Module II

Consumer Behavior
& Service
Reference Books:
• C. Bhatacharjee
• Lovelock
 Wher e Doe s the Cu sto me r Fi t i n a
Servi ce Or ga niza ti on ?

• Con su me rs rarel y in volve in

manu fa cture of good s bu t of ten
pa rtic ipate in se rvi ce cre ati on and
de li ver y

• Ch all en ge for ser vic e markete rs is

to unde rst and how cu st ome rs
int er act w it h ser vic e op er ati on s
– Pe ople pro cess ing ( e.g., Ho tel sta y): custo mer
is phy sica ll y involv ed thr ougho ut enti re
pr oce ss
– Po ssess ion pro cessing (e .g ., DVD repa ir):
inv olvement ma y be limited to dro p off of
phy sical it em/ desc ripti on of pr obl em and
su bsequ ent pic k u p
– Men ta l stimu lu s pr ocess ing (e. g., wea ther
fo re cas t): inv olvement is ment al, no t phy sic al;
her e custo mer simply rec ei ves outpu t and acts
on i t
– In for ma ti on pr oces si ng (e. g., hea lth insu ranc e):
inv olvement is menta l - spec ify in for ma ti on
upfr ont and la ter rec ei ve do cumenta ti on of
covera ge
 High -Con ta ct and Low-C onta ct
Ser vices
Hig h C onta ct Ser vices
• Custo mers visit se rvice fa cilit y and rema in
througho ut servic e deliv er y
• Ac ti ve conta ct betwee n custo mer s and ser vic e
per son nel
• Inc lude s mo st peo pl e- pro cessin g ser vic es
Lo w Co nta ct Ser vice s
• Li ttl e o r no physi cal c ontac t wit h se rvice perso nnel
• Conta ct usu all y at arm’ s leng th thr oug h el ec tr oni c or
phy sic al distr ibutio n ch annel s
• New tec hno lo gi es (e. g. Web) help redu ce conta ct
lev el s
Levels of Customer Contact with Service Organizations
Empha sizes
enc ounte rs
wi th serv ice
Hi gh
Nursing Home
HairCut
perso nn el
4-Star Hotel
Management Consulting
Good Restaurant
Telephone Banking
Airline Travel (Econ.)

Retail Banking Car Repair

Motel Insurance
Dry Cleaning
Fast Food
Mov ie Th eat er

Cable TV

Su bway
• Inter net Bank ing

Mai l B ased Rep airs

Empha sizes Internet-based Low

Serv ices
enc ounters wi th
equ ipment
 The consumer’s mind is like a ‘Black Box’

EXTERNAL STIMULUS
BUY

A.COMPANY CONTROLLED
• Service offer
• Price
• Promotion
Response
• Dist..outlets NO BUY

B. SOCIAL FORCES
• WOM Consumer’s mind
• Reference Groups
 Three Buying situations of consumer- Howard & Sheth
• Straight Re- Buy/Routinized response behavior- here the customer
comes for repurchase of the same service product- say for
photocopying, bank draft. The customer is aware of the service
product/brand, the purchase is of daily/frequent necessity. Low
involvement with the purchase process.
• Modified Re-buy/ Limited problem solving- Here the customer is
aware of the category/brands but not the new version or form.
Liril soap, liquid liril body soap.
• Extensive problem solving/ Critical problem solving/New task- A
customer would be in this buying situation when the offer is totally
unfamiliar, he is not clear either about his decision criteria or
evaluation criteria. Like insurance, travel package, vacations etc. these
are high involvement purchasing processes so consumer would require
time.
Roles in Service-Buying Behavior

• Initiator/Influencer

• Information gatherer

• Gatekeepers

• The devil’s advocate

• Decider

• Buyer/purchaser

• User
 Need Arousal

Recognition of Need

Choice of level of involvement

Search for info. / identifying of

alternatives

Decision Evaluation of alternative

Making
Process
Decision to buy/not buy

Purchase action and other decisions

Post purchase behavior

 SOCIAL/GROUP FORCES INDIVIDUAL/PSYCHOLOGICAL FORCES
•Perception
•Family
•Motivation
•Culture/Sub-culture •Learning
•Attitude
•Reference group
•Personality
•Social class

DECISION-MAKING PROCESS
INFORMATION SOURCE •Need Arousal Need. SITUATIONS
B. Service offer, price, • When
advertising, outlets •Choice of level of involvement
• Where
•Search for info. / identifying of
• What
B. SOCIAL- alternatives
• why
• Reference Group •Evaluation of alternative
• WOM •Purchase decision
•Post-purchase behavior

