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Conceptual review of consumer satisfaction theories with expectation-confirmation and disconfirmation paradigm for business sustainable growth and decision making

[version 1; peer review: 1 approved with reservations]
PUBLISHED 21 Nov 2024
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Abstract

Consumer satisfaction is an outcome of business marketing activities, bridging the buying and usage phases with subsequent consequences such as attitude changes, recurring purchases, and brand loyalty. Most studies have utilized variations of the disconfirmation paradigm, which posits that satisfaction is influenced by the degree and type of disconfirmation experienced and initial expectations. Despite the importance of satisfaction, there remains a paucity of evidence on the cause and effect leading to expectation-confirmation and disconfirmation paradigm.

This paper explores the reasons and the key factors in the perspectives of the relevant literature and aims to identify the intention of confirmation and disconfirmation in satisfaction theories. This conceptual paper also suggests various critical analyses based on the arguments for and against the paradigm in customer satisfaction. Consequently, the paper seeks to examine existing gaps in the literature regarding customer satisfaction theories for business sustainability and decision making, which may need to be more concise in the satisfaction generation process.

Keywords

sustainable growth, decision making, customer satisfaction, confirmation, disconfirmation, consumer behavior

Introduction

Customer satisfaction has reached its lowest point in the past two decades globally, and despite efforts and investments in customer experience tools, satisfaction continues to decline (Hult & Morgeson, 2023). Customer satisfaction plays a pivotal role in influencing purchasing decisions and ensuring customer loyalty. This satisfaction is inherently subjective, shaped by emotions or thoughts, and influenced by factors such as product performance, consumer experiences, and expectations, all within specific circumstances (Giese & Cote, 2002; Yüksel & Yüksel, 2001; Rahman et al., 2017).

Satisfaction is affected by the extent and direction of disconfirmation, which occurs when there is a difference between initial expectations and actual outcomes (Mittal et al., 2023; Murray, 1938; Pillai, 2021; Siu et al., 2016; Yeh et al., 2017; Ali et al., 2016; Lee & Yun, 2015; Jayasankaraprasad & Kumar, 2012; Surprenant & Churchill, 1982). Disconfirmation paradigm is central to understanding consumer satisfaction.

Various studies have shown that expectations can be positively disconfirmed when product performance exceeds expectations, resulting in satisfaction, or negatively disconfirmed when performance falls short, leading to dissatisfaction (Mittal et al., 2023; Ali et al., 2016; Lee & Yun, 2015). Positive customer satisfaction is linked to beneficial outcomes such as customer retention, positive word of mouth, increased spending, and favorable pricing. At the firm level, this translates to improved product-market performance, accounting performance, and financial-market success (Mittal et al., 2023). The expectation-confirmation and disconfirmation paradigm offers a valuable framework for analyzing consumer experience formation and evaluation (Oliver & Winer, 1987; Spreng et al., 1996).

The purpose of this research, therefore, is to find out the various causes and influential factors and deepen the understanding of the expectation-confirmation and disconfirmation paradigm as a framework for customer satisfaction. The research explores the bases of consumer expectations formation before purchasing a product or service and the consistency of consumer responses to disconfirmation, examining whether satisfaction or dissatisfaction arises when perceived performance deviates from expectations. By addressing these issues, the paper seeks to provide insights into how businesses can better align their offerings with consumer expectations, thereby enhancing customer satisfaction and loyalty.

The adaptation level theory

In the assessment of satisfaction, the combined impact of expectation and perception of discrepancy can be significant, especially when the consumer needs and wants are examined in relation to the formation of a reference identity, which is then used for comparative evaluation (Vedadi et al., 2013; Oliver, 1980). Outcomes that go below expectations are typically evaluated as being below their benchmark. Nevertheless, in cases where the result surpasses expectations (positive disconfirmation), it is assessed as superior to the standard point of reference (Oliver, 1980). Quinsey (1970) defines the adaptation level as the point at which perception becomes neutral or indifferent. This occurs because the perceived magnitude of a stimulus decreases as it gets closer to the Adaptation Level. Stimuli above the Adaptation Level elicit different judgments or responses compared to stimuli below the Adaptation Level, which produce opposite results. When people encounter new stimuli, their judgments of these stimuli will typically influence their previous experiences with similar objects. The perceived difference between the new and previous stimulus will determine how satisfied individuals are with the new stimulus (Pillai, 2021; Siu et al., 2016; Yeh et al., 2017).

