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Marketing scholars have argued that firms should meet or exceed customer expectations in order to achieve customer satisfaction. Often, however, customer expectations maybe unjustified, infeasible, or unproductive to meet. These need to be shaped rather than fulfilled. The authors identify three broad approaches to the shaping of customer expectations: human resource management, framing, and compliance. These are described along with the type of expectation shaping tasks for which each is appropriate and illustrations of marketing mix tools which implement them.

During a busy lunch hour, the wait at the drive-in window of a fast-food restaurant was irritating a lot of customers. The similar wait was causing no unusual reaction among the walk-in or dine-in customers. The difference is attributable to the assumption, inadvertently made by drive-in customers, that the drive-in service is designed for speed—it is not. The management needs to educate its customers about the true attribute of the drive-in service that it is designed for convenience, not speed.

False expectations lead to dissatisfied customers and can seriously impact a firm’s profitability. In one study of 348 “critical incidents” in which hotel, restaurant, and airline employees recalled difficult and uncomfortable communications with customers, fully 75% of these incidents could be attributed to the fact that customer expectations exceeded the ability of the service system to perform—the other 25% were due to objectively shoddy service (Nyquist, Bitner, and Booms, 1985). Given the high costs of expectation failure, it is important for a firm to ensure that its customers hold realistic expectations about its products and services. The purpose of this paper is to identify the strategies for managing diverse customer expectations, specially the strategies to shape them where necessary. Figure 1 gives a bird’s eyeview of these strategies, which are discussed below.

Managing Expectations: Accommodation, Alteration, or Abandonment

Businesses have two possible avenues to managing customer expectations: (i) accommodating the expectations, and (ii) altering (i.e., shaping) them. Of course, when either approach fails, a third option exists, namely to abandon the customer. Both accommodation and alteration approaches are utilized by business firms; in the academic literature, however, the alteration approach has not received much systematic attention. Before turning to an exposition of the alteration option, the focus of this paper, we briefly describe the accommodation option.

Figure 1. Managing customer expectations: A schematic‘

Fig 1

Accommodation

Accommodating (i.e., fulfilling) expectations has been a major goal of marketing for many decades now; indeed the discipline is defined as satisfying customer needs/wants (Kotler, 1994; Levitt, 1960). The accommodation response has generally taken three forms: (i) Product or service innovations, (ii) Segmentation, niching, and positioning; and (iii) TQM, quality, and customer satisfaction movement. (See Figure l.) Product/service innovations have been a primary means to meeting or exceeding the rising expectations of consumers (Kotler, 1994). In the last 50 years, product choices available to consumers have burgeoned manifold, and technological breakthroughs have brought forth products unthinkable only ten years ago (e.g., laser surgery, cordless and video phones, palm-top computers, hair transplant, etc.)

Segmentation has been the second accommodation mechanism, particularly useful when needs, wants, and expectations increase in diversity across consumers. Target marketing and niching allow firms to exploit market segments most suited to their skills and resources, and to in turn meet market needs in a more tailored fashion (Sheth, 1990; Webster, 1992).

TQM, continuous quality improvement and other quality-enhancement and customer satisfaction programs have recently become the major initiatives in American as well as global businesses (Business Week, 1987; Hauser and Clausing, 1988; Hellman, 1989). The clarion call of satisfaction/quality writers and consultants has been for organizations to endeavor to “meet or exceed customer expectations” (Parasuraman et al., 1985, 1989, 1994; Zeithaml et al., 1988). This has been a useful direction for the field, operationalizing one of marketing’s core properties—customer orientation, and its overarching goal—customer need satisfaction.

The Costs of Accommodation

Clearly, the three accommodation approaches are useful up to a point. Each has its costs and/or limitations, however. Product and service innovations (a) cannot address expectations in all domains (e.g., airbags that won’t bruise the driver’s face), or (b) may require long lead-times to actualize (e.g., cars needing no oil change), leaving, in the interim, expectation molding still a task that needs to be done. Moreover, innovations that respond to one set of expectations may make new demands on customers, requiring the inculcation of a new set of expectations. Illustratively, more sophisticated, digitized VCRs meet customer expectations or desires for high fidelity picture quality, but they also require greater customer caution against feeding low grade tapes.

Segmentation too has at least two limitations. First, segmentation might be infeasible or disallowed for public services such as utilities, mail delivery, and police protection (Rothschild, 1979). And, second, finite segments, even if defined narrowly, still entail substantial intra-segmcnt expectation variations which need to be altered rather than accommodated.

Finally, quality and satisfaction enhancement efforts also are governed by pragmatics of technical and economic viability. Airlines cannot entirely eliminate flight delays or overbooked flights, stores cannot entirely ensure short checkout lines, and low price offerings cannot offer the amenities of full-service offerings some customers inadvertently assume and come to expect. Increasingly, marketers are questioning a runaway obsession with quality improvement to satisfy customer expectations without regard to bottom-line impact of quality efforts (Rust, Zahoric, and Keiningham, 1994). The best known divorce of quality upgrade and bottom-line outcome is the case of Wallace Company, a 1990 winner of the Malcolm Baldrige National Quality Award, which was forced, by soaring quality costs unmatched by revenue gains, to file for Chapter 11 two years later. The new-found quality conservatism now guides and restrains the quality initiatives of such market leaders as AT&T, UPS, Federal Express, and GTE (Business Week, 1994).

