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Influence of Cultural Factors on Customer Satisfaction and Repurchase Intent

Dr. Mizuho Ogikubo


Bloomberg L.P. (Graduated from Tokyo Institute of Technology), Tokyo JAPAN
Email: ogikubo.m.aa@m.titech.ac.jp

Abstract. While an extant literature of cross national comparison of customer satisfaction


attributed the difference between countries to national culture, it is expected that cultural influence
is also significant at individual consumers’ level. This research investigates effects of cultural
factors on customer satisfaction and repurchase intent. A questionnaire survey was carried out to
measure cultural factors, variety-seeking, switching cost, customer satisfaction, and repurchase
intent with eight different types of products/services. As indicators of cultural difference, Hofstede’s
cultural dimensions were employed: “Power Distance”, “Individualism vs. Collectivism”,
“Masculinity vs. Femininity”, and “Uncertainty Avoidance”. The results suggested there exists a
moderating effect of switching costs on the relationship between customer satisfaction and cultural
factors. In the high-switching-cost group, it was found that customer satisfaction is positively
influenced by individualism and negatively influenced by uncertainty avoidance. In addition, we also
found the negative influence of variety seeking on repurchase intent in particular in service
industries rather than products in addition to the known effect of customer satisfaction and
switching costs.
Key words: Uncertainty avoidance, Individualism, Switching costs, Variety seeking

Additional Remark: This research was conducted when the author was in Tokyo Institute of
Technology, advised by Prof. Takao Enkawa with cooperation of Mr. Zheng Huang.

1. Introduction
Customer satisfaction has long been a central issue in marketing theory and practice. While the
extant literature examined antecedents and consequences of customer satisfaction, there has been
relatively little study on its antecedents. Moreover, despite increasing concern about
internationalization strategies of companies and organizations, the aspect of cultural difference has
been lacking in customer satisfaction research.
A recent development in customer satisfaction research has been the emergence of the National
Customer Satisfaction Indexes, which not only measure customer satisfaction at the individual
company level, but also provide aggregated results at the industry, sector, and national economy
levels. Sweden was first to establish Swedish Customer Satisfaction Barometer (SCSB), followed
by American Customer Satisfaction Index (ACSI; Fornell et al. 2005), and currently such indexes
have been operating in Germany, Denmark, Finland, Hong Kong, Iceland, Norway, and in South
Korea. Based on the periodical surveys which are conducted through computer-assisted telephone
interviews from a considerable number of domestic consumers, the scores of individual respondents
are assessed for each company. The company-level scores are aggregated to produce the industry-
level scores, and then the industry-level scores are aggregated to the scores at the level of national
economy.
Johnson et al. (2002) discussed validity of comparisons of these indexes among countries and
industries. Ogikubo et al. (2007) compared customer satisfaction levels among nine countries and
indicated effect of economic institutions and national culture. While the availability of aggregate-
level customer satisfaction data is limited at this point, individual-level analyses will enable more
detailed investigation with higher reliability. This research explores effects of culture and values of
individual consumers on customer satisfaction and repurchase intent.

