Consumer behavior is the study of individuals, groups or organizations and all the

activities associated with the purchase, use and disposal of goods and services ,
including the consumer’s emotional, mental and behavioral responses that
precede or follow these activities.
 Enhance understanding of how consumers choose and evaluate services, through
focusing on factors that are particularly relevant for services.

 Describe how consumers judge goods v/s services in terms of search experience,
and credence criteria.

 Develop the element of consumer behavior that a services marketer must

understand:
• choice behavior
• consumer experiences
• post-experience evaluation

 Explain how differences among consumers (cultural differences, group decision

making) affect consumer behavior and influence services marketing strategies.
Understanding customer behavior lies at the heart of marketing. We need to understand how
people make decisions about buying and using service and what determines their satisfaction
with it after consumption.

Without understanding, no organization can hope to create and deliver services that will result
in satisfied customers.

The primary objectives of services producers and marketers are identical to those of all
marketers to develop and provide offerings that satisfy consumer needs and expectations,
thereby ensuring their own economic survival.

Most of what is known about consumer evaluation processes pertains specifically to goods.
The assumption appears to be that services, if not identical to goods, are at least similar
enough in the consumer’s mind that they are chosen, experienced and evaluated in the same
manner.
 Consumers are rarely involved in the manufacture of goods but
often participate in service creation and delivery

 Challenge for service marketers is to understand how

customers interact with service operations

 Based on differences in nature of service act

(tangible/intangible) and who or what is direct recipient of
service (people/possessions), there are four categories of services:
 People processing
 Possession processing
 Mental stimulus processing
 Information processing
People Processing

Possession processing

Mental stimulus processing

Information processing
 Who or What Is the Direct Recipient of the Service?
Nature of the Service Act People Possessions
People processing Possession processing
Tangible Actions
(services directed at (services directed at
people’s bodies): physical possessions):
Barbers Refueling
 Health care  Repair/ maintenance
Intangible Actions
Mental stimulus Information processing
processing
(services directed at
(services directed at
intangible assets):
people’s minds):
Accounting
 Education
 Banking
 Advertising
 CONSUMER EVALUATION
PROCESSES FOR SERVICES
• Search Qualities
– attributes a consumer can determine prior to purchase of a
product

• Experience Qualities
– attributes a consumer can determine after purchase (or during
consumption) of a product

• Credence Qualities
– characteristics that may be impossible to evaluate even after
purchase and consumption
 Continuum of Evaluation for Different
Types of Products

Most Most
Goods Services

Easy to evaluate
Difficult to evaluate

High in search High in experience High in credence

qualities qualities qualities
A perceived risk is the uncertainty faced by consumers when they can’t asses
the post purchase consequences before purchasing the product & it is
involved in all customer decision.
• Functional Risk – Risk faced by customer that product ,which customer
purchased, may fail to function according to his expectations or
unsatisfactory performance outcomes.
• Financial Risk – Risk faced by consumers when he needs to pay for the
service like- monetary loss, unexpected extra costs

• Physical Risk – It involve the risk to the physical safety of the

customer by using the products/ services.

• Psychological Risk – It is the risk of causing harm to one’s self image

by making a poor service. Like- fears and negative emotions

• Time Risk- This is the risk that time spent to search and locate a service
prior to purchase may have been wasted, if service does not confirm to
the customer’s expectations.
• Social risk – This type of risk pertains to a consumers social status.
 How do customers handle perceived
risks?
• Seek information from personal/family sources (family, friends, peers)

• Rely on firm that has good reputation

• Guarantees and warrantees

• Visit service facilities or trying aspect of services before purchasing

• Ask knowledgeable employees about competing services

• Examine tangible cues or physical evidence

• Use internet for competitor service offerings and to search for independent review
and ratings
 Risk reduction strategies developed by
suppliers
•Offer performance warrantees

• Money back guarantee

• Prospective customers can preview service through brochures/web/tv

• Encourage prospects to visit service facilities

• Institute visible safety procedures

• Train staff to be respectful and empathetic in their dealings

• Provide toll free no/website

• Deliver messages to cell phone (delayed flights by airlines)

• Giving customers online tracker to track order status

 Strategic responses to manage risk
• Services high in experience/credence attributes- lot of intangible elements are
involved

• Thus present a special challenge to marketers regarding reassuring customers and

reducing risks

• Example- products high in experience attributes- generate free trials for

prospective customers

• Advertisments also used to stimulate consumer interest. Eg credit card use

• Providers of services with high credence attributes often display their credentials
to reassure of quality service Example- Doctors, architects

