firms leading up to the crash of the dot.com bubble. The author…

Abstract

Purpose

The survival rate of newly listed firms is low, and there is evidence of a surge of poorly performing new listed firms leading up to the crash of the dot.com bubble. The author investigates this phenomenon and analyzes investors' ability to understand the quality of accounting information and to adjust their expectations.

Design/methodology/approach

The author employs the dividend discount model in conjunction with clean surplus accounting discussed by Ohlson (1995) to compare the value relevance of earnings and research and development (R&D) expenditures for short and longer listed National Association of Security Dealer Automated Quotations (NASDAQ) firms between 1980 and 2014. The author also uses univariate tests and logistic regression to analyze both recently listed and short-listed firms. In this analysis, the author compares the differences in investors' expectations for the first five years for both types of firms.

Findings

The author provides convincing evidence that markets clearly placed lower valuation weights on accounting earnings and R&D expenditures for short-listed firms on NASDAQ. Market participants originally had high expectations for these ventures. But, they gradually understood the lower quality of accounting information and adjusted their expectations downward.

Originality/value

The author’s results show that optimistic expectations along with easy equity financing created a surge of new listings. My analysis of the interplay between the quality of accounting information and investors' expectations indicates a negative spillover effect where investors are overoptimistic about firms that rode on waves of new listings backed by liberal financing. The author shows that analysis of Tobin's Q and negative earnings can separate ill-prepared from longer-listed firms.

Details

International Journal of Managerial Finance, vol. 18 no. 5
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 1 March 1995

Kenneth E. Clow and John L. Beisel

Service firms operating on low margins per transaction mustgenerate a high volume of business to survive the competitiveenvironment of the 1990s. Firms must raise the expectations

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Abstract

Service firms operating on low margins per transaction must generate a high volume of business to survive the competitive environment of the 1990s. Firms must raise the expectations of consumers to increase patronage, then successfully meet these expectations. Examines the antecedents to consumer expectations of low‐margin, highvolume service firms, and gives managerial implications, illustrating how to manage a service firm, successfully operating on low margins successfully.

Article
Publication date: 25 June 2021

John E. Grable and Eun Jin Kwak

Using data obtained from 525 individuals who were surveyed during early spring 2020, this study addressed three aims: (1) to ascertain the degree to which disappointment aversion…

Abstract

Purpose

Using data obtained from 525 individuals who were surveyed during early spring 2020, this study addressed three aims: (1) to ascertain the degree to which disappointment aversion and expectation proclivity are related; (2) to identify who is most likely to exhibit patterns of disappointment aversion; and (3) to determine to what extent the combination of disappointment aversion and expectation proclivity is associated with financial risk aversion.

Design/methodology/approach

Several analytic methods were used in this study. Descriptive statistics were calculated for each of the measures examined in this study. Correlation, analysis of variance (ANOVA) and regression techniques were used to estimate associations between and among the variables of interest in this study.

Findings

A negative relationship between disappointment aversion and expectation proclivity was noted, which is counter to conventional thinking. It is traditionally thought that those who establish high expectations will experience the greatest disappointment when choice outcomes fall below expectations. In this study, it was determined that when a financial decision-maker consistently establishes high outcome expectations and results fall below expectations, the financial decision-maker feels less disappointment. More precisely, those who consistently establish high expectations tend to be more disappointment tolerant than others.

Research limitations/implications

This paper provides evidence that categories of disappointment aversion and expectation proclivity are associated with financial risk aversion and certain demographic characteristics.

Practical implications

This paper adds support for assertions made in the International Journal of Bank Marketing (IJBM) that it is important for financial service professionals and bankers to manage customer expectations to reduce disappointment with products and services. This paper shows that combinations of disappointment aversion and expectation proclivity are related to the financial risk aversion of customers.

Social implications

Findings from this paper indicate that a commonly used heuristic that decision-makers should reduce expectations to avoid disappointment may not be accurate or particularly useful in the context of financial decision-making.

Originality/value

Findings from this study add to the existing body of literature by showing that aversion to disappointment and the establishment of expectations, while distinct concepts, are interrelated.

Details

International Journal of Bank Marketing, vol. 39 no. 7
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 1 May 2004

Peter Raven and Dianne H.B. Welsh

The Middle East is a growing and lucrative marketplace. This exploratory study examines retail service in Kuwait and Lebanon, regions with long histories of trade. Retail service…

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Abstract

The Middle East is a growing and lucrative marketplace. This exploratory study examines retail service in Kuwait and Lebanon, regions with long histories of trade. Retail service, however, has not been well documented in this region. As far as is known, this is the first study that examines customer and salespeople perceptions of service encounters in these countries in light of their culture, religion, and nationalities. As retailers expand into new markets worldwide, such information is vital to their success. Future research directions are discussed.

Details

Journal of Services Marketing, vol. 18 no. 3
Type: Research Article
ISSN: 0887-6045

Keywords

Article
Publication date: 6 March 2023

Laura Grazzini, Giampaolo Viglia and Daniel Nunan

There is growing interest in the use of human-like social robots, able to undertake complex tasks whilst building consumer engagement. However, further exploration is needed on…

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Abstract

Purpose

There is growing interest in the use of human-like social robots, able to undertake complex tasks whilst building consumer engagement. However, further exploration is needed on the optimal level of humanoid appearance for service robots. In particular, the literature is limited with respect to mitigating disconfirmed expectations for robots high in human-likeness. This paper aims to address this gap by testing the effect of robot appearance, disconfirmed expectations and warmth (vs competence) on customers’ responses.

Design/methodology/approach

The study adopts a mixed-method design by presenting a focus group (Study 1) that guides two laboratory experiments (Studies 2 and 3). Studies 2 and 3 test for the moderating effect of warmth (vs competence) and the mediating roles of perceived eeriness and disconfirmed expectations.

Findings

The findings show that a robot high (vs low) in human-likeness leads to higher negative customers’ responses, which is explained by disconfirmed expectations rather than perceived eeriness. However, when customers interact with a warm (vs competent) robot high in human-likeness, this negative effect vanishes.

Research limitations/implications

The paper investigates boundary conditions and underlying mechanisms that affect customers’ experiences. Although the study adopts high realistic experiments, a limitation lies in not measuring customers’ actual behaviours in the field.

Practical implications

This study provides new insights on how the appearance and characteristics of social robots influence the consumers’ experience. By doing so, this study offers managers actionable insights (i.e. enhancing warmth) to lessen the risk of disconfirmed expectations.

Originality/value

The paper offers new explanations as to why human-like robots can generate negative responses from customers. Moving beyond the “uncanny valley” hypothesis, this study shows the key role of disconfirmed expectations in explaining consumers’ negative responses towards humanoid robots. Moreover, it sheds light on the moderating role of warmth (vs competence), which can mitigate such negative effects.

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