The Need for Altering the Customer Expectations

Clearly, many market offerings need enhancement (by product innovations, by segment specific customization, or by quality improvements) so as to meet or exceed customer expectations. Indeed, we cannot overemphasize the first requisite for firms to attempt to accommodate as many of customers’ expectations as economically feasible. However, many expectations are infeasible or costly to accommodate, and instead require altering.

One way to sort out expectations that require altering is to plot them in relation to what a firm can realistically deliver. In any industry, customer expectations can be found to vary widely .These varying expectations may range from unrealistically high to unrealistically low. Expectations in close vicinity to a firm’s actual performance are deemed ‘realistic’- these fall in the ‘Zone of accommodation’.

Figure 2. The three shaping approaches and corresponding shaping situations.

2 Figure 2

Expectations too discrepant from the performance reality are counter-productive for the marketer. If they are too low (as happens with firms who acquire bad reputation), they hold no appeal for the offering. If too high, they lead to customer dissatisfaction with the performance. Therefore, both low and high expectations need to be shaped rather than accommodated. 1 Finally, customers with expectations too discrepant to shape need to be abandoned. See Figure 2. We turn now to paradigms for shaping customer expectations, the major focus of this paper.

Paradigms for Shaping Expectations

Defining Expectations

Expectations have been recognized as an important determinant of customer behavior in classic and current marketing literatures alike (Boulding et al., 1993; Howard and Sheth, 1969; Katona, 1951; Oliver, 1980; Olsen and Dover, 1979; Parasuraman, Berry, and Zeithaml, 1991). They have been studied both as comparison standards in post-purchase experience (Oliver, 1980; Parasuraman, Berry, and Zeithaml, 1991) and as brand or object beliefs in pre-purchase decision processes (Fishbein and Ajzen, 1975; Olsen and Dover, 1979; Wilkie and Pessemier, 1973). Following a common thread in various views of expectations in the literature, we define expectations as “perceived contingencies between any two events” (see Tolman, 1932; Vroom, 1964; and Parasuraman, Berry, and Zeithaml, 1991 for definitions, and Oliver and Russell, 1987, and Van Raaij, 1991 for comprehensive reviews). An event is an occurrence of an activity whether physical (e.g., a tree falling) or human (a customer complaining). Thus, these can be contingencies between, say, consuming a product and the outcomes experienced (i.e., pre-purchase brand beliefs), between an action and an outcome such as the kind of product care needed to obtain certain product performance, a contingency between two attributes such as a high price implying high quality, between a physical or social surrounding and self-role such as how to act a patron in an upscale restaurant, or between a desired goal and its antecedent action (e.g., “if you want to be served, you must take a number”).

Defining Shaping

We define shaping as “marketer’s use of communication and other cues intended to alter customer expectations.” In the social-psychology and related consumer behavior literatures, shaping is construed in the context of shaping behavior rather than expectations (Nord and Peter, 1980; Rothschild and Gaidis, 1981).2 The present concern is with changing “cognitions” (i.e., expectations) – with or without a concomitant behavioral change. Illustratively, in the fast-food drive-through example, our goal is not to necessarily modify behavior (i.e., discourage the use of drive-through windows), but rather to rectify an expectation associated with the behavior so that the experience is evaluated more positively.

We propose three paradigms for shaping expectations: (a) the human resource management paradigm, (ii) the framing paradigm, and (iii) the compliance paradigm. Each is discussed in turn.

The Human Resource Management Paradigm

Human resource management (HRM) may be defined as “strategic, integrated interventions designed to elicit commitment and to develop resourceful humans” (Storey, 1992). The HRM process consists of employee selection—> orientation, training, and education performance measurement, feedback and reward—> promotion, transfer, and retirement (see, Bowen, 1986; Fombrun, Tichy, and Devanna, 1984; Mathis and Jackson, 1988).3 Managers use these HRM processes to shape employee expectations of their role in the organization. Marketing managers must manage customer expectations just as they manage employee expectations—by shaping them. We propose that the HRM processes can be transferred, with some adaptations, to managing customer expectations as well.

Shaping by Selection

Customer selection can be an effective means of managing customer expectations. A firm that serves a broad range of customers with widely varying expectations cannot focus its efforts on any particular level of service, and divergent customers make divergent demands and thereby confuse and strain the service provider system (Davidow and Uttal, 1989a; Normann, 1984). Selectivity allows not only more well-fitting product or service offering, but it also permits more realistic promises to lure customers. In the absence of selectivity, advertising regresses toward trying to promise everything to everyone, an approach that cannot but “overpromise.”

Segmentation actually allows and engenders selectivity, and thus is in itself both an expectation meeting and an expectation shaping tool. But there are other mechanisms of selectivity which are not addressed by segmentation. These other mechanisms, called “admission procedures,” are discussed here.

Marketing firms can practice selection by instituting customer “admission policies.” By requiring a dress code, for example, fine dining restaurants keep out poorly “socialized” diners. University National Bank and Trust (UNBT) in Palo Alto admits customers only by referrals. Torn Melohn, former CEO of North American Tool & Die (NATD) says of the customer selectivity: “When I arrived at NATD, the customer list was haphazard. Whoever came through the door was a prospect . . . We soon developed three simple criteria for future NATD customers: (i) they had to be growing faster than their competitors; (ii) they had to be decent people to work with; and (iii) they had to pay their bills promptly” (Inc., 1994).