2. Theoretical Backgrounds and Hypothesis


As a comprehensive and widely authorized measure of cultural differences, Hofstede (2004)
conducted surveys to more than 10,000 individuals in over 50 countries/regions and classified
national cultures into four dimensions in a robust manner: Uncertainty Avoidance (UAI),
Individualism/Collectivism (IDV), Power Distance (PDI), and Masculinity/Femininity (MAS).
Each dimension is given by 0-100 point scores. Uncertainty Avoidance means tolerance of
unstructured, unclear, or unpredictable situations. Societies with low uncertainty avoidance are more
risk taking, while societies with high uncertainty avoidance tend to be distrustful of new ideas and
place more importance on rules as a means to avoid risk. A high score means strong Uncertainty
Avoidance, while a low score means weak Uncertainty Avoidance. Individualism/Collectivism is the
extent of self versus collective interest. In individualistic cultures, “people look after themselves and
their immediate family members only,” while in collectivistic cultures, “people look after the
interests of larger groups and collectivities in exchange for loyalty” (Hofstede et al. 2004). A high
score means strong Individualism, while a low score means strong collectivism. Power Distance
refers to the extent to which inequality is accepted. A high score means large power distance, while a
low score means small power distance. Masculinity/Femininity means well-defined versus
overlapping sex roles. A high score means strong masculinity while a low score means strong
femininity.
Using these four dimensions, Ogikubo et al. (2007) reported the systematic differences in
customer satisfaction levels between countries, and they found that customer satisfaction is higher in
countries where Uncertainty Avoidance is weaker and Individualism is higher (Figure 1). The
negative correlation of customer satisfaction with Uncertainty Avoidance was interpreted as follows:
In a strong-uncertainty-avoidance society, precision and punctuality are emphasized, which leads to
high demand levels and strict evaluations by consumers and meeting their expectations are more
difficult. Meanwhile, the positive correlation with individualism was explained in this way: In a
high-individualism culture, innovations, entrepreneurship, freedom are promoted in a company or
economy, which results in their superior abilities and motivations to provide better experience with
consumers. Based on the aggregate-level findings, similar results are expected for the individual-
level analysis.
Hypothesis 1: At individual level, customer satisfaction will be positively correlated with
individualism and uncertainty avoidance.

80 80

USA USA
Finland Finland
Denmark Denmark

Customer Satisafaction (2003-2005)


Customer Satisafaction (2003-2005)

70 70
Hong Kong Hong Kong
Norway Sweden Norway Sweden

Japan Germany Japan Germany


60 60

S. Korea S. Korea
50 50

up:-1.10 up: 4.72 (0.0


40 40
(0.466)
0 20 40 60 80 100 0 20 40 60 80 100
Individualism Individualism

r = 0.641
Figure 1. Comparison of Customer Satisfaction among Countries (Source: Ogikubo et al., 2007)

Furthermore, a hypothesis is extended to outcome of satisfaction, especially repurchase intent.


Yamamoto et al. (2000) suggested the existence of two significant factors that affect repurchase
intent, namely customer satisfaction and switching costs. Besides improving customer satisfaction,
raising switching costs is considered to be effective to increase loyalty as it dissuades customers
from changing to alternative suppliers. In addition, variety seeking, a descendent of consumers’
values, is expected be involved in the relationship with culture, individual vales, customer
satisfaction, and repurchase intent. It has been widely studied as an important element of
switching behavior (e.g. Baumgartner et. al., 1996). It is conceptualized as “the biased behavioral
response by some decision making unit to a specific item relative to previous responses within the
same behavioral category, due to the utility inherent in variation per se, independent of the
instrumental or functional value of the alternative or items” (Van Trijp et al. 1996). It is said that
variety seeking behavior is motivated by the prospect of exciting and novel experiences, the desire
for variation and change, the urge to satisfy one’s curiosity, risk taking in making product choices,
innovativeness in the adoption of new products, browsing, and curiosity-motivated information
acquisition, which seem to be rooted in individual culture and belief. As Hofstede et al. (2004)
mentioned that individuals with high individualism and weak uncertainty avoidance feel
comfortable with unfamiliar risks or in ambiguous situations, variety seeking is expected to be
higher in such a group.
Hypothesis 2: At individual level, individualism will have a positive effect on variety seeking
and uncertainty avoidance will have a negative effect on it.
The above discussion leads naturally to the hypothesis that high-variety-seeking consumers
easily switch and their intentions to stay with the brand will be lower than those who are with low
variety seeking. However, this tendency will differ by the nature of products/services as some
products/services are difficult to be renewed due to the switching costs, price, or product lifecycle.
Here, “switching costs” indicates two different kinds of objects: one is inherent in a product/service
and the other means a consumer’s perception of physical and psychological barrier. The former
interpretation is more generally used in the literature, but this study refers to the latter.
Hypothesis 3: While variety seeking has a negative effect on repurchase intent, the magnitudes
of the impacts differ by a product/service.