These have an interplay with three factors: the perception of the stimulus, context, and psychological and physiological qualities of a particular structure. Once established, the “adaptation level” will persist in an individual’s initial position to guide their subsequent evaluations, regardless of whether they are focused on any aspects (Siu et al., 2016; Yeh et al., 2017). The end assessment of an individual’s judgment will only be altered by significant impacts on the adaption level (Vedadi et al., 2013; Khalifa & Shen, 2005). In assessing satisfaction, one might use a person’s expectations regarding the performance of a product as their adaption level (Khalifa & Shen, 2005). These factors include the individual’s experience with the product and other identifying elements, promotional attributes of the sales assistant, and qualities such as persuasive power and perceptual distortion. The adaption stage can also affect the customer’s repurchase choice, which determines how much the product exceeds, meets, or falls short in any expectations (Vedadi et al., 2013; Pillai, 2021). The Adaptation Level Theory offers valuable insights into how individuals perceive stimuli and assess satisfaction, taking into account both their expectations and contextual factors.

Adaptation Level Theory offers valuable insights into the dynamic nature of customer satisfaction and the importance of relative comparisons and expectation management. However, several unresolved issues, including the subjectivity of adaptation levels, measurement challenges, cultural differences, and the role of emotions and technology, necessitate further research and refinement of the theory to enhance its applicability in the modern business landscape. Addressing these issues can help businesses better understand and predict customer satisfaction in an ever-evolving market.

The contrast theory

The theory serves as the foundation for establishing precise assertions regarding the connection between effort, expectation, and evaluation (Dahl & Dunn, 2012; Yeh et al., 2017). According to Cardozo (1965), contrast theory suggests that when a customer receives a goods that is of lower value than expected, they would carefully examine the discrepancies between the obtained goods and their expectations. The evaluation may also result in potential consumer amplification of the discrepancy (Yeh et al., 2017). In this context, emphasis on individuals’ ability to differentiate favorable or unfavorable products will have an impact on their original expectations. This can lead to a shift in their evaluation away from their expectations if their expectations are not aligned with the effort.

Consumer or customer effort refers to the somatic, cognitive ability, or monetary resources that are required to acquire a specific product (Vedadi et al., 2013; Pillai, 2021) and in line with that, empirically revealed disparity while comparing ballpoint pens with catalogs featuring products of varying quality (poor or high). The respondents were presented with catalogs in order to establish both low and high expectations regarding a pen. Subsequently, the participants were assessed based on the caliber of a pen that differed from the pen depicted in the catalog. The endeavor was also influenced by an enhanced shopping experience (Cardozo, 1965). In addition, study findings corroborate the notion that individuals who invest minimal effort in obtaining a product that falls short of their expectations tend to evaluate the product less favorably compared to those who anticipated and received the same goods. Furthermore, in the treatment group, individuals who received a lower quantity than anticipated assessed the product less favorably in comparison to those who received the predicted amount. The findings of this research study align with the contrast theory, which suggests that individuals who had their expectations negatively disconfirmed rated a reward as less favorable compared to those whose expectations and outcomes were congruent (Vedadi et al., 2013; Pillai, 2021).

According to contrast theory, when the actual performance of a product or service does not fulfill a customer’s expectations and criteria, the customer will exaggerate the difference between what they expected and what they received (Danijela et al., 2015). As a result, customers may overstate the difference when the actual performance of the product or service falls short of their expectations, which is known as negative disconfirmation. Moreover, when customers encounter negative disconfirmation, they interpret the performance as falling short of their expectations. However, there is a potential for exaggerating the disparity, leading to a perception that it is even more severe than it actually is (Danijela et al., 2015). The contrast theory illuminates how customers evaluate products by taking into account the interplay between effort, expectations, and actual performance. Furthermore, it recognizes the potential for exaggerating discrepancies in their assessments.

Contrast Theory provides valuable perspectives into consumers’ strong reactions when their expectations are unmet, emphasizing the importance of expectation management and accurate marketing. However, several unresolved issues, such as the degree of expectation deviation, individual and cultural differences, long-term effects, and the role of moderating variables, require further exploration. Addressing these issues can enhance the applicability of contrast theory in understanding and managing customer satisfaction in a dynamic market environment.

The assimilation contrast theory

Assimilation can be defined as the overall thoughts of activity integrating new into the existing pool of attitudes to prevent conflicting beliefs. Sherif and Hovland (1961) introduced this concept in their Social Judgment theory, stating that a person forms evaluation and may alter their attitudes when they compare new stimuli to their existing internal range. When the responses deviate from the internal range, a grid line of rejection occurs. Affirmation will happen when responses resemble the person’s inner quality. Apart from that, indifference arises when the responses are dissimilar or when a distinct difference is recognized (Sherif & Hovland, 1961).

According to Lanktan and McKnight (2012), the assimilation contrast hypothesis suggests that assimilation occurs when the comparison falls within a specific range of acceptance. This implies that the individual will perceive the new stimulus as more closely aligned with their existing ideas than the actual reality. Consequently, this will result in the assimilation of the new information into the individual’s preexisting views. If the differentiation falls within the grid line of rejection, the opposite is bound to occur. In this case, there will be a contrast, and the individual will see the new stimuli as being more distinct from their own ideas. As a result, rejection will occur (Lanktan & McKnight, 2012).