Segmentation and selection (implemented via “selective admissions policies”) are related but not identical. Both segmentation and selection target desirable subgroups of prospective customers. However, segmentation criteria can be implemented broadly, i.e., on groups of customers, and by a routinized procedure; in contrast, selective admission procedures require one-on-one judgment on the part of the “admission approval manager” who acts as the “gate keeper.” University National Bank and Trust (UNBT) in Palo Alto offers a good example of both. It targets high liquid asset clientele by (a) charging a high monthly fee for low balances, and (b) by admitting customers only with referrals. These two approaches exemplify, respectively, segmentation and selective admission procedures.

The selective admission procedure is particularly useful where segmentation is infeasible (e.g., public universities) or where intra-segment diversity can be further trimmed only by a case-by-case application of selection criteria (as in UNBT, Palo Alto’s use of referrals) or where segmentation is disallowed on public policy grounds. Thus, open universities cannot practice segmentation but can employ, literally, “selective admissions” policies. Banks that employ more rigorous screening of loan applicants, or NATD’s scrutiny of customers it will do business with exemplify not segmentation but the selection step of HRM. Furthermore, selectivity is not merely a matter of excluding undesirable customer groups. The “admission policies” purported to screen out non-targets also signal the expected behavior for those who care enough to “seek admittance.” NATD customers learn to pay their bills, and customers of UNBT of Palo Alto learn to ensure not writing a bad check.

Shaping by Orientation/Education/Training

Before s/he invites you to jump into the company Cadillac and take off on a wilderness tour of suburban mansions, country ranches, or seaside condos, a seasoned real estate agent draws you into an “orientation session” designed to size up your desires and means as well as to educate you regarding what you should expect from the properties about to be toured. Professors spend the first hour in a course laying out in detail student evaluation procedures and what the course “requires” of students, so that false student expectations are minimized. Declarations of liability in product warning labels or in service contracts (e.g., a dry cleaner assuming no responsibility for color fading) help to clarify customer expectations. The practice of shaping expectations by orientation is lot more common than is realized.

Just as likely, this important practice is ignored by many marketers. Waiters/waitresses in restaurants should but do not always advise patrons if certain menu portions are small or unsuitable for sharing. New car buyers are not always told of the smell of the burning metal or other things they are likely to experience during the “break-in” period. And not all cruise-lines mail pre-trip orientation information to their passengers.

Education is orientation with more in-depth information and opportunities for clarification of untenable assumptions. Customer education helps in clarifying the customer role in obtaining the intended product performance. For a wide ranging array of products, performance is almost always contingent on certain regimen of product care: automobiles (scheduled oil change, etc.), refrigerators (periodic defrosting), self-cleaning electric irons (they are not automatically self-cleaning), halogen lamps (“don’t move them when hot”), clothing (proper laundering), computers (using surge protectors), audio-cassettes or photo films (can’t leave them in the car, exposed to sun), frozen food (proper way to heat), shampoos (wait-time before rinsing), and weight-loss clinics (diet and exercise regimens), to name a few. If this contingency remains obscure, customer expectations of performance are bound to exceed the actualized performance. Armstrong World Industries used to receive a lot of complaints about its no-wax floors; its research attributed the cause to poor product maintenance. To remedy this situation, the company started printing an 800 number on the product’s surface; to learn how to remove the number, the printed message asked customers to call an 800 number. When customers called, Armstrong representatives made sure they gave customers tips on how to take care of the floors correctly. This short, over-the-phone training course has reduced customer complaints and increased satisfaction significantly, not only because the product potential is now more fully realized but also because those who neglect to follow the care regimen lower their expectations (Filipczak, 1991).

Customer education may sometimes turn into counseling, just as it does in HRM. While service employees often take the flak for callousness and impoliteness, not infrequently the customer too is rude or abusive of service employees. Such rudeness stems from customer expectations that they have to be this way to get their point across or get the service they believe they deserve. This calls for polite but firm “advice” by service employees that civil behavior is a prerequisite to dealing with the firm. Illustratively, when a customer of New Hope Communications, Inc. (a publishing firm in New Hope, Pa.) gets offensive, its employees are instructed to say, “One of our company policies is that we only do business with pleasant people. We have found that the solution to every problem comes from the spirit of cooperation. I am sure we can come up with something that can make both of us happy, but we must approach this in a very cooperative manner” (Nation’s Business, 1985).

Finally, training goes beyond orientation, education, or counseling in that it includes some skill development. Marketers of “assembly required” furniture can offer in-store video instructions to avoid customer expectation-frustration later during the assembly at home. In general, whenever customers are expected to be co-producers of service (e.g., self bagging in grocery stores, the use of ATM machines), training and education help to teach the necessary skills and to attain role-clarity. ATM customers need to be trained into the proper use of the machine, as indeed they were during the introductory period (Bond, 1987). In contrast, Service Merchandise’s Silent Sam (a computer terminal for customers to self-check-out) remains grossly under-utilized for want of attention to the training task. By not following through with a visible program of in-store customer training, the store has been successful in communicating a non-expectation of Silent Sam’s utilization by customers.

Shaping by Feedback & Rewards

Employee behavior is shaped by performance feedback and rewards (and punishment). Many business-to-business marketing situations lend themselves to customer performance review and feedback. Advertisers often review their advertising agencies, whereas the ad agencies review their clients rarely but should do so regularly. Afraid to lose their clients, advertising agencies and marketing research suppliers put up with all sort of idiosyncracies from the latter (e.g., short notice assignments, mid-stream changes, whimsical decisions, etc.) which hamper their service delivery. Client education and feedback as to which client behaviors and demands might be counter-productive can help mold appropriate expectations in the client (see, Deshpande and Zaltman, 1982; Zaltman and Moonnan, 1988). Generally, these revised expectations would yield modified behaviors, but where the latter are infeasible (e.g., when mid-stream changes are unavoidable), the client would likely absolve the supplier firm of blame for suboptimal performance.