3. Survey and Methodology


To validate the hypotheses, a questionnaire survey was carried out to capture the cultural factors,
variety seeking, switching costs, customer satisfaction, and repurchase intent. In the light of
cultural dimensions, some researches mentioned Hofstede’s model is applicable to individual level
as well as national level, and has been used by hundreds of researches at company, group, and
individual level (e.g. Soares, 2007). In a preliminary phase, it was found out that Hofstede’s
Values Survey Module 1994 (VSM 94) requires a modification because it contains some questions
related to job, which are difficult for students or housewives to answer. Then questions were added
to the original VSM 94 referring to more general situations at school, family, or societal norms, and
eventually each dimension comprises three items and all four dimensions brings the total to 12.
On the basis of Baumgartner et al. (1996) and Van Trijp et al. (1996), variety seeking was
measured by these two questions: “I enjoy taking chances in buying a new product/service”, and “I
get bored sticking with a brand even though I am satisfied with it”. Each question employed a five
point scale which ranges from “1: disagree” to “5: agree”.
While switching costs is described in various ways, Jones et al. (1995) classified this into the
following three types: 1. continuity costs (lost performance costs and uncertainty cost), 2. learning
costs (setup costs and pre-switching search and evaluation costs), and 3. sunk costs. According to
their definition, this research interprets switching costs as “consumers’ perceptions of the time, cost,
effort, and the risk of switching providers”. The questionnaire contained five questions regarding
pre-switching search and evaluation costs, lost performance costs, learning costs, and effort, risk
and anxiety of switching. And it used five point scales of “1: disagree” to “5: agree”.
Customer satisfaction ratings were obtained by asking overall satisfaction with the
product/service that the respondent currently used based on a 100 point scale. Repurchase intent
referred to the probability of buying the same product/service, and it also employed 100 point scales.
The following eight different sorts of products and services were selected for the survey, so that
switching costs, price, and upgrade cycle diversify and most of the respondents possesses and easy
to evaluate them. The survey was carried out from September to November 2006. A convenience
sample was obtained through group interviews and placement method mainly from students and
staffs of Tokyo Institute of Technology and other students and working people residing in Greater
Tokyo Area, Japan. As can be seen from Table 1, valid response was 311 and male to female ratio
was subequal, while students accounts for approximately two thirds of all respondents.
Table 1 Sample Number for each Product and Service

Student Working People


Total
Male Female Male Female
TV 123 65 31 69 288
PC 128 68 24 63 283
Shampoo 113 68 26 68 275
Mobile Terminal 126 67 27 66 286
Mobile Carrier 130 70 30 68 298
Hair Salon 125 69 26 73 293
Portal Site 125 66 21 54 266
Bank 126 68 33 73 300

4. The Cultural Influences on Customer Satisfaction


Figure 2 describes switching costs, customer satisfaction, and repurchase intent of each
product/service. The scores of switching costs were calculated by averaging the results of the five
corresponding questions. Among the eight products/services, switching costs is relatively higher
for mobile terminal, mobile carrier, hair salon, and bank. While customer satisfaction is around
70 for all products and services and almost in equal scales, repurchase intent varies from about 50 to
80 and is higher for the four services (mobile carrier, hair salon ,portal site, and bank) than the four
products (TV, PC, shampoo, and mobile terminal). This seems to be corresponding with an
argument by Jones and Sasser (1995) that loyalty is higher in than high-switching-costs industries
than low-switching-costs industries even though their customer satisfaction is at the same level.
Figure 2. Averages Scores of Switching costs, Customer Satisfaction, and Repurchase Intent.