Assimilation occurs when an idea aligns with a person’s existing attitude, causing them to distort the information to make it more similar to their current beliefs. On the other hand, contrast arises when a thought differs significantly from one’s own, leading to a distorted perception of a more significant gap. However, if a message closely aligns with a person’s beliefs or opinions, it is considered to have a significant impact (Peyton et al., 2003; Kokthi & Kelemen-Erdős, 2018).

Numerous studies have demonstrated that end users’ impressions of a product’s attributes tend to align with their expectations, supporting the assimilation effect. This validates the existence of specific ranges or boundaries within which consumers either accept or reject their perception of a product (Anderson, 1973). When the consumer’s expectations and actual product performance differ, they tend to associate the product with their expectations rather than performance. However, if the difference is significant and falls within the zone of rejection, the contrast effect occurs. In such cases, end users typically scrutinize the details of the disparity between the product and their expectations (Danijela et al., 2015; Peyton et al., 2003).

In a similar vein, Kokthi and Kelemen-Erdős (2018) conducted research to explore the impact of branding on customer decision-making, specifically focusing on two well-known brands: Brand A and Brand B. They employed the assimilation-contrast method to analyze how brand information influences consumer perceptions. During three specific scenarios, study participants expressed their preferences for Brand A and Brand B products. Interestingly, in a blind taste test, customers couldn’t discern a significant difference between the two products. However, in a label test, Brand B outperformed Brand A, indicating a stronger preference for the Brand B. This study suggests that brand information, often through labels, can either confirm or challenge buyers’ expectations. Notably, when customers received complete information, including brand labels, Brand A received higher preference ratings, highlighting the influence of brand information on consumer preferences. The Assimilation-Contrast Theory sheds light on the relationship between brand information and consumer perceptions, while the disconfirmation paradigm also plays a role in shaping these decisions. The theory provides insights into how brand information impacts consumer decisions. The theory has a contrasting effect on the alignment of expectations and perceptions, the role of cognitive dissonance, and the impact of marketing on managing customer expectations, which leads to the issues of complexity of defining the latitude of acceptance, the challenges in measuring expectations and perceptions, the level of consumer experiences, and the interplay with other consumer behavior theories. Additionally, the theory’s limits on emotional factors, the influence of social and digital media, and cross-cultural validity for customer satisfaction.

The cognitive dissonance theory

The cognitive dissonance theory suggests that when there is a difference between a consumer’s expectations and the actual performance of a product, the consumer will adjust their perception of the product to align with their expectations. This adjustment can involve lowering their expectations or assimilating their perception to a more general or less conflicting level (Hamza & Zakkariya, 2012; Hasan & Nasreen, 2012). Additionally, Anderson (1973) supports this claim using Festinger’s theory of cognitive dissonance. Cognitive dissonance refers to the emotional pain experienced when a product’s outcome contradicts a consumer’s existing beliefs or expectations. This can be similarly interpreted as the psychological discomfort experienced when the consumer has a different conception regarding a belief or point of view, leading to a desire for consistency or harmony (Kotler & Keller, 2009; Bose & Sarker, 2012).

Further to the above, cognitive dissonance theory posits that individuals possess both cognitive and emotional aspects, and it refers to a psychological phenomenon that occurs when there is a mismatch between an individual’s beliefs and the resulting outcomes, which challenges their beliefs (Solomon, 2020). According to the hypothesis, when a person’s thoughts or beliefs are conflicting, they will attempt to minimize the conflict, specifically by reducing the feeling of discomfort after buying a specific product (Costanzo, 2012). The presence of these conflicting features stimulates cognitive dissonance, prompting individuals to seek a state of harmony and alleviate psychological tension (Solomon, 2020; Pillai, 2021).

There are three situations that might lead to cognitive dissonance: First, encountering a logical inconsistency. Second, when a person’s prior behavior, attitudes, beliefs, and their current surroundings do not align. Third, when a person’s positive belief is proven wrong (Solomon, 2020; Pillai, 2021). Cognitive dissonance theory explains how individuals reconcile conflicting beliefs and perceptions, impacting their satisfaction and decision-making processes.

Cognitive Dissonance Theory explains that individuals experience psychological discomfort (dissonance) when holding contradictory beliefs or attitudes, influencing post-purchase behavior and customer satisfaction. Key arguments include post-purchase rationalization, where consumers seek positive information to justify their decisions, and the role of marketing in reinforcing satisfaction by aligning messages with consumer beliefs. Unresolved issues include challenges in measuring dissonance, understanding its evolution over time, and considering individual differences and cultural variations. Additionally, the theory’s focus on cognitive aspects overlooks emotional factors, and the impact of social media on amplifying dissonance through diverse opinions remains underexplored. Integrating these insights with other consumer behavior theories could provide a more comprehensive understanding of customer satisfaction.

