Final answer:
Customer satisfaction refers to how well a product's perceived performance meets buyer's expectations, and it's crucial due to the potential for imperfect or unclear information influencing purchase decisions.
Step-by-step explanation:
The extent to which a product's perceived performance matches a buyer's expectations is known as customer satisfaction. This concept is critical because every purchase is essentially based on the belief about the satisfaction that the good or service will provide.
Due to the fact that for many products the information available to the buyer or seller is imperfect or unclear, it can result in buyers either regretting past purchases or being hesitant about making future ones.
For example, if a customer purchases a smartphone believing it will have a long battery life but finds it needs to be charged twice a day, there is a mismatch between the phone's perceived performance and the buyer's expectations, leading to low customer satisfaction.