Relationship behavior between customers and service providers in demarketing situations: What makes customers try to improve their relationships?

Abstract

In this study, we examine customer reactions to demarketing stimulation in an e-business environment. Specifically, we examine attempts to exit or improve a relationship with a service provider. A 2×2×2 MANOVA, 2 (demarketing type: price, product)×2 (strength: strong, weak)×2 (self-regulatory focus: promotion, prevention) mixed design on psychological response, exit and relationship improvement with a service provider, as the dependent variables, was implemented with undergraduate student participants at a northeast university in the United States. Stimulations in each situation were manipulated based on Kotler and Levy’s demarketing–marketing mix. Moderating psychological factors were incorporated in this investigation, selected from prior research studies in regulatory focus. With each stimulation, respondents were asked to answer questions about their relationship with an organization in terms of their intention to dissolve, maintain or improve their relationship. In addition, the moderating effects of self-regulatory focus (promotion and prevention) were examined to investigate the psychological response under the different stimulation. In this investigation, we show that there is a significant reaction to demarketing stimulation in the e-business marketplace; consumers exhibit a negative response against demarketing stimuli when price stimulations and strength stimulations are high. Customers with a promotion focus were more likely to seek a better relationship with their service provider. Implications from the theory and practical applications are discussed.