The comparison level theory of satisfaction

Customer satisfaction is measured by comparing the purchase outcome to a benchmark known as the Comparison Level (CL). When a specific result exceeds the CL, it is referred to as a positive discrepancy event, which can be regarded as satisfactory (Solomon, 2020; Pillai, 2021; Oshikawa, 1968). Conversely, if the outcomes go below the Comparison Level, they are considered negative disparities and are seen as dissatisfying. The theory posits that the parallel resemblance is measured by averaging the main results divided by comparable interactions experienced by the consumer (Pillai, 2021; Oshikawa, 1968; Kelley & Thibaut, 1978). With these, it can be proposed that the consumer is aware of the results; however, they have yet to personally experience and encompass outcomes achieved by others who have had similar experiences. There are three main elements in considering CL: first, the outcomes that an individual has personally experienced; second, the outcomes of others who have had similar experiences; and finally, the distinctive expectations that are formed in the individual’s current interaction (Kelley & Thibaut, 1978).

The Comparison Level theory offers valuable insights into how customers assess their experiences by considering relative outcomes and expectations. It recognizes that satisfaction is contingent upon context and influenced by both individual and observed interactions. Comparison Level Theory offers a valuable framework for understanding customer satisfaction through the lens of expectations and social influences. However, unresolved issues such as measuring subjective and dynamic comparison levels, integrating with other theories, addressing cultural differences, managing the impact of digital media, and incorporating emotional factors highlight the need for further research. Addressing these gaps can enhance the theory’s applicability and provide deeper insights into consumer behavior and satisfaction (Khongorzul et al., 2022).

The value percept disparity theory

Value Percept Disparity Theory emphasizes that contentment or dissatisfaction triggers a cognitive-evaluative process (Locke, 1967). This involves comparing an individual’s perceptions of a specific object or beliefs about an activity with their personal values—representing their needs, wants, and desires (Solomon, 2020; Kotler & Keller, 2009). It demonstrates that when an object or activity closely aligns with an individual’s values, it is positively evaluated (Westbrook & Reilly, 1983).

Conversely, when there is a significant disparity between the perceived value and actual worth, the evaluation becomes less favorable. This discrepancy leads to a decrease in positive emotions and an increase in negative emotions associated with the experience of discontent (Solomon, 2020; Murray, 1938). The theoretical system must satisfy three essential characteristics: the perception of product, institution, or marketplace behavior, alignment with the consumer’s value standards, and judgment regarding the relationship between the consumer’s perception and value system (Murray, 1938). In reference to this, views of products, companies, or marketplace behaviors are assessed based on the consumer’s level of value (Alkilani et al., 2013; Murray, 1938).

The perception of value plays a critical role in molding consumer behavior and affecting the choices they make when purchasing goods or services. Comprehending the perceived value is crucial for organizations to fulfill and surpass customer expectations. Perceived value is typically composed of various elements, such as functional, emotional, and social advantages (Sweeney & Soutar, 2001). Customers evaluate the entire worth of a product or service by taking into account how effectively it fulfills their practical requirements, the emotional gratification it offers, and the potential social status it may bestow.

The Value Percept Disparity Theory examines how consumers assess their happiness with a transaction by comparing their expectations before making the purchase with their experiences after making the buy. By acquiring a deep understanding of various perspectives, firms may customize their products and interactions to more closely match customer expectations, hence improving overall happiness. Gaining insight into the determinants of perceived value enables organizations to develop more efficient marketing tactics. Businesses may distinguish themselves from the competition and connect with consumers on a deeper level by emphasizing their distinctive advantages and value propositions. Resolving discrepancies between client expectations and their actual experiences can improve customer satisfaction and foster loyalty. Additionally, it can cultivate favorable word-of-mouth and advocacy, thereby enhancing the brand’s market position (Yi, 1990). The Value Percept Disparity Theory guides organizations in enhancing perceived value, addressing customer expectations, and fostering loyalty.

Value Percept Disparity Theory offers valuable insights into customer satisfaction by emphasizing the importance of perceived value relative to expectations. Key arguments include the multidimensional nature of value, the impact of individual differences, and the role of marketing in shaping value perceptions. However, unresolved issues such as measuring perceived value, understanding its dynamics, addressing cultural and contextual factors, integrating with other theories, considering emotional influences and the impact of digital and social media highlights the need for further research. Addressing these gaps can enhance the theory’s applicability and provide deeper insights into consumer behavior and satisfaction.

Generalized negativity theory

The generalized negativity theory suggests that negative experiences or under-fulfillment of expectations substantially impact customer satisfaction more than positive experiences (Szymanski & Henard, 2001; Hayden, 2014). This theory argues that customers are more likely to remember and share negative experiences whereby these customers share their dissatisfaction with others, which can cause negative word-of-mouth and harm the company’s reputation (Tsai et al., 2014; Ferguson & Johnston, 2011). This theory posits that negative experiences or under-fulfillment of expectations have a stronger influence on customer satisfaction than positive experiences (Ferguson & Johnston, 2011; Uzir et al., 2020). Accordingly, customer satisfaction is a consumption-related fulfillment response ranging between perfect and over-fulfillment levels.

