LESSON-2

CONSUMER BEHAVIOR IN SERVICES

Evaluation Continuum

Most goods

Most services

EASY

DIFFICULT

High in Search Quality

High in Experience Quality

High in Credence Quality

CONSUMER DECISION MAKING

Information Search
Use of personal sources Evaluation of Alternatives Evoked set

Perceived risk

Emotion & mood

Purchase & Consumption

Service provision as drama Service roles and scripts Compatibility of customers

Post Purchase Evaluation

Attribution of dissatisfaction Innovation diffusion Brand loyalty

Differences in Decision Making

Information Search

Use of personal Source Perceived Risk Evoked set Emotion & Mood

Evaluation of Alternatives

Purchase and Consumption Post Purchase Evaluation

Information Search

Use of Personal Sources:- seek & rely more

Media more info about search qualities , little about experiences Media may not be available, Joint promo and banned professional ads Few attributes before purchase; feel more risk
Intangible nature of services Services are non-std, few give warranties Tech services for which consumer has no knowledge Strategies: Guarantees of satisfaction and empl skills

Perceived Risk

Evaluation of Service Alternatives

Evoked Set

Smaller in services than in goods Retailing vs banks, dry cleaning Few business suppliers in services as compared to goods Adequate pre-purchase info lacking Nonprofessional services Faced with this task of collecting and evaluating experiences consumers may simply select the first available alternative rather than searching for many

Purchase & Consumption

Emotion and Mood:- Both are feeling states but moods are distinguished from emotions in that moods refer to transient state whereas emotions are more intense, stable and pervasive

Services are experiences, therefore both are critical factors that shape the perceived effectiveness of the service encounters. Related to behavior of a customer; provider and others

Positive moods can make customers more obliging and vice versa The direction of the bias in evaluation is consistent with polarity Moods and emotions are linked with memories.

Service marketers should attempt to influence these moods and emotions in positive ways. They need to cultivate positive moods such as joy , delight and contentment and shall discourage distress, frustration, anger and disgust.

Purchase & Consumption

Service provision as drama

Services roles and script

Both create and maintain a desirable impression Carefully managing the actors and physical setting of their behavior Skill of the actors because more contact Physical setting of the service which includes atmosphere, smell, use of space, the style, design and cleanliness
Customers and service providers roles and performance according to desired level Coherent sequence of events Incompatible in many aspects such as beliefs, values, experiences, age, ability to pay, health etc Customers influence on others experiences

The compatibility of customers

Post Purchase Dissatisfaction

Attribution Of Dissatisfaction

Both share the responsibility Dr diagnosis based on patient briefing Info of services diffuse slowly due to these five characteristics:

Innovation Diffusion

Perception of relative advantage, compatibility, communicability, divisibility and complexity

Adoption of services is more slow than goods

Marketers shall concentrate on incentives to trial Brand Loyalty:- switching cost, risk, substitute and level of satisfaction in the past.

Loyal customers in services stay longer Switching cost e.g. changing hospital; health club membership fee Competitors loyal customers switching will require attacking on competitors weak areas.

CONSUMER DECISION MAKING

Information Search
Use of personal sources Perceived risk CULTURE
Values & Attitude Religion and Language Manners & customs Material culture Aesthetics Educational & Social institution

Evaluation of Alternatives Evoked set Emotion & mood

Cultural Universals

Purchase & Consumption

Service provision as drama Service roles and scripts Compatibility of customers

Post purchase Evaluation

Attribution of dissatisfaction Innovation diffusion Brand loyalty

CULTURE

A configuration of learned behavior and results are shared by members of a society. Its importance in services is much more than in goods. Evaluation and interaction . The sum total of learned beliefs, values and customs that serve to direct consumer behavior in a particular market:

Beliefs : A large number of mental &verbal processes reflect our knowledge and assessment of product and services. Values: The indicators consumers use to serve as guides for what is appropriate behavior.Relatively enduring and stable Customs: Overt modes of behavior that culturally approved or acceptable ways of behaving in specific situations, Births, Marriages e.t.c.

CULTURE INFLUENCES ON BUYER BEHAVIOUR

CULTURAL FORCES CULTURAL MESSAGE

RELIGION HISTORY FAMILY LANGUAGE EDUCATION ARTS

SYMBOLS MORALS KNOWLEDGE RULES OF BEHAVIORS

CONSUMER DECISION PROCESS

SELECTING PRIORITISING WANTS DECISION MAKING

Chapter -3

Customers Expectations of Service

Service Expectations

Two levels of expectations

The zone of tolerance Different customers possess different zone of tolerance Zone of tolerance vary for service dimensions Zone of tolerance vary for first-time and recovery service Sources of desired service expectations Sources of adequate service expectations Service encounter expectations verses overall service expectations Sources of both desired and predicted service expectations

Factors that influence customers expectations of service

Dual Customer Expectation Level

Desired Service

Level of service hope to receive or Wished for level of performance

Level of service the customer will accept or minimum tolerable expectations Adequate Service

The Zone Of Tolerance (Z of T)