To explore validity of Hypothesis 1, correlations between the cultural dimension scores and
customer satisfaction are presented in Table 2Table for the eight products/services and for their
total. The results are separately listed for high-switching-costs industries (mobile terminal, mobile
carrier, hair salon, and bank) and low-switching-costs industries (TV, PC, shampoo, and portal site).
The cultural dimension score was calculated by averaging the results of the three corresponding
questions for each dimension. Broadly, most of the correlational results were insignificant.
Rather, there is a positive correlation between uncertainty avoidance and customer satisfaction with
TV. However, the coefficient sign is negative for the relationship between uncertainty avoidance
and customer satisfaction with mobile terminal, mobile carrier, and hair salon which are high in
switching costs. Therefore this result implies that switching costs intervenes between the cultural
factors and customer satisfaction.
Table 2 Correlations between Cultural Dimension Scores and Customer Satisfaction

PDI IDV MAS UAI

Mobile Terminal 0.040 (0.496) 0.056 (0.347) 0.069 (0.240) -0.061 (0.307)

High Mobile Carrier 0.041 (0.481) 0.040 (0.490) -0.010 (0.873) -0.091 (0.118)

Switching Hair Salon -0.089 (0.130) 0.099 (0.090) 0.024 (0.693) -0.031 (0.599)
Costs Bank 0.018 (0.757) -0.151 (0.009) 0.039 (0.532) 0.065 (0.263)

Average -0.008 (0.883) 0.009 (0.879) 0.059 (0.305) -0.028 (0.623)

TV 0.000 (0.997) 0.035 (0.559) 0.040 (0.495) 0.127 (0.031)

Low PC -0.107 (0.073) 0.023 (0.701) 0.054 (0.356) -0.068 (0.254)

Switching Shampoo -0.039 (0.518) 0.071 (0.242) -0.088 (0.133) 0.069 (0.252)
Costs Portal Site 0.007 (0.911) -0.018 (0.775) 0.096 (0.095) -0.021 (0.734)

Average -0.052 (0.360) 0.051 (0.369) 0.046 (0.418) 0.056 (0.326)

All Products/Services -0.017 (0.413) 0.019 (0.366) 0.029 (0.170) 0.002 (0.937)

PDI: Power Distance, IDV: Individualism, MAS: Masculinity, UAI: Uncertainty Avoidance

figure in parenthesis represents p-value (two sided)


Accordingly, all samples were stratified into two groups by switching costs, and then
correlations between customer satisfaction and uncertainty avoidance and individualism were
analyzed. Correlation coefficient between customer satisfaction and uncertainty avoidance was r =
-0.055 (p = 0.054) for the high-switching-costs group and r = 0.038 (0.220) for the low-switching-
costs group. Correlation coefficient between customer satisfaction and individualism was r =
0.063 (p = 0.029) for the high-switching-costs group and r = 0.026 (p = 0.402) for the low-
switching-costs group. For the high-switching-costs group, both uncertainty avoidance and
individualism are significantly correlated with customer satisfaction.
Furthermore, regression analysis was carried out using customer satisfaction as the dependent
variable and the four cultural dimensions and variety seeking as explanatory variables to the
stratified data by switching costs. As can be seen from Table 3, the results for the high-switching-
costs group indicate that the partial regression coefficient for individualism is significantly positive
and uncertainty avoidance is significantly negative. However, for the low-switching-costs group,
no significant variable remained after the backward selection process.
Only in the high-switching-costs group, these results lend support to Hypothesis 1 which
predicts that customer satisfaction is higher for weak-uncertainty-avoidance and high-individualism
individuals though explanatory power is marginal, which is consistent with the aggregate-level
results. It should be noted that Hypothesis 1 does not solely hold true but switching costs
moderates the relationship between culture and customer satisfaction.
Table 3 Multiple Regression Results of Customer Satisfaction with Cultural Dimension Scores

Explanatory High Switching Costs Low Switching Costs

Variable β t-value p-value β t-value p-value


IDV 0.057 1.967 0.049 - - -
UAI -0.048 -1.673 0.095 - - -
R2 = 0.008, adjusted R2 = 0.005
Method: Backward Selection, Dependent Variable: Customer Satisfaction; Explanatory Variable: Power Distance,