Typical manifestations of customer satisfaction are pleasure, delight, contentment, and relief. Under-fulfillment of expectations is believed to cause customer dissatisfaction. The formation of customer satisfaction requires at least a minimum amount of direct experience with a product or service (Ferguson & Johnston, 2011). The expectancy/disconfirmation paradigm is commonly used to study customer satisfaction and includes four constructs: expectations, performance, disconfirmation, and satisfaction. The generalized negativity theory in customer satisfaction suggests that negative experiences or under-fulfillment of expectations have a more substantial impact on overall satisfaction than positive experiences (Uzir et al., 2020). The theory maintains that dissatisfaction is more salient and impactful than satisfaction, and customers are more likely to express their dissatisfaction and spread negative feedback (Ji & Liu, 2020; Laczniak et al., 2001). Understanding and addressing negative experiences are crucial for maintaining customer satisfaction and reputation.

Generalized negativity theory provides the effect of negative experiences on customer satisfaction. However, it is essential to address its arguments and unresolved issues to develop a more comprehensive understanding of customer satisfaction dynamics. Balancing the focus on negativity with the promotion of positive experiences, integrating insights from positive psychology, and considering contextual and individual differences can enhance the applicability and robustness of Generalized negativity theory in a rapidly evolving consumer landscape. Addressing these challenges will help create more effective strategies for managing customer satisfaction and fostering positive customer relationships.

Hypothesis testing theory

Hypothesis testing theory is a statistical method used to make inferences about a population based on sample data (Hasibuan, 2020). In the context of customer satisfaction, hypothesis testing theory involves formulating research hypotheses and conducting statistical tests to determine if there is a significant relationship between variables (Duca, 2022). For instance, in the case of customer satisfaction, the null hypothesis (Ho) could be that there is no relationship between the level of customer satisfaction and buying behavior, while the alternative hypothesis (H1) could be that there is a significant relationship. Data on customer satisfaction levels and buying behavior will be collected to test this hypothesis and subsequently be analyzed using appropriate statistical tests, such as regression analysis, to determine if there is evidence to support or reject the null hypothesis.

The importance of hypothesis testing theory in customer satisfaction lies in its ability to provide empirical evidence and support for any insights or claims about the relationship between variables such as customer satisfaction and buying behavior (Yang et al., 2018). Researchers can validate their theories and make informed decisions based on statistical evidence by conducting hypothesis testing. Furthermore, hypothesis testing theory allows for the identification of causal relationships between variables. This is important because understanding the factors that drive customer satisfaction and influence buying behavior can contribute to marketing strategies, product development, and overall business success (Busse & August 2021). Compared to other customer satisfaction theories, hypothesis testing theory provides a more rigorous and objective approach to understanding the relationship between customer satisfaction and buying behavior. Other customer satisfaction theories may rely on qualitative research methods or anecdotal evidence, which can be more subjective and prone to bias (Chen & Liu, 2013).

In contrast, this theory utilizes statistical techniques to analyze data and draw conclusions based on evidence. Overall, hypothesis testing theory is crucial in customer satisfaction research because it provides a systematic and data-driven approach to understanding the relationship between variables (Yang et al., 2018; Szymanski & Henard, 2001).

Using hypothesis testing, researchers can go beyond mere speculation and make evidence-based conclusions about the impact of customer satisfaction on buying behavior. The analysis of a nationally representative survey of 22,300 customers in Sweden in 1989-1990 revealed that satisfaction is best specified as a function of perceived quality and disconfirmation (Anderson & Sullivan, 1993). This suggests that when customers perceive high quality and experience a smaller gap between their expectations and the actual product or service performance, their satisfaction levels are higher (Szymanski & Henard, 2001; Lin, 2007; Yang et al., 2018; Chen & Chiu, 2018). Hypothesis testing theory enhances our understanding of the relationship between customer satisfaction and buying behavior, leading to informed business decisions.

The theory underscores the importance of managing customer expectations through accurate information and reliable performance, recognizing the role of disconfirmation in shaping satisfaction and understanding the impact of individual differences and dynamic expectations. By leveraging the insights from hypothesis testing theory, businesses can develop more effective strategies to meet and exceed customer expectations, ultimately enhancing satisfaction and loyalty. As the consumer landscape continues to evolve, adapting to the principles of hypothesis testing theory will be essential for sustaining competitive advantage and achieving long-term success.