Beyond performance review and verbal feedback, sometimes material rewards (or punishments) become feasible. For example, health insurance agencies reward non-smoking, and automobile insurance agencies offer a “good student” discount on its rates for young drivers. Likewise, airlines charge a change fee-increased recently from $35 to $50 by some airlines (e.g., Delta). Since “penalties” may actually bring in additional revenues (or at the very least they are revenue neutral), not behavior modification but molding of an inadvertently made expectation (namely, that flight plans can be changed at no costs) is the direct goal. Customers are being told to expect to pay if they impose costly-to-serve demands on the system. Likewise, when adequately alerted to increased premiums contingent upon poor school grades, failing students will more readily accept the higher premium, attributing the raised cost to themselves rather than to the insurance company.

Firms plan an advancement/migration path for employees. Marketing managers can similarly plan a migration path for customers. For example, a computer support company may assign customers to particular categories based on their service needs as well as on their business value (profit potential). Customer status can be reviewed periodically for category re-assignment, and review results shared with customers. Some credit card companies (e.g., AmEx) offer different levels of card privileges contingent upon a card holder’s income or spending.

Finally, not all customers are profitable for a company to court. Unprofitable accounts need to be weeded out. UNBT, Palo Alto, for example, closes an account if the customer writes two bad checks! Automobile insurance companies drop high-risk drivers, and teachers do assign failing grades to some students. This manner of “retiring” the customer is fine and desirable when warranted, but rather than come as a surprise, it should be preceded by expectation shaping, for example by phased progress toward ‘retirement’ (e.g., warnings, grace periods, interim appraisals and notifications of impending ‘retirement’).

Each of the aforementioned mechanisms may bring forth a new behavior, but not inevitably. Rather, their direct effect is on expectations. After being oriented to student evaluation procedures which include credit for regular attendance, many a student may continue to skip classes; product use instructions may be noted but not implemented; and weight-loss clinic clients may continue to compromise their regimens. But customers such as these would now enter or stay in the exchange process with diminished expectations. Even the performance feedback and reward procedures directly target expectations first, with behavior change only a resultant outcome, and not an inevitable outcome at that. Indeed, sometimes, the marketer may not care if the behavior is altered, as for example when the warned or penalized behavior is not any less profitable (e. g., penalty for non-cancelled reservations). The immediate gain of feedback and reward/punishment is the obtained acquiescence with marketer actions especially when the ensuing actions (e.g., policy termination) are preceded by expectation shaping feedback communications. Thus, expectations, not behaviors, remain the immediate targets of applying the HRM paradigm to customers.

The Framing Paradigm

Framing is the perspective people employ to view a scene, and perspectives are known to change the view. Illustratively, the perceived relative height of two adjacent mountains depends on the viewing angle, i.e., the frame one employs. In the marketing context, a shopper who accidently wanders into a store might be delighted to find a 20% price markdown; but a shopper lured by an ad hyping a “tremendous” sale might be disappointed with the same 20% markdown. Since expectations are reference points, i.e., perspectives, the theory of framing can be utilized for shaping some customer expectations.

The manner in which information about various alternatives is presented has been shown to influence a person’s choice among those alternatives. In one such classic experiment by Kahneman and Tversky (1979), subjects were to choose between two options to address a possible outbreak of disease that could kill 600 persons. Subjects chose Option ‘A’ which was described as capable of saving 200 lives for sure compared to Option ‘B’ which was described as unable to prevent as many as 400 deaths. These simple descriptions switched the reference frames from lives saved to lives lost, and biased the choice between two objectively equivalent alternatives. More recently, Puto (1987) has demonstrated that reference points influence the evaluation of buying options by decision makers, and, likewise, Keller (1991) has shown that the frame of viewing an advertisement influences the recall of brand information.

Several experimental studies have employed framing as a device to study how subjects with different mindsets perform a given task. Three studies are illustrative of framing procedures. In one study, Gardner (1985) simply instructed the subjects to view the given advertisement so as to either (a) evaluate the advertised brand, or (b) evaluate the style of the advertisement (rhyme, hyperbole, etc.); subjects instructed to evaluate the brand apparently paid greater attention to the message content and were, accordingly, able to recall brand features more than the other group. Petty, Cacioppo, and Schumann’s (1983) procedure was less direct. These researchers told subjects that the advertisements they were about to see were for a new brand of shaving blades either about to be introduced in their own town or likely to be introduced sometime next year in a far away region of the country. The first group of subjects registered more brand related information than did the second group. The third example is provided by an experiment by Sujan et a1. (1993). In this study, subjects were shown a wine ad either with or without priming the subject’s ‘autobiographical’ memory (i.e., memory of a personal, positive experience in a consumption setting of relevance to the advertised product). Subjects with autobiographical retrieval had a more positive brand attitude than those for whom such self-referencing memory was not primed. An earlier experiment by Bettrnan and Sujan (1987) also used priming as the framing method; priming is defined here as “making salient certain decision criteria for choice.” It was shown that priming influenced novice consumers but not expert consumers.

