Consumer satisfaction index: new practice and findings

This paper reports the development of the Hong Kong consumer satisfaction index (HKCSI) – a new type of consumer‐oriented economic performance indicator representing the quality of products (commodities and services) sold in Hong Kong as evaluated by Hong Kong consumers – as well as the findings of HKCSI from 1998 to 2000, each year with more than 10,000 successful telephone interviews on about 60 products. According to Hong Kong's special economic structure, the HKCSI is constructed from a consumption point of view concentrating on products and the products’ consumers, rather than from the popular production point of view focusing on firms and the firms’ customers. Key features of HKCSI include: the direct introduction of consumer characteristics (such as age, education, and income) in model construction; the wide coverage of services, especially free services; and the adoption of a product weighting system based on consumer price index (CPI), not on gross domestic product (GDP). In this paper, a theoretical framework of consumer satisfaction is first presented after investigating the relevant literature, and then the large‐scale consumer survey scheme adopted to collect the data and the structural equation modeling technique employed to estimate the indexes are discussed. New considerations in the HKCSI in such areas as model structure, indicator and questionnaire design, and product classification are elaborated upon. Next, the estimated results are analyzed focusing on the reliability and validity of the model, on the relationships among consumer satisfaction and its antecedents and consequences, and especially on the effects of consumer characteristics on consumer satisfaction and the implications of such effects for marketing practice. The results are generally consistent across different products, broadly acceptable and in agreement with previous findings, and are also relevant to Hong Kong's special situation. The paper concludes with a summary and some remarks on problems in the present study and future research directions.