Consumer Behavior in Service Encounters

Objectives
Enhance understanding of how consumers choose and evaluate services, through focusing on factors that are particularly relevant for services. Describe how consumers judge goods versus services in terms of search, experience, and credence criteria. Develop the elements of consumer behavior that a services marketer must understand: choice behavior, consumer experiences, and postexperience evaluation.

Explore how differences among consumers (cultural differences, group decision making) affect consumer behavior and influence services marketing strategies.

Where Does the Customer Fit in a Service Organization?

Consumers rarely involved in manufacture of goods but often participate in service creation and delivery Challenge for service marketers is to understand how customers interact with service operations

Four Categories of Services Employing Different Underlying Processes

What is the Nature of the Service Act?
TANGIBLE ACTS

Who or What is the Direct Recipient of the Service?

DIRECTED AT PEOPLE DIRECTED AT POSSESSIONS

People Processing
e.g., airlines, hospitals, haircutting, restaurants hotels, fitness centers

Possession Processing
e.g., freight, repair, cleaning, landscaping, retailing, recycling

INTANGIBLE ACTS

Mental Stimulus Processing

e.g., broadcasting, consulting, education, psychotherapy

Information Processing
(directed at intangible assets)

e.g., accounting, banking, insurance, legal, research

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Where Does the Customer Fit in a Service Organization?

Flowcharting clarifies how customer involvement in service encounters varies with type of process
People processing (e.g., motel stay): customer is physically involved throughout entire process Possession processing (e.g., DVD repair): involvement may be limited to drop off of physical item/description of problem and subsequent pick up Mental stimulus processing (e.g., weather forecast): involvement is mental, not physical; here customer simply receives output and acts on it

Information processing (e.g., health insurance): involvement is mental - specify information upfront and later receive documentation of coverage

High-Contact and Low-Contact Services

High Contact Services

Customers visit service facility and remain throughout service delivery

Active contact between customers and service personnel

Includes most people-processing services Low Contact Services

Little or no physical contact with service personnel

Contact usually at arms length through electronic or physical distribution channels

New technologies (e.g. Web) help reduce contact levels
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Levels of Customer Contact with Service Organizations

High
N u r si n g H o m e

Emphasizes encounters with service personnel

M a n a g e m e n t Co n su l t i n g

H a i r Cu t
4 - St a r H o t e l
G o o d Re st a u r a n t A i r l i n e Tr a v e l (Eco n .)

Tel ep h o n e Ba n k i n g

Re t a i l Ba n k i n g M o t el

Ca r Rep a i r I n su r a n ce

Dr y Cl ea n i n g
Fa st Fo o d Movie Theater
Ca b l e TV

Subway Internet Banking Mail Based Repairs

Emphasizes encounters with equipment

Internet-based Services

Low
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The Purchase Process for Services

Prepurchase Stage Awareness of need Information search Evaluation of alternative service suppliers Service Encounter Stage Request service from chosen supplier Service delivery Postpurchase Stage Evaluation of service performance Future intentions
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CONSUMER BEHAVIOR IN SERVICES

In services these steps do not occur in a linear sequence the way they do in the purchase of goods.

CONSUMER BEHAVIOR IN SERVICES

INFORMATION SEARCH:
Consumers obtain information about product and services from personal(friends, peers) and from non personal sources(mass or selective media). When purchasing services consumers seek and rely to a great extent on personal sources. Consumers engage in greater post purchase evaluation and information seeking with services than goods.

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CONSUMER BEHAVIOR IN SERVICES

INFORMATION SEARCH:
Consumers engage in more post purchase evaluation than pre purchase evaluation when selecting and consuming services. Consumers perceive greater risks when buying services than when buying goods. This is because of its intangible and experiential nature. Also because mostly service comes with no guarantee or warrantee.

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Perceived Risks in Purchasing and Using Services

Functional unsatisfactory performance outcomes Financial monetary loss, unexpected extra costs Temporal wasted time, delays lead to problems Physical personal injury, damage to possessions Psychological fears and negative emotions Social how others may think and react Sensory unwanted impacts to any of five senses

CONSUMER BEHAVIOR IN SERVICES

EVALUATION OF SERVICE ALTERNATIVES:
The consumers evoked set is smaller with services than with goods. For many non professional services, the consumers evoked set frequently includes self provision of the service. Positive/negative moods and emotions enhance or decrease the likelihood of performance of behaviors with positive expected outcomes especially so in high contact services.

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How Product Attributes Affect Ease of Evaluation

Most Goods Most Services

Clothing

Chair

Foods

Restaurant meals

Haircut

Easy to evaluate

Difficult to evaluate
Computer repair Legal services Complex surgery
Source: Adapted from Zeithaml

Motor vehicle

High in search attributes

High in experience attributes

Entertainment

Lawn fertilizer

High in credence attributes

Intangible Attributes, Variability, and Quality Control Problems Make Services Hard to Evaluate

Search attributes Tangible characteristics that allow customers to evaluate a product before purchase Experience attributes Characteristics that can be experienced when actually using the service Credence attributes Characteristics that are difficult to evaluate confidently even after consumption

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Intangible Attributes, Variability, and Quality Control Problems Make Services Hard to Evaluate

Goods tend to be higher in search attributes, services tend to be higher in experience and credence attributes Credence attributes force customers to trust that desired benefits have been delivered

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The Dramaturgy of Service Delivery

Service dramas unfold on a stage--settings may change as performance unfolds Many service dramas are tightly scripted, others improvised Front-stage personnel are like members of a cast Like actors, employees have roles, may wear special costumes, speak required lines, behave in specific ways Support comes from a backstage production team Customers are the audiencedepending on type of performance, may be passive or active
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CONSUMER BEHAVIOR IN SERVICES

SERVICE PURCHASE AND CONSUMPTION:
Departures from the customers expected script, including provision of more of an attribute than expected, may detract or add to the service experience. Customer compatibility is a factor that influences customer satisfaction, particularly in high contact services.

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Role and Script Theories

Role: A set of behavior patterns learned through experience and communication Role congruence: In service encounters, employees and customers must act out defined roles for good outcomes Script: A sequence of behavior to be followed by employees and customers during service delivery
Some scripts (e.g. teeth cleaning) are routinized, others flexible Technology change may require a revised script Managers should reexamine existing scripts to find ways to improve delivery, increase productivity, enhance experiences
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CONSUMER BEHAVIOR IN SERVICES

POST PURCHASE EVALUATION:
Consumers attribute some of their dissatisfaction with services to their own inability to specify or perform their part of the service. Consumers may complain less frequently about services than about goods due to the fact that they themselves are partly responsible for their dissatisfaction. Consumers adopt innovations in services more slowly than in goods. Brand loyalty is higher with services than with goods..

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 Satisfaction defined as attitude-like judgment following a service purchase or series of service interactions Customers have expectations prior to consumption, observe service performance, compare it to expectations Satisfaction judgments are based on this comparison
Positive disconfirmation if better than expected Confirmation if same as expected Negative disconfirmation if worse than expected

Customer Satisfaction is Central to the Marketing Concept

Satisfaction reflects perceived service quality, price/quality tradeoffs, personal and situational factors Research shows links between customer satisfaction and a firms financial performance
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Customer Delight: Going Beyond Satisfaction

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?

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