These framing experiments show that “information” about what is to follow sets up the expectations in the desired manner, and their procedures suggest three paths to framing: (i) direct instruction or suggestion; (ii) context design; and (iii) selective priming. The three methods differ in the degree of explicit and deliberate processing of information. Priming is the most undeliberated process: selective contents of memory are instantly and automatically (i.e., without conscious effort) activated. In context design, one attempts to form, by deliberation, inferential beliefs from the contextual information (e.g., drawing inference about the food quality by looking at the restaurant facade). Finally, in direct suggestion, the advocated expectation is externally supplied (rather than constructed by the internal process of automatic activation or deliberated inference) and is most direct in its influence intent.

Shaping by Direct Suggestion

In marketing, direct instruction/suggestion is being utilized when a telemarketer asks callers to “keep the credit card ready”—it lets the viewers know that if they call, they should expect to order. Other examples include, “Thank you for not smoking,” “Mail early for Christmas,” and “Reservations advised.” At the expense of belaboring the point, it might be reiterated that these direct instructions may well change behavior, but only by first changing the expectations. Moreover, if the original behavior persists, it is less likely to lead to expectation-frustration (e.g., restaurant patrons showing up without reservations may willingly accept a long wait). Direct suggestion is often utilized in marketing communications to suggest goals a customer should be seeking from a product or service, such as when an insurance agency advertises, “If you don’t hear from your claim adjuster within 24 hours, what good is that insurance?”

Shaping by Context Design

A straightforward example of context design is the role of physical surroundings in a retail store or service establishment. Literature on measurement of service quality explicitly recognizes the influence of physical and tangible cues in customer judgments of quality (Bitner, 1990; Parasuraman, Zeithaml, and Berry, 1985, 1989). It is reasonable to extrapolate that the tangible indicators of perceived quality also cue expectations about the imminent consumption experience, and about how one is expected to behave as a consumer (Carbone and Haeckel, 1994). Consider, for example, the role of atmospherics and employee attire in

restaurants: the playful ambiance in the TGIF restaurants and mere ‘functional’ ambiance in, say, Denny’s or Perkins restaurants set up entirely different expectations about the dining experience as well as about the appropriate patron behavior.

Shaping by Selective Priming

Finally, selective priming, the third method of framing, is being employed when the introductory portion of an advertisement or a visual in a pant advertisement selectively retrieves one rather than another part of memory as it did in Sujan et. al.’s experiment In direct mail advertising, the external appearance of the letter primes receiver expectations as to the importance of its contents. A FedEx letter, for example, primes an expectation of the letter’s importance rather than mere urgency.

Alteration by Compliance

The third paradigm for expectation shaping is mandated compliance. Compliance has been defined as “behavior by subjects or actors that conforms to the requirements of behavioral prescriptions” (Young, 1979). Thus, for compliance to occur, (a) behavioral prescriptions should be specified; and (b) there should be enforcement mechanisms that bring forth conformance. Note that the enforcement mechanisms need seldom be invoked; rather it is their very presence that brings forth compliance. Indeed, compliance ought not to automatically conjure up images of some autocratic, punitive, law-enforcement bodies overseeing customer behavior (although some of that is in order as well just to prevent criminal customer behavior). Behavioral prescriptions supply the content of expectations, and in many cases bringing such content to customer attention in and of itself elicits compliance. Thus, visitors won’t park in the fire lane; shoppers won’t touch or open merchandise if there are signs to that effect; and customers will save receipts for refund if so advised.

Three ‘sources’ of prescriptions are utilized: (i) prescriptions by government regulation, (ii) by group and societal norms, and (iii) by business procedures. Examples of government regulation abound, including the banning of ticket scalping, prohibition of sales of liquor to minors, automobile speeding, highway littering, state regulation of building codes, teen curfew, etc. (e.g., Krapfel, 1982; Sheth, 1985). It may be noted that government is not always the initiator of these and other customer expectation shaping regulations. At times, citizen groups and marketers themselves are. For example, insurance industry could lobby the state governments to make consumer purchase of insurance mandatory in their state; or, as another example. to permit it to refuse insuring those who do not adopt certain protective measures.

Prescriptions by business procedures are exemplified by minimum purchase requirements, by ‘take a number’ queue-management procedures, merchandise return policies, layaway procedures for unclaimed items, tow-away signs, and compensation rules for over-booked flights (e.g., the required lead-time for check-in). Marketers mold customer expectations by instituting business procedures and by prominently bringing them to the customer attention.

Another example is the group health insurance plans sold to employers who then “force” all employees to participate in their health maintenance according to the prescribed schedule and options (e.g., “you cannot visit an out-of-network physician”). Indeed, given that the individual customer’s choice is restricted, the “level of service” the health care provider offers, assuming it is in the zone of tolerance (Parasuraman et al., l994), in itself shapes customer expectations. These expectations relate to such attributes of service as waiting time, responsiveness, and permissible treatment options. Note that, in this example, no behavioral compliance is targeted; rather it is envisaged only that the choice restriction eventually will bring expectations in line with what the provider firm offers.

Group and societal norms, the third source of compliance, are a powerful force in consumer behavior (Bearden and EtzeI, 1982; Howard and Sheth, 1969; Miniard and Cohen, 1983; Sheth, 1974). A marketer uses group pressure to induce the expectation that certain group-endorsed activities are to be performed. Many fund raising and social cause events are organized around some membership groups, such as the United Way campaign by, say, a church organization (Fox and Kotler, 1980). The expectation that one is to participate in such social causes stems from the perceived norms of the group or the organizational unit (Sheth, 1983). Likewise, social marketing communications can and do effectively employ celebrities who, by their reference group status, mold pertinent expectations of their target audiences (e.g., a current PSA campaign, “The Mote You Know,” on NBC’s Saturday morning programs uses various teen stars who admonish their teen audiences on various behavioral expectations, such as not getting into fights, i.e., ‘being cool’).