Equity theory

Equity theory examines the fairness of the exchange between a customer and a business. The theory suggests that customers compare the ratio of their inputs (such as money, time, and effort) to the outputs they receive (such as product quality, service, and overall experience) with the ratios of others (Ruyter & Wetzels, 2000). If customers perceive an imbalance in this exchange, it can result in dissatisfaction and potentially influence their buying behavior (Lin, 2007). In a highly competitive market, understanding equity theory is essential for businesses striving to satisfy their customers and retain their loyalty. By aligning the inputs and outputs to create a fair and equitable exchange, businesses can drive customer satisfaction and positively influence buying behavior (Ihemeje et al., 2020).

Understanding the importance of equity theory in shaping customer satisfaction and buying behavior can provide businesses with valuable insights into attracting and retaining customers. By ensuring a fair and equal exchange, businesses can create a positive buying experience that leads to customer satisfaction and loyalty (Liu et al., 2008). Equity theory is a customer satisfaction theory in marketing that focuses on fairness. According to the theory, customers evaluate the fairness of their exchanges with a company based on the perceived balance between what they contribute (input) and what they receive (output) (Shao et al., 2009). This evaluation of fairness influences the customer’s overall satisfaction with the company and their future usage of its services (Ruyter & Wetzels, 2000). The theory suggests that if customers perceive an imbalance in the exchange, either in terms of high costs or inadequate benefits, they are likely to feel dissatisfied and may seek alternative options or disengage from the relationship with the company (Cugini et al., 2007). This theory suggests that companies should strive to create a sense of fairness and equity in customer interactions by aligning customer value with their expectations and treating all customers fairly and equally. Equity theory, as a customer satisfaction theory in marketing, emphasizes the importance of fairness in the exchange between customers and companies. By understanding and applying equity theory, marketers can enhance customer satisfaction by ensuring customers perceive a fair value exchange. Therefore, to optimize customer satisfaction, companies should provide customers with fair and balanced exchanges that align with their expectations (Davcik et al., 2015). Equity as a concept delves into the intricacies of customer-company interactions by examining the perceived balance between what the customer contributes and what they receive (Ruyter & Wetzels, 2000). It emphasizes the importance of fairness in these exchanges and sheds light on the consequences of perceived imbalances. When customers feel that the costs outweigh the benefits or vice versa, their satisfaction with the company is compromised, potentially leading them to explore alternative options or terminate their relationship with the company altogether (Terpstra & Verbeeten, 2014). Understanding equity theory helps businesses create fair interactions, enhance satisfaction, and build lasting customer relationships.

Perceived fairness in Equity Theory accurately measures equity perceptions, considers cultural differences, understands the impact of digital interactions, integrates with other theories, incorporates emotional factors, and adapts to customer empowerment trends to enhance the theory’s robustness and applicability. As businesses navigate an increasingly complex and dynamic consumer landscape, addressing these challenges will help ensure that perceived fairness remains a cornerstone of customer satisfaction strategies.

Perceived performance theory

The theory of perceived performance states that when a consumer’s expectations are ignored in their post-consumption or repeat purchase, a purchased service or product will perform in a very clear manner (Darawong & Sandmaung, 2019; Gandhi & Saini, 2013). It is inferred that consumer satisfaction evaluations are influenced mainly by perceived performance, regardless of prior expectations. This suggests that the perception of service/product quality alone is sufficient. The primary factor that determines pleasure is the performance of the service or product during consumption, without any comparison, which is generally known as “unapprised cognition” (Darawong & Sandmaung, 2019; Irfan, 2014).

Research has demonstrated that the perceived performance of a product or service is a crucial factor in determining customer satisfaction (Mohammed et al., 2017; Gottlieb and Beatson, 2018; Brown et al., 2008). Customer satisfaction is the subjective evaluation of how effectively a product or service fulfills the customer’s expectations. Research has indicated that customer satisfaction is influenced not just by the actual performance of a product or service but also by the customer’s expectations and their judgment of how well the product or service meets those expectations (Ganesh, 2023; Gottlieb and Beatson, 2018). The correlation between the quality of service and the perception of value is essential for comprehending customer satisfaction (Gottlieb and Beatson, 2018; Ganesh, 2023; Brown et al., 2008). Empirical research has continuously demonstrated that customer satisfaction is significantly impacted by the perceived performance of a product or service (Gottlieb and Beatson, 2018). Moreover, studies conducted in the restaurant sector have demonstrated that customer satisfaction is more closely linked to perceived performance rather than disconfirmation (Brown et al., 2008). Recognizing how perceived performance influences customer satisfaction is crucial for businesses to improve their overall reputation and cultivate customer loyalty.

The theory can be argued on the critical role of expectations, the impact of marketing and communication, and the use of feedback for continuous improvement. However, issues such as measuring perceived performance and expectations, cultural and contextual differences may have emotional and psychological concentration for further research. Addressing these gaps can enhance the theory’s applicability to consumer behavior and satisfaction.