Influence on Service Consumer Behavior

Managing Service Encounters-1
Se rvi ce En cou nte r: A per iod of time
dur ing which cust omer s int er act
di rect ly w ith a ser vice
Mo me nt s of Trut h: Defi ni ng poi nt s in
ser vi ce deli ve ry whe re cu st ome rs
int er act with emp loy ees or eq ui pme nt
Critic al Inci de nt s: spe cific enco unt ers
that res ult in es peci ally
sat isfy ing /d issat isfy ing ou tco me s fo r
ei the r c usto mer s or s er vi ce e mpl oy ees
Managing Service Encounters--2

• Se rvi ce succes s oft en rest s on

pe rfor mance of juni or contact pe rso nne l
• Must tr ai n, co ach , role mod el des ir ed
be havi or
• Th oug htl ess or badly beh aved cust om er s
can cause pr oble ms fo r ser vi ce
pe rso nne l (and other cus to me rs)
• Must educat e cust om er s, clari fy what is
ex pe ct ed, mana ge b eh avi or.
In services, the last experience
remains uppermost in your mind.
Therefore, it is not enough to be
good, you have to be consistently
good
 The
Purchase
Process
for
Services

Service Marketing- Module II Faculty: J.Rai 14

The Purchase Process for Services
• Pre- pu rc has e S ta ge
Awa re nes s o f need
In for ma ti on sea rc h
Ev aluatio n o f a ltern ativ e ser vic e
su pplier s
• Serv ice Enc ounter Sta ge
Requ est servic e fr om c ho sen su pplier
Se rv ice del ivery
• Post -pu rcha se Sta ge
Ev aluatio n o f serv ice per for ma nc e
Fu tu re i ntenti ons
• Awar enes s of ne ed .
• Info rmat ion and s ear ch q ua lit ies
• Evaluat ion of ser vi ce alt ern at iv es
– Pr obl ems o f c ompa ri ng serv ice o ffers.
– Custo mers a s c ompetit io n fo r s er vice del ivery .
– Ro le of mo od, emo tio ns and per sonal
infl uenc es .
– Ro le o f brandin g.
• Se rv ice enc oun ter
• Post pu rch ase evaluat ion by cu sto mer s.
 Per cei ved Ri sks in
Pur ch asi ng and Usi ng Ser vi ces
Fu nc ti ona l – unsa ti sf ac tory perfo rma nce
outc omes
Fina ncial – mone ta ry lo ss, unexpec ted
extr a c osts
Tempo ral – was ted time , dela ys lead to
pr oblems
Phy sic al – per sona l inju ry, da ma ge to
po ss essi on s
Psy cho logi cal – fea rs and neg ati ve
emo ti ons
So cial – how othe rs ma y thin k a nd rea ct
Senso ry – unwa nted impa cts to any of fi ve
senses
Components of Customer Expectations

Desir ed Ser vic e Lev el: The type of serv ice

custo mer s ho pe to rec ei ve in terms of desir ed
ser vic e. It’ s a “wished- fo r” level of ser vice
qu alit y tha t custo mer bel iev es can and sh oul d
be deliv er ed
Adequ ate Ser vic e Lev el : It is a mi nimum
accepta ble lev el of ser vic e tha t the custo mer
wi ll expec t wi tho ut bei ng dissa ti sfied.
Pr edi cted Serv ice Lev el : ser vice leve l tha t
custo mer anti cipa tes / bel iev es fi rm wi ll
actually del iver
Zo ne of To lera nc e: ra ng e wi thi n whi ch
custo mer s are will in g to accept vari ati ons in
ser vic e deliv er y
 Factors that Influence
Customer Expectations of Services
Expli cit & Im plic it
Perso nal Nee ds Servi ce P ro mise s
Wo rd -of-Mo uth
De si re d Se rv ic e Pa st E xperien ce
Bel iefs abo ut
Wha t Is Possib le
ZON E
OF
TOLE RANCE
Perceiv ed Serv ice

Ade qua te Se rv ice Pr edicted Serv ice

Si tu atio na l Fac to rs
Intangible Attributes, Variability, and Quality
Control Problems Make Services Hard to Evaluate