When Are the Three Shaping Paradigms Appropnate?

When might one shaping paradigm be more appropriate than others? We suggest two parameters that bear on this question: (i) the extent to which a current expectation is defined or formed (Formedness); and (ii) the degree of customer effort entailed in the assimilation of the new expectation (Assimilation Effort). Formedness ranges from no expectations or fuzzy expectations to fully formed expectations. Fuzzy expectations occur when the customer has either never encountered the situation (e.g., what would Thai food be like?), or has not deliberately processed any information about it (e.g., what is the real purpose of the drive-through window?). Fully formed expectations result from experience or deliberation of stimulus information (e.g., “domestic cars are poorly made”).

Assimilation effort, our second dimension, is the degree of effort needed to adopt and act upon the new or altered expectation. Self-bussing of tables in a restaurant represents a small physical effort, but proper care of wooden floors represents a large effort. The two dimensions may not be orthogonal but nor are they redundant. Some new expectations might seem incredulous and thus resist assimilation even when no a priori expectations existed; conversely, well formed expectations are easily replaced with new information if topic significance or change consequences are low.

The concept of fuzziness/formedness is embedded in a number of structural discussions of expectations (Tolman, 1932; Kahneman and Tversky, 1982). In this literature, “ambiguity” has been considered a characteristic of expectations. Expectations are contingencies. When one knows probable contingencies with certainty, expectations are thought to be fully formed. But when the outcomes are as yet unidentified, or probability of outcomes remains unknown, ambiguity exists, and expectations are nearly non-existent or fuzzy (see, Oliver and Winer, 1987 for a detailed discussion).

Figure 3. Expectation discrepancy and managing strategies.

The role of assimilation effort has been theorized in at least two prior literatures. First, in the diffusion of innovations literature, discontinuous innovations have been thought to be adopted less readily than continuous innovations, and presumably, the former entail greater mental or physical effort than the latter (McQuarrie and Langmeyer, 1985; Ram and Sheth, 1989; Rogers, 1976). Second, some recent literature on self-regulation of attitudes, intentions, and behavior posits effort as an important mediator of intention-behavior correspondence (cf. Bagozzi, 1992; Kuhl, 1985).

Concerning the conditions appropriate for the three paradigms, we suggest the following research hypotheses. When expectations are fuzzy or non-existent, and when assimilation effort is low, framing is likely to be the appropriate method. To set up expectations where none exist is in fact the essence of framing. Moreover, framing is a relatively unobtrusive method, and as such would work only if the requisite assimilation effort is low. High effort will of necessity require more intrusive shaping methods. When expectations are moderately formed, and effort required is moderate as well, HRM methods would be more appropriate. Finally, if the expectations are already fully formed, and assimilation effort is high, only compliance procedures would likely be effective. See Figure 3.

Furthermore, we hypothesize a hierarchy of efficacy and efficiency along the two axes in Figure 3: Paradigms are expected to be effective as well for lower levels of formedness and effort but not for higher levels. Thus, compliance would likely be effective also for moderately formed and fuzzy expectations, and for expectations requiring low or moderate assimilation effort Likewise, HRM would be effective also for fuzzy expectations and low assimilation effort, but is unlikely to be effective for fully formed expectations. And framing is unlikely to be effective for moderately formed or moderate effort conditions and definitely to be ineffective for fully formed and high assimilation effort expectations. But, although effective, a higher level paradigm is an overkill for lower levels of expectation and effort states, and, accordingly, less efficient to utilize.

The three subprocesses within each paradigm align themselves along the finer gradations on the effort dimension. Thus, within the effort zone broadly labeled ‘low,” the three subprocesses of framing would be more or less effective as follows. Priming is likely to be most effective in the very low effort condition. The other two methods of framing are relatively more intrusive than priming (direct instruction more so than context design), and would be more effective if effort required is moderately low (for context design) or at the upper end of the low effort zone (for direct instruction). Consider a street performer who needs to create, say, three expectations, ordered here by an increasing degree of assimilation effort (but the same degree of unformedness): (i) the show is for children (ii) spectators are to donate money, and (iii) the performance will be of an unusual caliber worth accommodating in one’s schedule. The first expectation is easy to engender by simply having the performer don a clown or animal costume. The very sight of these costumes primes, without conscious effort, the expectation of a juvenile performance. For the second expectation, the performer might place a hat with small bills in it (context design).4 The third expectation, somewhat hard to believe (i.e., assimilate) from street performers, would require direct suggestion by, say, the program announcer that the performer is an acclaimed artist.