Discussion

The focus of the review is presented with propositions that offer potential direction for future research. The review of the past studies indicates that there is a relationship between Expectation-Confirmation and Disconfirmation Paradigm in customer satisfaction theories to explain satisfaction formation. However, there are arguments for and against using this paradigm. The argument for the Expectation-Confirmation and Disconfirmation Paradigm is that it suggests that satisfaction is determined by the extent to which a product or service meets or exceeds pre-purchase expectations (Spreng et al., 1996). This paradigm assumes that individuals have specific expectations before purchasing a product or service, and their satisfaction is determined by whether those expectations are confirmed or disconfirmed. The argument against the Expectation-Confirmation and Disconfirmation Paradigm is that it oversimplifies the satisfaction formation process. Critics argue that satisfaction is a complex and multifaceted construct that cannot be solely explained by expectations and disconfirmation (Yüksel & Yüksel, 2001; Wirtz & Bateson, 1999). They believe other factors, such as individual motivations, emotions, and sociocultural contexts, also significantly shape satisfaction (Shirani et al., 2014).

The Adaptation Level Theory argues that satisfaction is influenced by a person’s adaptation level, which is their reference point for comparison (Spreng et al., 1996). This theory suggests that satisfaction is determined by pre-purchase expectations and a person’s adaptation to their current circumstances (Fournier & Mick, 1999). The Contrast Theory expands on this idea by emphasizing the role of the contrast between expectations and actual experiences in satisfaction formation (Ladhari, 2007). The Assimilation-Contrast Theory suggests that individuals may assimilate or contrast their experiences based on their initial expectations, influencing their satisfaction (Richardson, 1967). The Contrast Theory and Assimilation-Contrast Theory shed light on the role of cognitive processes in satisfaction formation. These theories emphasize how individuals may interpret their experiences based on their initial expectations, influencing their overall satisfaction. This highlights the intricate interplay between cognition and satisfaction, adding a layer of complexity to the understanding of customer satisfaction (Macieira et al., 2020).

As for the Value Percept Disparity Theory it suggests that satisfaction is influenced by the perceived difference between value received and value expected from a product or service (Sweeney & Soutar, 2001). Understanding the factors that shape this perception of value allows organizations to tailor their marketing strategies effectively, emphasizing the advantages of their offerings. By addressing inconsistencies between consumer expectations and actual experiences, businesses can enhance customer satisfaction and foster loyalty (Sánchez-Fernández & Iniesta-Bonillo, 2007). Additionally, recognizing the significance of post-purchase communication and assistance is crucial, as the consumer’s mental state after the purchase can impact future buying behavior and brand advocacy. Companies can leverage insights from this theory to differentiate their products or services from competitors by emphasizing unique value propositions that strongly resonate with consumers (Xu & Wyer, 2007).

The Cognitive Dissonance Theory proposes that satisfaction is influenced by the individual’s perception of the decision-making process and their post purchase rationalization (Fournier & Mick, 1999). The Comparison Level Theory of Satisfaction posits that individuals compare their satisfaction levels with a reference point or standard to evaluate their level of satisfaction (Jones et al., 2006). The Generalized Negativity Theory argues that satisfaction is influenced by individuals’ positive and negative experiences with a product or service. Their overall satisfaction is determined by the balance between these experiences (Spreng et al., 1996). The generalized negativity theory in customer satisfaction suggests that negative experiences or under-fulfillment of expectations influence overall satisfaction more than positive experiences (Thirumalai & Sinha, 2004). Negative experiences tend to have a stronger emotional impact and are more likely to be remembered and shared with others.

Hypothesis testing theory proposes that satisfaction is formed through hypothesis testing, where individuals compare their expectations with the actual outcomes and adjust their satisfaction accordingly (Biau et al., 2009; Mohammed et al., 2017). In context of Equity theory suggests that satisfaction is influenced by the perceived fairness of a transaction or exchange. In comparison, the Perceived Performance Theory posits that individuals form their satisfaction judgments based on their perceptions of the performance of a product or service (Pritchard, 1969).

Analyzing the importance of the cognitive dissonance theory, equity theory, and perceived performance theory offers valuable insights into satisfaction’s psychological and relational aspects. These theories underscore the importance of perceptions, fairness, and the actual performance of products or services in shaping satisfaction, expanding the scope beyond mere confirmation or disconfirmation of expectations (Pillai, 2021). As for the comparative level theory of satisfaction, it can possibly adapt to industrial applications where contentment is not an infinite occurrence. However, it is a relative determinant of customer experiences. Furthermore, it is contended that pleasure is ascertained by calculating the average of the benefits and drawbacks linked to an interaction and then comparing the outcome with the comparison level.

