Consequences of consumer confusion


As stated in my earlier post ‘antecedents to consumer confusion‘, I shall focus on consequences of consumer confusion in this post. The earlier post focused on three important antecedents to consumer confusion namely; expectations, attribute confusion and information confusion in the context of financial services industry (i.e. banks, insurance. credit card, mortgage and other such investment firms).

In this post I will focus on three consequences of consumer confusion: (1) attribute satisfaction; (b) information satisfaction and (c) overall satisfaction.

consumer confusion

Using quantitative methodology and established scales in the fields of psychology and consumer behaviour, we empirically tested the antecedents and consequences of consumer confusion. The findings suggest that expectations, attribute confusion and information confusion significantly affect overall confusion.

Furthermore, we also found that attribute confusion significantly affects attribute and information satisfaction however expectations do not. It was observed that information confusion significantly affected information satisfaction but did not affect attribute satisfaction. We also found the significant impact of overall confusion; attribute satisfaction and information satisfaction on purchase decision. Our results concur with the earlier research, that consumer confusion is a multi-dimensional phenomenon with significant impact on behavioural intentions. There are several theoretical and managerial implications from the above findings.

Increasing understanding of consumers and decreasing confusion is one of the major aims of any organization. Moreover, in markets like financial services, where many similarities of expectations, attributes and information exist within consumer minds, reduction in consumer confusion can become a source of competitive advantage. The framework for this study provides managers first hand idea of where and how consumer confusion is caused. This will assist managers in optimizing their organizational resources to manage the multi-faceted phenomenon of consumer confusion. Managers treating consumer confusion as a single tier construct may receive undesirable results. For example, just improving the product or service feature may reduce attribute confusion. However, poor communication and highly raised expectations may still elevate the overall confusion. Similarly, a good communication campaign with a less differentiated product or service may also elevate confusion in consumers’ minds.

The findings indicate that information confusion has an impact on information satisfaction and which in turn, has a strong influence on purchase decision. In the context of financial services industry, this issue merits consideration particularly where consumers are faced with wide ranging technical and complex information on the financial products which can create implications for purchase decision.

Managers can also use the study instrument in developing competitive intelligence by comparing the confusion caused by theirs as well as competitors’ products or services. This, we believe will yield rich managerial insights for firms and develop a better and unique campaign in comparison to competitors. The findings highlight the importance of prior expectations in causing confusion. This means that if the company communicates itself via advertisements and other means as a single entity and does not act like one in real-life, there are increased chances that it will make the consumers feel confused. The companies will have to simplify their offer to attract consumers. This is also reflected in the phenomena of attribute and information confusion. To avoid attribute and information confusion, managers will have to differentiate their product and simplify their communication to the consumers. While this might not be easy especially because of the legal requirements associated with FSI products, it is highly desirable.

The impact of confusion on satisfaction and purchase decision also needs further attention. It was observed that expectations did not affect the attribute or information satisfaction. This suggests that consumers do not see their expectations to be affecting their satisfaction, which is contradictory to earlier research in the area. Moreover, the significant impact of attribute confusion on attribute and information satisfaction indicates that the tangible and intangible aspects associated with the service have significant impact on consumer engagement with the service. This requires much close scrutiny by managers as there is little differentiation observed in FSIs with regard to attribute differentiation. If in further studies, this is found to be the case, then managers need serious reconsideration with regards to their branding, positioning and differentiation efforts. The significant impact of attribute confusion on attribute and information satisfaction concurs with earlier studies which focused on technology products. This suggests that the impact of confusion on satisfaction is not just industry specific. Therefore, managers could use our study dimensions to check the impact of confusion within other industries.

The findings also reveal the significant impact of information confusion on information satisfaction. However the impact is non-significant in the case of attribute satisfaction. Therefore, we suggest the use of attribute and information satisfaction as separate constructs in future studies rather than using overall satisfaction as a single construct. Furthermore, the study findings also highlight the complexity of relationship between the constructs. Managers should ensure that they treat these constructs as stand-alone rather than assuming a causal relationship.

Paurav Shukla, Madhumita Banerjee, Phani Tej Adidam (2010), “Consumer Confusion in the Financial Services Industry: Antecedents and Consequences”, in Advances in Consumer Research Volume 37, eds. Margaret C. Campbell and Jeff Inman and Rik Pieters, Duluth, MN : Association for Consumer Research.

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23 Comments to “ Consequences of consumer confusion”

  1. […] original here: Consequences of consumer confusion If you enjoyed this article, please consider sharing it! Tagged with: adidam • […]

  2. Vishal says :

    Very relevant observations. In my opinion, these findings are really relevant for financial institutions in today’s environment. With the similarities of offers across the board, companies really need to think about the impact of confusion.

  3. Social comments and analytics for this post…

    This post was mentioned on Twitter by paurav: RT @paurav Consequences of consumer confusion | Paurav Shukla

  4. Olga Piece says :

    What an excellent blog, I’ve added your feed to my RSS reader. 🙂 Please provide more such resources. Thanks again.

  5. Lee Lamberts says :

    Enjoyed reading your findings. It was intriguing to find that a product and information are seen in different light by consumers. What reason do you think is behind this?

  6. Harry Carver says :

    I am definitely bookmarking your site. Really great articles. Do you recommend any other readings with regard to consumer confusion?

  7. Warner Scanlan says :

    Awesome post! You have a great blog, absolutely the best Ive read so far. I will be looking forward to your next entry. Thanks again.

  8. Really interesting post. I guess the confusion focus should be extended further to loyalty instead of limiting it to satisfaction. How will behavioural and attitudinal loyalty be affected by confusion.

  9. Shan Ontani says :

    Yes. The aspect on extending the effects on confusion to loyalty would be interesting. Though, I think the link would be too hard to establish as the construct seem too distant from each other.

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  11. Freda says :

    I was just looking at related blog posts for my project research and I happened to stumble upon yours. Thanks for the practical material! The idea of confusion is so interesting. Not just for financial industry but in every domain of life. I guess we need to broaden the scope of confusion in other areas rather than limiting it to just one industry.

  12. Stefania Gold says :

    I agree with Shan that the link to loyalty will be too far fetched. Though, it may have an impact on confusion because it is the confusion which makes us think if we wish it to buy something again or not?

  13. Shan Ontani says :

    Exactly my thoughts Stefania. I believe confusion will have a direct impact on repeat purchase which has a lot to do with loyalty. However, making consumer remember about how they were confused and how that had had an impact on loyalty would be tooooo difficult.

  14. Rainy says :

    thank you for this information. I often read here…

  15. James Craig says :

    This is a great start reading for me, Should acknowledge you will be one of the best bloggers I ever observed writing on marketing of financial services. The issue of confusion is so pertinent. Thank you for post this information.

  16. Lewis Rubio says :

    Hey, I read all your posts, keep them coming. These two posts on consumer confusion are just awesome. Great research.

  17. Download music says :

    We are a group of volunteers and starting a new initiative in our community. Your site provided us with valuable information to help us get started|.You have done an impressive job and in turn provided us a way to not confuse our users from the start…:P We hope we will get there.

  18. Suadi says :

    I need a definition of attribute satisfaction and the real source of the definition. I really need it to complete my script. Thank’s for your attention.

  19. Dr. Paurav Shukla says :

    You shall be able to find it in the following paper:

    Spreng, R. A., MacKenzie, S. B., & Olshavsky, R. W. (1996). A Reexamination of the Determinants of Consumer Satisfaction. Journal of Marketing, 60(3), 15-32.

  20. Mika says :

    How can one set up services so the confusion can be reduced? Is there consumer service available if I need help setting this up?

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