Likewise, for the moderately formed expectations and in the broad range of moderate effort, the three HRM procedures are more or less appropriate depending on the degree of moderate effort entailed. To illustrate, all customers have some general expectations that if they test-drive a car, they would be expected to discuss their interest briefly with the salesperson. (If they don’t have this expectation, direct instruction of the framing paradigm would be helpful.) But what if they don’t expect it to be an in-depth interview? Then, the dealer might want to set up appointments for the test-drive and the subsequent interview. Or better still, the dealer might pre-screen prospective test-drivers. ‘The “by appointments only” test drive would implement the selection procedure of HRM and mold expectations that entail relatively lower end of moderate customer effort. Consider another expectation to be molded, namely that the particular car would handle differently than other sports cars the customer may have had experience with. This is an expectation that can be molded simply by orientation since assimilating the new expectation is relatively at the lower end of the moderate effort zone. Education is more extensive orientation and may be called for if the new expectation is somewhat harder to accept (i.e., entails more effort), such as if the customer were to feel (and argue) that the handling difference being advocated doesn’t make sense. When the expectation to be molded entails even more effort (as in following a health regimen), even education may not suffice; rather, performance appraisal, feedback, and rewards are likely to be effective. Education, feedback, and reward are especially useful for business-to-business customers, where for example a franchisor may need to mold his franchisee’s expectations about the upkeep of the store.

Finally, with the fully formed expectations, the three processes of compliance also are more or less effective depending on the degree of assimilation effort. Within the compliance paradigm, business procedures are likely to suffice if the effort required is at the low end of high effort zone (e.g., appointments required). Group and societal norms would work for middle levels of high effort zone; they would be an overkill for low-effort conditions and perhaps insufficient for the extremely high effort condition. For the latter (i.e.. the high end of the high effort condition), regulation by government may be needed. For example, if customers have a fully formed expectation of being assured a seat on the plane when they have a confirmed reservation, and if that expectation needs to be molded, then the business procedure that requires passengers to show up at the airport by a certain time needs to be instituted and communicated. If that means too much effort or inconvenience for the customer, then to successfully implement it one would require the force of law behind it.

Of course, if customers have fully formed expectations, and if the effort is perceived to be extremely high (higher than what even law can enforce) or if a law cannot be enacted, then shaping these expectations may be infeasible. Such customers need to be abandoned because expectation molding is unlikely to be economically feasible. Customers who make appointments with doctors or reserve rental cars or restaurants and then fail to show up and think nothing of the “no show” hold the fully formed and well-entrenched expectation that “no show” is okay. One can mold that cxpectation by charging a fee for ‘no show’, If that fee seems unreasonable or exorbitant, then those customers will simply deselect themselves (i.e., get abandoned). If they find the fee to be reasonable or find keeping appointments to entail a relatively low effort, then the expectation gets molded by this “business procedure”

Three further points may be clarified. (I) A business procedure differs from “direct suggestion” (a framing procedure) in that complying with the direct suggestion is voluntary. Thus, “reservation suggested” is voluntary and hence a direct suggestion method of framing; in contrast, “reservation required” is a business procedure and allows customers no choice other than the one of exiting the exchange. (2) Business procedures might sometimes serve as the selection procedure of the HRM approach (e.g., “closed for business on Saturdays”), but mostly the focus of the business procedure is on those customers who do choose to deal with the marketer, rather than to keep unwanted customers out. Generally then, the business procedures are about the little things customers may or may not do in the exchange process (e.g., “do not open packages”), rather than about issues of major concern or inconvenience to the customer—issues which would impact on their decisions to engage in the exchange per se. (3) Various shaping paradigms are not mutually exclusive and may sometimes work in tandem. For example, a business procedure (or government regulation) might serve to initially unsettle a hitherto fully-formed expectation; the acceptance of the advocated expectation may then be facilitated by some educational communication. Thus, the contingency scheme of Figure 3 is purported as a broad heuristic guideline 5 for selecting an expectation shaping strategy, and for guiding further hypotheses generation and testing in future research.

Marketing Mix Tools (or Shaping Expectations: Some Examples

In this section, we bring together our discussion of the three paradigms and the marketing tools. The latter are means of implementing the three paradigms, but different tools serve the paradigms more or less directly. Table 1 displays this correspondence.

Marketing Tools for HRM

Every element of the marketing mix can be utilized for the HRM method of shaping expectations. The selection phase of HRM is implemented by product design (intended to meet a narrow band of needs and expectations), by exclusionary pricing, by controlling the intensity of distribution, and/or by designing a physical facility so that it may intimidate some and invite others. Media selection clearly targets intended selective audiences, as do the messages flashed in ad headlines. Underpromising both in mass media and personal communications also selects audiences.

The orientation/education phase of HRM is implemented by in-pack or on-pack product use directions, by complementary product display in stores, and, in the area of pricing, by facilitating price comparisons between store brand and manufacturer’s brand via shelf tags and by educating the customer about the lifetime cost concept which may bring out the true price/value of a brand. Promotion can be utilized for this phase of HRM by educational or pioneering advertising, by consultative selling and in debriefing sessions in interpersonal selling.

The reward phase of the HRM paradigm is implemented through product designs (e.g., policies for customer category upgrading as in the type of credit cards), by price rewards such as volume discounts, or good-driver discount for automobile insurance, by selected sales promotions (e.g., frequency awards), and by advance communication of conditions for membership terminations.

Marketing Tools for Framing

Within the framing paradigm, direct instruction is relevant to giving customers procedural advice (e.g., “reservations suggested”) which serves, beyond eliciting the advised behavior directly, to frame expectations about the product use experience (e.g., “there will be a waiting line,” or “it must be a popular restaurant”). The promise-content of all marketing communications also serves to frame (by direct instruction) relevant evaluative criteria for product/service performance. Savvy marketers now tend to underpromise, as when Xerox inflates the Lime it would take a service rep to visit (Davidow and tittal, 1989b) or when Car) Sewell’s car dealership in Dallas (the largest in the country) builds in about 5% slack in cost estimates for the repair work (Sewell, 1990).