Delighted

Desired Service

Zone of Tolerance
Acceptance of variations in the service level

Adequate Service
Unaccepted level- dissatisfaction

Zones Of Tolerance For Different Service Dimensions

Desired service

Level of Expectation

Zone of Tolerance

Desired service

Adequate Service

Zone Of Tolerance

Adequate Service

Most Important Factors

Least Important Factors

Z of T for First Time & Recovery Service

First Time Service
Outcome Process

Recovery Service
Outcome Process Low

Expectations

High

Factors That Influence Desired Service

Derived service expectation
Personal service philosophy

EXPECTED SERVICE

Enduring service intensifiers

Desired Service

Personal needs

Zone Of Tolerance

Adequate Service
Many expectations are formed by uncontrollable factors due to customers experience with other coys & edu, values

Factors That Influence Adequate Service

Transitory service intensifiers

Desired Service

Perceived service alternatives Zone Of Tolerance

Self-perceived Service role Adequate service Situational factors Predicted Service

Factors that influence desired and predicted service

Explicit service promises EXPECTED SERVICE

Implicit service promises

Desired Service

Word of mouth

Zone Of Tolerance

Past experience

Adequate Service

Predicted Service

Nature And Determinants Of Customer Expectations Of Service

ENDURING SERVICE INTENSIFIERS Derived expectations Personal service Philosophies PERSONAL NEEDS EXPLICT SERVICE PROMISES

Advertising Personal selling Contracts Other communications

IMPLICIT SERVICE PROMISES

TRANSITORY SERVICE INTENSIFIERS

Tangibles Price EXPECTED SERVICE Desired Service Zone Of Tolerance Adequate Service Gap 5
PERCEIVED SERVICE WORD OF MOUTH

Emergencies Service problems

PERCEIVED SERVICE ALTERNATIVES

Personal Expert (Consumer Reports, publicity, Consultants,surrogates

PAST EXPERIENCE

SELF-PERCEIVED SERVICE ROLE

PREDICTED SERVICE

SITUATIONAL FACTORS Bad weather Catastrophe Random over demand

Current Issues

What does a service marketer do if customers are unrealistic? How does a company exceed customer service expectations? Do customer service expectations continually escalate? How does a service company stay ahead of competition in meeting customer expectations?

Chapter -4 CUSTOMER PERCETIONS OF SERVICE

PERCEPTIONS OF SRVICE

Customer Perception Customer perceived services in terms of the quality of the service and how satisfied they are overall with their experience Satisfaction versus Service quality Two concepts are different Perceived service quality is part of customer satisfaction Health club service facility vs broader concept of service perception Internal and external Customer Perception Customer Satisfaction Satisfaction is the customers fulfillment response. It is a judgment that a product or service feature or the product or service itself provides a pleasurable level of consumption-related fulfillment. Or we can say that whether the customers evaluation of a product or service has met their needs and expectations. Product and service feature trade off. Customer Emotions positive and negative affect perception of satisfaction. Attribute for service success or failure Perceptions of Equity or Fairness ACSI results are:- non-durables- satisfied, durable-less satisfied and services- least satisfied

Customer Perceptions Of Quality & Customer Satisfaction

Reliability
Responsiveness Assurance Empathy Tangibles Product quality

Service quality

Situational Factors Satisfaction Customer

Price

Personal factors

Customer Satisfaction & Loyalty

Profitability
100

Loyalty Retention %
0 1
Very unsatisfied

2 Dissatisfied

3
Neither or nor

4
satisfied

5
Very satisfied

Satisfaction Measure

Service Quality Dimensions

Reliability Responsiveness Assurance Empathy Tangibles

Customer perceptions of quality & customer satisfaction

Reliability Responsive

Service quality Product quality

Situational Factors

Assurance

Empathy

Customer Satisfaction
Personal factors

Tangibles

Price

Service Encounters or Moments of Truth

When the customer interacts with service firm e.g. hotel customer Some services have few encounters while others have many. Some of the encounters are very critical in developing customer loyalty and generally are the first few. When a customer had a multiple interactions with a firm, each encounter will create a composite image in customers mind. Not all encounters are equally important in services in building relationship. Momentous encounters ruin the rest and drive customer away like a proverbial one bad apples simply ruins the rest. Real time marketing where promises are kept or broken Three general type; remote; phone and face to face encounters.

A service encounter cascade for an industrial purchase

Sales Call

Delivery and Installation

Servicing

Ordering of Supplies

Billing

A service encounter cascade for a hotel visit

Check-In Bell person Takes to Room

Restnaurat Meal
Wake Up Call

Check Out

Sources Of Pleasure And Displeasure

Recovery :- Employee response to service delivery system failures Adaptability:- Employee response to customer needs and request Spontaneity :- unprompted and unsolicited employee actions Coping :- Employee response to Problem customers

Evidence of Service( customer)

Contact Employee Customer him/herself Other customers

Operation flow of activities Steps in process Flexibility versus standard Technology versus human

Tangible Communication Servicescape Guarantees Technology

Strategies For Influencing Customer Perception

Measure and manage CS & SQ Aim for CQ & CS in very service encounter

Plan for effective recovery Facilitate adaptability and flexibility Encourage Spontaneity Help Employees cope with problem customers Manage the dimensions of quality at the Encounter level

Manage the evidence of service to reinforce perceptions