Individualism (IDV), Masculinity, Uncertainty Avoidance (UAI), and Variety Seeking

With respect to sample variability, aggregate customer satisfaction data is the result of averaging
tens of thousands of people therefore individual differences are balanced out. Culture also differs
among individuals but it is cancelled out after aggregation processes. On the other hand, this sort
of individual-level study cannot avoid influence of individual variance, which probably resulted in
the low explanatory power of the results. However, the results of regressing customer satisfaction
with the cultural factors and customer characteristics (gender, age, and occupation) and
product/service type as dummy variables proved that the effect of cultural factors are far stronger
than customer characteristics in the high-switching-costs group.
To further increase the precision of the analysis, the same regression analyses with Table 3 were
carried out after stratifying all the high-switching-costs samples by gender, age, and occupation.
As can be seen from Table 4, the gender-segregated results indicate that the regression coefficient
for uncertainty avoidance is significantly negative in the group of male, and individualism is
significantly positive in the group of female. In the age-separated results, the regression coefficient
for uncertainty avoidance is significantly negative in the group younger than 30s, and individualism
is significantly positive in the group older than 40s. The results of the analysis for the groups
separated by occupation suggested a negative effect of uncertainty avoidance for the student group
and a positive effect of individualism for the working people group. The explanatory power was
improved to be one digit higher in these results than the results in Table 3.
Table 4 Multiple Regression Results Separately Conducted for each Customer Characteristics

(All Products/Services Included, for High-switching-costs Group)

Gender Age Occupation


Male Female Under 30s Over 40s Student Working People
Explanatory
t-value t-value t-value t-value t-value t-value
Variable β β β β β β
p-value p-value p-value p-value p-value p-value
3.263 1.803 2.367
IDV - - 0.161 - - 0.157 - - 0.150
(0.001) (0.074) (0.019)
- -3.237 - -2.363 -2.135
UAI - - - - -0.094 - -
0.195 (0.001) 0.094 (0.018) (0.033)
R2 0.041 0.026 0.009 0.025 0.009 0.022
2
Adjusted R 0.033 0.023 0.007 0.017 0.007 0.018
Method: Backward Selection, Dependent Variable: Customer Satisfaction, Explanatory Variable: Power Distance,

Individualism (IDV), Masculinity, Uncertainty Avoidance (UAI), and Variety Seeking

Similar to the previous analyses, the negative effect of uncertainty avoidance can be observed in
the results for each product or service. For example, the coefficient for uncertainty avoidance is
negative and significant for mobile carrier and hair salon. On the other hand, such tendency was
not found in the results for TV and PC therefore switching costs which are inherent in the
product/service may also be relevant to the culture-satisfaction relationship.
From the results of the analyses, it was found that customer satisfaction is negatively influenced
by uncertainty avoidance and positively influenced by individualism in cases in which switching
costs is high and switching costs has a role as a moderator of the culture-satisfaction association.
Although explanatory power is marginal, the effect of cultural factors on customer satisfaction is
much stronger than customer characteristics.
5. The Consequences to Repurchase Intent
In order to test Hypothesis 2, the association between the cultural dimension sIn order to test
Hypothesis 2, the association between the cultural dimension scores and variety seeking was
analyzed in the first place. As the variety seeking score, a factor analysis was conducted to the
results of the two relevant questions (with a cumulative percent variance explained of 0.751), and
the first factor score was used. Similar results were obtained from the subsequent analysis when
the average score of the two items was used instead of the factor score. Variety seeking is
positively correlated with individualism (r = 0.159, p = 0.005), negatively correlated with
uncertainty avoidance (r = -0.136, p = 0.017), and positively correlated with masculinity (r = 0.096,
p = 0.089), but not correlated with power distance. Table 5 presents the results of regressing
variety seeking with the four cultural factors using the backward selection method. Similar to the
results of correlation analysis, the negative effect of uncertainty avoidance and the positive effect of
individualism and masculinity can be observed, which supports Hypothesis 2.
Subsequently, a regression analysis by backward selection was carried out using repurchase intent
as the dependent variable and variety seeking, switching costs, and customer satisfaction for each
product/service and for their total. As can be seen from Table 6, in the results for all products and
services, one can observe positive regression coefficient for customer satisfaction and switching
costs and a negative coefficient for variety seeking. These results indicate that repurchase intent is
high under the condition that customer satisfaction and switching costs is high and variety seeking is
low.
In the regression results for each product/service, customer satisfaction has a highly significant,
positive coefficient in all models. The regression coefficient for switching costs was positive and
significant in the seven models except bank. Variety seeking has a significantly negative
coefficient in the results for hair salon, portal site, and bank. These results correspond to
Hypothesis 3 which predicts that variety seeking has a negative effect on repurchase intent but the
magnitude of the impact differs by a product/service.
Table 5 Multiple Regression Results of Variety Seeking with Cultural Dimension Factors Scores