The context-design method of framing is implemented by managing the design of physical facilities as part of a service-product design, with price as a cue to product quality, and by communicating the specificity of warranties. Selective priming is the focus of much of the opening content of commercials, and of its visual elements throughout.

Marketing Tools for Compliance

Table 1

Compliance is induced within the regulatory framework by formulating appropriate product-use laws (such as the mandatory wearing of helmet for motorcycle riders, or building codes that specify or prohibit the use of certain construction materials). Getting public policy altered and public mandates enacted requires personal selling (i.e., lobbying) to policy makers (Krapfel. 1982), and mass communication for its grass-roots legitimation.

In the area of pricing, unit pricing and price disclosure laws shape customer expectations against price gouging and about receiving protection from deceptive pricing practices. Zoning laws restrict business locations and thus shape expectations about being protected against commercial encroachment of residential areas. Communications aid compliance with the regulation by reminding customers of the laws and implied penalties; public service advertising, or social advertising, attempts to create a favorable climate of opinion for compliance, frequently leveraging reference group normative expectations. In compliance via group norms, the product element comes into play in designing “nonnative offerings” for institutional markets (e.g., business firms’ contracts with travel agencies which require frequent flyer benefits to accrue to firms rather than employees).

Finally, compliance by business procedures too can utilize all marketing mix tools. The design of business procedures pertains to the product element. The prevalent business practice of one price (i.e.. price not negotiable) shapes customer expectations about receiving a fair price (e.g., Saturn’s “no haggling” policy), and low price guarantees similarly assure customers to expect a good deal from the merchant. Hours of operation remind customers when they are expected to shop, and in-store surveillance cameras shape expectations about the probability of being caught shop-lifting. In general, the visible communication of business procedures helps clarify customer expectations about the role they are to play while engaging in business transactions.

Summary and Conclusion

Managing customer expectations is a pre-requisite to creating a satisfied customer, a quintessential goal of marketing. The predominant approach to achieving this goal has been to endeavor to meet customer expectations. This approach is lopsided and needs balancing by attempts to shape rather than merely fulfil customer expectations. Marketers have under-utilized appropriate shaping strategies. Of course, expectation shaping takes place everyday via an abundant supply of marketing communications; but if anything, this shaping is in the wrong direction, creating unrealistic expectations by hype and overpromise-thus making the expectation satisfaction more rather than less elusive.

This paper identified three specific paradigms for planning expectation shaping actions. One of these, the ‘human resource management (HRM)’ paradigm suggests that customer expectations can be managed by some adaptations of the processes of employee management. Just as firms do with employees, they can use the processes of selection -> orientation/training/education -> performance measurement, rewards, and retirement to manage its customers’ expectations, and consequently their exchange and consummation experience. The second paradigm is that of framing, i.e., developing reference points prior to processing information. Within the framing paradigm, there are three specific mechanisms: direct instruction, context setup, and selective priming. Direct instruction can convey marketer expectations about the customer role in the efficient completion of a purchase transaction (e.g., “please keep your credit card ready”). Context set up either suggests the comparison standard directly (as in “how much would you expect to pay for this?”) or by physical cues (e.g., high-value dollar bills, rather than just coins, in the collection pans of street entertainers). Finally, selective priming of relevant memory is effected by opening vignettes in commercials. Because these three mechanisms are routinely utilized or occur inevitably, framing occurs whether or not intended. Our discussion raises the necessity of basing their deployment on a scrutiny of their framing effects so that the expectation outcomes are purported rather than accidental. Finally, when customers lack the normative expectations about adopting salutary products or behaviors, compliance (by law, by reference group norms, or by business procedures) can be an effective mechanism for shaping expectations.

Each marketer should comprehensively inventory and prioritize the current expectations customers hold (or the lack of them) in three areas: benefits of the product use, various aspects of the exchange process and customer role in it, and customer role in product care and use. Expectations that are fuzzy or absent as well as those that are unrealistic are both unproductive for marketers to fulfil. Endeavors to shape them toward realism will enhance the efficiency of business resources, and will, at the same time, diminish the incidence of disappointed customer expectations. This can only mean more customer well-being, both individually and in the aggregate. For this reason, the much neglected task of customer expectation shaping deserves close attention from marketing practitioners and academicians alike.

Acknowledgments

Helpful comments from faculty participants of the Marketing Seminar at Emory University and Sharon Beatty arc gratefully acknowledged.

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  1. Shaping is used as a broader term to include alteration of extant expectations as well as the development of expectations currently fuzzy or non-existent.
  2. In that context, II is defined as a process of arranging conditions that change the probabilities of other behaviors. It involves the positive reinforcement of successive approximations of the desired behavior or of behaviors that must be performed before the desired response can be emitted (Nord and Peter. 1980; Peter and Olson. 1993. p. 307). While reinforcing a behavior by rewarding its performance may certainly be one route to shaping expectations, we assume neither successive approximations nor reinforcement schedules. Acquiring altered expectations entails neither classical nor operant conditioning modes of learning; rather. it entails cognitive learning, which may or may not be based on or lend to behavior modification. (For discussion of classical and operant conditioning see, Peter and Nord. 1982. and for cognitive learning see Schiffman and Kanuk. 1991.)
  3. For a good Comparative discussion of HRM versus personnel management. see Storcy (1992).
  4. Whether a cue serves as a printing device or as a context depends on the prior learning of the linkage between the cue and the Intended inference- with greater (lesser) learning Implying priming (context).
  5. More precise specifications are desirable but unavailable presently for want of a priori theory

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