Se ar ch attribute s – Tan gi ble ch ar acte rist ics

that allo w cus to me rs to evaluat e a pr oduct
be for e pur chas e
Ex per ie nce at tribut es – Char acte rist ics that
can be ex per ience d when actually usi ng
the se rvi ce
Crede nce attribute s – Char act er isti cs that
ar e di ffi cult to evaluat e co nfi dent ly ev en
aft er con sump ti on
Go od s te nd to be hi gher in se ar ch
at tr ibut es, ser vi ces tend to be hi gher in
ex pe ri ence and cr ed ence at tribut es
Crede nce at tribut es fo rce cus to me rs to
tru st that desi red be nefi ts have be en
de liver ed
 How Product Attributes Affect
Ease of Evaluation
Mo st Mos t S er vi ces
Goods

Eas y Dif ficu lt

Lawn f ertiliz er
Restaur ant mea ls

Comp le x surg er y
Leg al ser vi ce s
Motor vehi cle

Comp ut er r epair
Enter tai nm ent
to evalu ate to eva lu ate
Clo thi ng

Haircut
Ch air

Ed uca tio n
Food
s

High in sear chHigh in High in creden ce

attr ibutes ex per
attien
ribute
ce att ribut
s es
So ur ce: Ada pted fr om Ze ith aml
 Cus to me r Sat isfact ion is Ce nt ral to the
Mar ket ing C once pt
• Satis fact io n de fine d as att it ude -like jud gm ent
follo wing a se rvice purch as e or se ries of se rvice
inte ract ions
• Cus tomer s have exp ec tat ions prior to
consump ti on, obser ve ser vice per formance,
comp are it to exp ec tat ions
• Satis fact io n judgment s ar e base d on this
comp aris on
– Posi tive disconfi rma tio n if bett er th an
exp ect ed
– Confirmat ion if same as exp ect ed
– Neg ative disconfi rm at io n if wors e th an
exp ect ed
• Satis fact io n reflec ts per ceive d serv ice qua lity ,
price/ qua lity tr adeo ffs, per sonal and si tuat ional
factor s
 Custo mer De li ght :
Go ing Bey ond Sa ti sfa ct ion
• Research shows that delight is a function of 3
components
– Unexpectedly high levels of performance
– Arousal (e.g., surprise, excitement)
– Positive affect (e.g., pleasure, joy, or happiness)

• Is it possible for customers to be delighted by very

mundane services?
A Service Business is a System Comprising
Three Overlapping Subsystems
Se rv ice O per ati on s (fr on t sta ge a nd ba cksta ge)
Where inp uts are pr ocess ed and ser vice elements
crea ted.
In cludes fa cilities, equ ip me nt, a nd perso nnel

Se rv ice D eliv er y (fr on t sta ge)

• Where “fina l assembly” of ser vic e elements ta kes
pla ce a nd s erv ice is del iver ed to c usto mers
• Inc ludes custo mer int era cti ons wi th oper atio ns
and o the r c usto mer s
Se rv ice Ma rketin g (fr ont sta ge)
In cludes servic e deliv er y and all ot her con ta cts
betw een serv ice fir m a nd c usto mer s
 Service Marketing System:
(1) High Contact Service--e.g., Hotel
Se rvi ce Mar ket ing Sy st em
Ser vic e Deliv ery Sy stemOther C on ta ct Po ints
Ad vertising
Ser vic e Oper atio ns S ystem Oth er
Custo mers Sales Calls
Inte rio r & E xterio r Mark et Rese arch
Faciliti es Su rveys
Billing / Sta te ments
Tec hni cal Equ ip men t The
Co re Cus tomer Miscellane ous Ma il,
Ph one Ca lls , Faxe s, etc .
Servi ce P eople Rand om E xposu re t o
Facilit ie s / Ve hicl es
Oth er Cha nce E nco unte rs
Ba cksta ge Fro nt S ta ge with Se rv ic e P erso nn el
(inv isible ) (visible) Cus to mers
Word o f Mout h
 Service Marketing System:
(2) Low Contact Service--e.g., Credit Card
Se rv ice Ma rket in g Syst em
Service D eli ver y Syst em Othe r C onta ct P oi nts
Servic e Opera ti ons
Syste m
Adv erti sin g
Mail
Market Resear ch
The Sur veys
Tec hni cal Self S ervice
Cor e Equip men t Cust omer Ran dom E xpo sur es
Facili ties, Per son nel
Phon e,
Faxsit
Web , e Wor d of Mou th
et c.
Fron t Stage
Back stage (vis ib le)
(in vis ib le)
 Family Life Cycle
• Bachelor
• Newly Married
• Full Nest I
• Full Nest II
• Full Nest III
• Empty Nest I
• Empty Nest II