In marketing, the application of equity theory can significantly impact customer satisfaction. For instance, by aligning the value provided to customers with their expectations and ensuring that all customers are treated fairly and equally, companies can foster a sense of equity in their customer interactions (Nassè et al., 2020), particularly in terms of value proposition and value-driven strategy (Anand & Bansal, 2016). This, in turn, can lead to enhanced customer satisfaction and bolstered relationships between the company and its customers or consumers. To effectively optimize customer satisfaction, companies should focus on providing value to their customers and ensuring that their customers deem the perceived exchange of value fair and balanced (Shao et al., 2009). By incorporating equity theory into their marketing strategies, companies can actively assess and manage the fairness of their customer exchanges. This can be achieved through various means, such as transparent pricing strategies, effective value proposition communication, and responsive customer service. In addition, companies can also benefit from regularly assessing customer perceptions of fairness and actively addressing any perceived imbalances. In reference to perceived performance theory, empirical research has continuously demonstrated that customer satisfaction is significantly impacted by the perceived performance of a product or service (Gottlieb and Beatson, 2018). Studies conducted in the restaurant sector have demonstrated that customer satisfaction is more closely linked to perceived performance rather than disconfirmation (Brown et al., 2008; Gottlieb and Beatson, 2018).

Overall, the argument for Expectation-Confirmation and Disconfirmation paradigm in these theories emphasizes the importance of expectations and their fulfillment in determining satisfaction. The argument against these theories’ Expectation-Confirmation and Disconfirmation paradigm is that it may oversimplify the satisfaction formation process. For example, the Adaptation Level Theory suggests that satisfaction is not solely determined by pre-purchase expectations but also by a person’s adaptation to their current experiences and circumstances (Fournier & Mick, 1999). This argument highlights the limitations of the Expectation-Confirmation and Disconfirmation paradigm in fully capturing the complexity of satisfaction formation. The argument for Expectation-Confirmation and Disconfirmation paradigm in these theories emphasizes the importance of expectations and their fulfillment in determining satisfaction. It recognizes that customers have pre-purchase expectations, and their post purchase evaluations are based on the extent to which those expectations were met or exceeded (Yüksel & Yüksel, 2001). For example, the Adaptation Level Theory suggests that satisfaction is not solely determined by pre-purchase expectations but also by a person’s adaptation to their current experiences and circumstances. The argument for Expectation-Confirmation and Disconfirmation paradigm in these theories is that it provides a straightforward and logical explanation for how satisfaction is formed. While the Expectation-Confirmation and Disconfirmation Paradigm provides a logical explanation for satisfaction formation, it becomes evident that this paradigm alone cannot fully encapsulate the multifaceted nature of satisfaction. The various theories presented highlight the need to consider a broader range of factors, such as cognitive processes, adaptation, perceptions, and interpersonal dynamics, in understanding the intricacies of customer satisfaction.

Conclusion

Expectation-Confirmation and Disconfirmation Paradigm has been a dominant framework for understanding customer satisfaction, it is essential to recognize this paradigm. The Adaptation Level Theory, Contrast Theory, Assimilation-Contrast Theory, Cognitive Dissonance Theory, Equity Theory, and Perceived Performance Theory all provide valuable perspectives that contribute to a more comprehensive understanding of satisfaction formation. These theories emphasize satisfaction’s dynamic and multifaceted nature, highlighting the influence of adaptation, cognitive processes, perceptions, fairness, and interpersonal dynamics on satisfaction. By considering these diverse factors, the advantage can gain a more nuanced and holistic understanding of customer satisfaction. Therefore, while the Expectation-Confirmation and Disconfirmation Paradigm provides a logical explanation for satisfaction formation, it is essential to acknowledge the broader range of influences on satisfaction. Incorporating the insights from these theories can enrich our understanding of customer satisfaction and help businesses better meet their customers’ diverse and intricate needs.

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Ramasamy G, Ramasamy GD and Ramasamy P. Conceptual review of consumer satisfaction theories with expectation-confirmation and disconfirmation paradigm for business sustainable growth and decision making [version 1; peer review: 1 approved with reservations]. F1000Research 2024, 13:1399 (https://doi.org/10.12688/f1000research.158612.1)
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Reviewer Report 23 Jan 2025
Shankha Shubhra Goswami, Abacus Institute of Engineering and Management, Hooghly, West Bengal, India 
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While the article provides a valuable theoretical perspective on consumer satisfaction and its connection to business sustainability, it lacks empirical evidence, practical applicability, and novel contributions. Addressing these concerns and providing a clearer link between theory and ... Continue reading
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Goswami SS. Reviewer Report For: Conceptual review of consumer satisfaction theories with expectation-confirmation and disconfirmation paradigm for business sustainable growth and decision making [version 1; peer review: 1 approved with reservations]. F1000Research 2024, 13:1399 (https://doi.org/10.5256/f1000research.174235.r353771)
NOTE: it is important to ensure the information in square brackets after the title is included in all citations of this article.

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Approved with reservations - A number of small changes, sometimes more significant revisions are required to address specific details and improve the papers academic merit.
Not approved - fundamental flaws in the paper seriously undermine the findings and conclusions
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