Dynamics Of Emotion-driven Loyalty: The Prospect Theory Approach

In dealing with consumers, every enterprise hopes for long-term retationships of its consumers. However, in the process of "cultivating feelings" with the consumers (such as consecutive service experiences), they would found herself face to awkward situation:on the one hand, it is "mission impossble" for avoiding service failure. On the other hand, the consumer's reaction is unfathomable. So, in consecutive service experiences, how is the consumer's reaction affected? Besides doing service well, whether through other means to make up the consequences of service failure? The former is concerned for the natural theory of dynamic study of continuous transaction. The latter is important in practice, and is also the hotspot of decision-making and behavioral research.Around this point, this paper study the question follows:(1) according to the existing research, can develop the describe model of the consumers WTP in the consecutive service experiences? (2) What are the characteristics of consumers anticipated emotion, anticipatory emotion and WTP in consecutive service experiences? (3) According to the model above, How Priming alters consumers WTP during Consecutive Service Experiences? (4) How time interval alters Framing Effect during Consecutive Service Experiences?Firstly, we study of existing consumer emotions, consumer satisfaction and loyalty's research. Based on the common conclusion of consumer emotion influencing on consumer loyalty, combining the existing theoretical framework of prospect theory, borrowing the idea from Looms(1982) to introduce anticipated emotions as a reference point, we has introduced the emotion reactions into the framework, and developed a theoretical framework that described the relationship of emotion and consumer loyalty. Due to the consumer's reference point being influenced by the last experience (Boulding et al.1993), this model simulated the variation tendency of consumer loyalty in the continuous multiple transactions scenario, and provided some basic proposition.Then, we integrated the theoretical model in chapter 3, and studied the WTP in the opposite service scenario, such as the success-failure service scenario and the failure-success service scenario. Because the existing research had verified the variation tendency in this two kinds of situations, this study does not studied the pure variation tendency in this two situations. But tried to find the effect factor in common situations, and to analyze the variation tendency of whether these factors altered the tendency. The result would increase the scalability and applicability of the theoretical model in reality.Based on the above, we discussed the consumer's WTP variation tendency when existed priming between two service scenarios in chapter 4. It was found that consumers WTP has tended to the condition of the first service scenario in no-priming group, and consumers WTP has tended to the condition of the last service scenario in priming group, so is the emotion tendency. In no-priming group, the result could be explain by counterfactual thinking. In priming group, the result could be explained by the heuristic thinking such as "how is the recent service?"In the fifth chapter we discussed the customers'purchasing willingness which was influenced by time intervals of different position. In this study, we should learn from the initial effect paradigms and recent effect paradigms (Asch 1946; Haugtvedt and Wagener 1994) to test the customers'emotional reactions and WTP in success-failure scenario or failure-success scenario in the extra cognitive load condition. Results show that, in the initial effects experimental paradigms, customers'WTP had no significant difference with controlled group in first success and then failure situation, but lower than controlled group in first failure and then success situation. In recency effect experimental paradigms, customers'WTP lower than controlled group in first success and then failure situation, but higher than controlled group in failure-success scenario.And in the anticipated emotion condition, participants tend to think of the "recent service" as the simple heuristic, thus make the initial effect paradigms failure, and the recency effect paradigm significant. In the anticipatory emotion condition, participants tend to be judged by systematic thinking, thus make recency effect paradigm failure. It is noteworthy that anticipatory emotion arouses the consideration of uncertainty. Participants in the initial effect paradigm appear the tendency that inclined to judge with the first service scenario, which is similar to "the counterfactual thinking". The counterfactual thinking, mostly because of the information mentioned another possibility, thus results in individual initiative considerate alternative results (Galinsky and Moskowitz,2000). We concluded that, it is due to the service experience opposite. Because of the two consecutive service is independent and opposite, so the later events is more possible than the former events triggered the counterfactual thinking (Miller and Gunasegaram 1990). Thus, participants considerate the recent service experience more weights.Finally, in order to lay the foundation for the further chronological research, we use the photographic slides and videotapes in simulating the service setting (DuJianGang and FanXiuCheng 2007). In this chapter, we focus on the three service scenario, and verify the customer purchase intention changing mechanism. The result found:customer purchase intention's changing tendency in the successful services is larger than in the failing services. The customer purchase intention's changing tendency in the successful services is diminishing marginal utility. The changing tendency in the former success service is larger than the later success service. The customer purchase intention's changing tendency in the failing services is increasing marginal utility. The changing tendency in the former failing services is littler than the later failing service.The research on the last chapter has summarized the study results, and put forward some suggestions for enterprise. At the same time, because of the restrictions of sample and experimental conditions, we also put forward the lack of this research and the direction of future research.