Explanatory Variable β t-value p-value (two-sided)


UAI -0.177 -2.817 0.005
IDV 0.105 1.816 0.070
MAS 0.153 2.465 0.014
2
R = 0.056, Adjusted R2 = 0.046
Method: Backward Selection, p-value: two sided, β: Standardized Regression Coefficient

Table 6 Multiple Regression Results of Repurchase Intent

Explanatory All Products Mobile Mobile


TV PC Shampoo Hair Salon Portal Site Bank
Variable /Services Terminal Carrier
Customer β 0.475 0.393 0.455 0.620 0.479 0.466 0.552 0.497 0.519

Satisfaction p-value 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

β 0.221 0.213 0.207 0.148 0.201 0.161 0.145 0.148


Switching Costs
p-value 0.000 0.000 0.000 0.001 0.000 0.002 0.004 0.004

β -0.049 0.093 -0.115 -0.188 -0.163


Variety Seeking
p-value 0.005 0.066 0.013 0.000 0.001

Adjusted R2 0.309 0.223 0.249 0.429 0.289 0.264 0.383 0.305 0.290

Method: Backward Selection, p-value: two sided, β: Standardized Regression Coefficient

To further the examination whether switching costs has a moderating effect also on the
satisfaction-intent or variety-intent relationship, regression analysis of repurchase intent was carried
out to the data stratified by switching costs. From result of regressing repurchase intent with
customer satisfaction, a strong positive effect of customer satisfaction was confirmed in both high-
and low-switching-costs group. The regression result with variety seeking also suggested a
significant negative effect on repurchase intent in both groups. From these results, switching costs
do not work as a moderator on the relationship between customer satisfaction and repurchase intent
or on the relationship between variety seeking and repurchase intent relationship, unlike its
moderating effect on the culture-satisfaction association. Rather, it only works as an explanatory
variable of repurchase intent as shown in Table 6.

