Consumer Behavior Assignments

CASE

Chapter 13 Case

ATccrecihavoele r rdtneoiusntueag ll ti tnvso, a 2 ilet0u Bh0eaa 6oyd, f’s u aa prple l pnpseruooacrxtcr ileyoms f3s aif3ttuse% ll 2ya f0 ur$0oc66tm ibfio i2nnll0aiso 0nn5- .i n was a record $52 billion. eBay has grown faster than any other company in history, including Microsoft, Dell, and Walmart. Some 72 million active users bought and sold merchandise on eBay in 2005, and this number increased to 82 million in 2006, an increase of nearly 14% in one year. If eBay was a brick-and-mortar retailer, rather than the world’s largest on-line marketplace, it would be larger than Best Buy and Lowe’s.

Consumers are increasingly discovering the value of utilizing eBay to obtain items more inexpensively, more conveniently,

and

so on. As the economy continues to be in a state of flux and

consumers are uncertain about such things as gas prices and future of interest rates, they will likely continue to turn to the

eBay as an alternative means of obtaining the items they seek. Consumers purchase anything from clothing to automobiles eBay. In fact, they are shopping for more than 100 million on items that are available for sale on eBay every day. With such numbers in an e-tailing environment, customer satisfaction is a major concern for eBay. Finding ways to both assess customer satisfaction and deal with customer dissatisfaction is an ongoing problem for the company.

One tool eBay has established is a rating system. The rating system operates by each party of a transaction (buyer and seller) rating each other. Most eBay participants rate soon after the transaction is completed. For example, a buyer will normally rate the seller as soon as the purchased item is received and a cursory examination is accomplished to ensure the item is as described in the eBay auction. The seller, then, upon receiving the feedback from the buyer, knows the item arrived at its destination and considers the transaction to be complete, so he or she then rates the buyer. The parts of the consumption process that are evaluated in these ratings are whether the buyer pays for the item soon after winning the auction, whether the seller ships the item in a timely manner and adequately protects the item in the shipping process, and whether the product is as represented, usually after only a quick and not in-depth examination.

This rating, or “feedback,” system is really just a tool for buyers and sellers to help them determine whether or not to trust the other participant before engaging in a transaction. eBay has the opportunity to use the information generated by this feedback system; however, it is common knowledge among eBay users that the feedback is grossly inflated. In order to avoid negative ratings from others, both buyers and sellers often give only positive feedback, even though the transaction did not go well.

Many consumers like to shop for a product. Shopping may include visiting several stores, trying out the product, trying on clothing, and socializing with shopping partners. The consumption situation and experience are important determinants of consumer satisfaction, and many of these shopping consumers are seeking the specific situation and experiences that shopping can bring. When consumers shop on eBay, however, the shopping experience is totally different. The possibility of trying on clothing, for example, is completely nonexistent. Rarely do eBay shoppers socialize with shopping partners while finding and bidding on eBay items. Because of these factors, eBay focuses on making this online shopping experience as positive as possible.

Despite these efforts, eBay’s ACSI is only a B2, and it decreased in the last year. Look at the table for details. In fact, according to the ACSI, customer satisfaction was the same in 2006 for eBay as it was in 2000. Part of the reason for less-than-satisfactory customer satisfaction may be due to the fact that consumers cannot see and inspect the product before purchasing it. Most sellers provide pictures of the products they are selling, but the quality of these pictures varies, and the possibility of consumer prepurchase actions, such as trying on shoes and clothing, just cannot be provided. Thus, consumers face a greater risk getting something different than expected.

262 PART 5 : CONSUMPTION AND BEYOND

Company Name

Amazon.com

Expedia, Inc.

			ACSI SCORES	SCORES BY YEAR
2000	2001	2002	2003	2004	2005	2006
84	84	88	88	84	87	87
eBay Inc. 80	82	82	84	80	81	80
E*TRADE 66	66	69	71	70	71	74
NA	NA	80	78	76	79	78

Google Inc. uBid.com Yahoo! Inc.

NA 67 74

NA 69 73

80 70 76

Questions

1. Does eBay assess the entire consumption process of its consumers? Why or why not? Suggest different methods for assessing consumer satisfaction that may be useful in eBay’s case.
2. How does the consumption situation differ between eBay consumers and consumers at brick-and-mortar retailers?
3. How much did the ACSI score for eBay change from 2005 to
   1. by percentage? What is the significance of these scores and changes, as compared to other large Internet companies represented in the table?

82 73 78

82 73 78

82 73 80

81 74 76

1. Use the website for the ACSI scores (www.theacsi.org), to find out how the scores for eBay compare with brick-and- mortar retailers, such as Kohl’s, J.C. Penney, Target, Dillard’s, Macy’s, Nordstrom, and Walmart. Explain your findings.
2. According to the expectancy/disconfirmation theory, what could be one of the problems eBay faces in attempting to increase its consumer satisfaction?

CHAPTER 13: CONSUMPTION TO SAT ISFACT ION

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