Question

One megatrend demonstrated in business today is consumer empowerment. Consumers have become more powerful in today's business environment and that has changed many traditional marketing approach. Think of one example in the insurance industry that shows the effect of consumer empowerment in today's marketing practice. What is the implication of consumer empowerment on the design of loyalty programs?

Answer 1

The answer will enhance the understanding of the consumer empowerment in the relationship between consumers and service providers.

DESIGN/METHODOLOGY/APPROACH

This study employs an online survey including 564 consumers in India,who recently decided on an insurance service.Perceived consumer empowerment is conceptualized by perceived self-efficacy and perceived controllability. Both have a significant impact on perceived performance risk.While the former is partially mediated by the preference to delegate the decision to a surrogate.Moreover customers involvement in the purchase process moderates both the direct and indirect effect of perceived self-efficacy on perceived performance risk.

PRACTICAL IMPLICATIONS

Results shows that consumer empowerment can be employed as a risk reduction strategy.Consumer empowerment depends on consumer will.Consumers with self efficacy and controllability beliefs perceive significantly less performance risk.For largely indifferent consumers empowerment does not affect risk or decision delegating preference.