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.

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

40

50

60

70

80

0 20 40 60 80 100

Cust

om

er S

atis

afac

tion

(2003-2

005)

Individualism

Japan Germany

Norway Sweden

USA

Hong Kong

FinlandDenmark

S. Korea

up:-1.10

(0.466)

r = 0.641

40

50

60

70

80

0 20 40 60 80 100

Cu

sto

mer

Sat

isaf

actio

n (

200

3-2

00

5)

Individualism

Japan Germany

Norway Sweden

USA

Hong Kong

FinlandDenmark

S. Korea

up: 4.72 (0.0

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

Male Female Male Female Total

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)

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

Hair Salon -0.089 (0.130) 0.099 (0.090) 0.024 (0.693) -0.031 (0.599)

Bank 0.018 (0.757) -0.151 (0.009) 0.039 (0.532) 0.065 (0.263)

High

Switching

Costs

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)

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

Shampoo -0.039 (0.518) 0.071 (0.242) -0.088 (0.133) 0.069 (0.252)

Portal Site 0.007 (0.911) -0.018 (0.775) 0.096 (0.095) -0.021 (0.734)

Low

Switching

Costs

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

High Switching Costs Low Switching Costs Explanatory

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

t-value t-value t-value t-value t-value t-value Explanatory

Variable β p-value

β p-value

β p-value

β p-value

β p-value

β p-value

3.263 1.803 2.367 IDV - - 0.161

(0.001) - - 0.157

(0.074) - - 0.150

(0.019)

-3.237 -2.363 -2.135 UAI

-

0.195 (0.001) - -

-

0.094 (0.018) - - -0.094

(0.033) - -

R2 0.041 0.026 0.009 0.025 0.009 0.022

Adjusted R2 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

R2 = 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

Variable

All Products

/Services TV PC Shampoo

Mobile

Terminal

Mobile

Carrier Hair Salon Portal Site Bank

β 0.475 0.393 0.455 0.620 0.479 0.466 0.552 0.497 0.519 Customer

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.

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

High-switching-costs group: 4.72 (0.007)

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

.

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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