6. Discussion
On the basis of the previous results of correlation and regression analysis, this section attempts to
establish an overall model incorporating the cultural factors, variety seeking, switching costs,
customer satisfaction, and repurchase intent. The structural equation model proposed in Error!
Reference source not found. was tested by AMOS 5 (Analysis and Modeling of Optical Systems).
Overall goodness of fit in this model was as follows: χ2 = 633.6,d.f. = 74,GFI = 0.962,AGFI =
0.946,RMSEA = 0.057. While GFI, AGFI, and RMSEA indicate acceptable fit, the model was
rejected by chi-square test. However, Kano (1997) argued that appropriate indicators of goodness
of fit depend on number of sample: χ2 approximation is not enough when the number of sample is
small, while a model is almost inevitably declined for enormous number of sample. χ2 is suitable in
case the number of sample is around several hundred, while GFI or CFI should be applied when the
number of sample is around 10,000. According to his argument, GFI, AGFI, and RMSEA should
be prioritized as the number of sample used in the analysis is 2286, and then the goodness of fit
would be acceptable though not completely supported. In addition, the same analysis was
conducted for each product/service and the results suggested that χ2 ranges from 119.3 at minimum
to 193.9 at maximum (d.f. = 74), and GFI was over 0.90, AGFI around 0.90, and RMSEA under
0.080 for all products/services, which supports high degree of fit for the models.
As can be seen from Figure 3, the standardized estimate for the relationship between the cultural
factor (composed of individualism and uncertainty avoidance) to variety seeking is significantly
positive, and the same is observed for every product and service. Though the path from the cultural
factor to customer satisfaction is not significant, this is due to the moderating effect of switching
costs as explained above (this moderating effect is illustrated as the dotted line drawn from
switching costs to the culture-satisfaction relationship in Figure 3). Accordingly, the model was
constructed separately for high-switching-costs group and low-switching-costs group. In the results
for the high-switching-costs group, there is a highly significant, positive effect of the cultural factor
on customer satisfaction. The path coefficient onto the cultural factor from individualism is
positive and from uncertainty avoidance is negative, and the cultural factor has a positive effect on
customer satisfaction, which means a positive effect of individualism and a negative effect of
uncertainty avoidance on customer satisfaction. These results correspond to the results obtained in
the last section. In addition, the path coefficient from variety seeking to repurchase intent was
significant in the models for portal site and bank. Moreover, customer satisfaction and switching
costs has a significantly positive impact on repurchase intent, and the same was confirmed from the
results for each product/service.

High-switching-costs group: 4.72 (0.007)

Low-switching-costs group: -1.10 (0.466)

UAI1: Uncertainty Avoidance (C10), UAI2: Uncertainty Avoidance (C11), IDV1: Individualism (C4),

IDV2: Individualism (C5), Variety1: Variety Seeking (B1), Variety1: Variety Seeking (B2)
Figure 3. Structural Equation Model of the Relationship between Cultural Factors, Variety Seeking, Switching
.

Costs, Customer Satisfaction, and Repurchase Intent


7. Conclusions
This paper has revealed that the individual-level cultural factors and values do affect customer satisfaction and
repurchase intent, which is similar to the aggregate-level results. The moderating effect of switching costs on
the culture-satisfaction relationship was detected, and for a high-switching-costs group, support was found for the
hypothesis that customer satisfaction is negatively influenced by uncertainty avoidance and positively influenced
by individualism. Equally important was the finding that, repurchase intent is negatively influenced by variety
seeking, in addition to the known influence of customer satisfaction and switching costs.
These findings have an implication for product development and marketing practice. Although it is difficult to
control individual’s culture or value, considering customer segments defined by the levels of individualism and
uncertainty avoidance would be effective in product design or marketing strategy. More specifically, such
customer retention strategy realized by increasing switching costs of a product/service may not work for high-
individualism customer group, and for strong-uncertainty-avoidance customer group an adverse effect – lowering
customer satisfaction – will possibly be caused.
Therefore research is needed to understand the entire mechanism of how the cultural factors (which is not
controllable by companies) and customer characteristics (which can be manipulated by marketers) influences
satisfaction and repurchase. In this regard, this questionnaire survey was limited in terms of sample distribution
as it was centered around students residing in metropolitan area of Japan. With respect to differences in
uncertainty avoidance by customer characteristics, it is higher for women than men, over 40s than under 30s, and
working people than students. Future studies may consider wider range of age or occupation, and above all, a
primary future challenge is further examination of regional difference in parallel with aggregate-level results
based on cultural difference. While switching costs was measured based on interpretation that it is an individual’s
perception rather than inherent in the industrial characteristics, it could be measured using more objective
methodology. Implementation of the survey methodology will foster the understanding of overall mechanisms
underlying the cultural context.

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