• Evaluation of such services may be also affected by customers interaction with

physical environment

• Smart providers also engage in evidence management- an organized approach to

present coherent evidence- employees dress, behaviour, furnishings,equipment and
 Understanding Customers service
expectations
• Customers evaluate service quality by comparing what is expected with what they
receive from supplier

• If expectations are met/exceeded, customers believe that they have received high
quality service. If price/quality relationship is acceptable and other situational
factors are positive- customers likely to make repeat purchases and remain loyal to
that supplier

• Customers expectation of a good service varies from one business to another. Pre
experience also plays an important part

• Service expectations change over time influenced by advertisement, pricing, new

technology, service innovations, social trends, increased access to information
through various media
• Customer expectations are beliefs about service delivery that serve as a standards
or reference points against which performance is judged.

• Because customers compare their perceptions of performance with these

reference points when evaluating service quality.

• Knowledge about customer expectations is important

• Knowing what customers expect is the first step in assuring service quality
 Components of service
expectations
• Desired service

• Adequate service

• Predicted service

• Zone of tolerance
Desired service:
•Type of service which customers hope to receive

• ‘Wished for level”: - a combination of what customers believe can and should
be delivered in the context of personal needs

• A blend of what customers believes “can be” and “should be”

Adequate Service :
• Minimum level of service which customers will accept without being
dissatisfied.

• Customers are realistic- they have threshold level of expectations Eg fast food
service restaurant vs an expensive gourmet meal restaurant
Predicted service level

• The level of service which customers actually anticipate receiving

• Directly affects how they define adequate service at that level

• Customer prediction will be situation specific

• Eg long queues for tickets for amusement park on a holiday

Zone of tolerance

• Difficult for firms to achieve consistent delivery by all employees in same company
and even by same service employee from one time of day to another.

• The extent to which customers are willing to accept this variation is called as zone
of tolerance

• Too low performance: frustration and dissatisfaction amongst customers,

exceeding: pleases and delights customers

• Other words: The range of service within which customers don’t pay explicit
attention to service performance. When service falls outside this range customers
either react positively/negatively

• Size of ZOT will be large or small depending upon factors such as competition, price,
importance of specific service attributes which can influence the level of adequate
service Eg waiting time at checkout at grocery store

• Diff customers possess different zones of tolerance. Eg customers who work/vs at

home
 CONSUMER CHOICE or PRE-PURCHASE STAGE

 CONSUMER EXPERIENCE OR SERVICE ENCOUNTER

STAGE

 POST-EXPERIENCE EVALUATION OR POST

PURCHASE STAGE
 Need Recognition

Information Search

Evaluation of Alternatives
Service attributes, Perceived risk, Service expectations

Purchase
Decision
• service purchase is triggered by an underlying need
(need arousal)

• Needs may be due to:

– People’s unconscious minds (e.g., aspirations)

– Physical conditions (e.g., chronic back pain)
– External sources (e.g., marketing activities)

• When a need is recognized, people are likely take action to

resolve it
 When a need is recognized, people will search for solutions.

 Information may be collected from external as well as internal sources.

 INTERNAL SOURCES include information retrieved by the customer from his

memory, related to his previous experience of buying of services.

 EXTERNAL SOURCES include personal and non-personal sources.

 Personal sources- Family, neighbor, Friends etc.

 Non- personal sources – advertising, newspaper, television, newspapers, radio

etc.
 Service Attributes

 The ‘Search’, ‘Experience’ and ‘Credence’ are some of the factors which create
difference between service and goods.

 Search attribute- Attributes which can be evaluated before purchase are called
Search attributes & it help customers evaluate a product (Physical Goods) before
purchase like- style, color, texture, taste, sound are feature.

Experience attribute- Consumer can determine or evaluated only after the

purchase—must “experience” the service to know what they are getting. Like-
Holidays, sporting events, medical procedure.

 Credence attribute- Attributes that customers find impossible to evaluate

confidently even after purchase and consumption. Like- hygiene of a kitchen in a
restaurant, Quality of repair and maintenance work
• When possible alternatives have been compared and evaluated,
the best option is selected

• Can be quite simple if perceived risks are low and alternatives

are clear

• Price is often a key factor in the purchase decision

Consumers move on to the core service experience after making the decision to
purchase. The service encounter stage is when the consumer interacts directly with
the service firm, and is the means by which consumers co-create value and co-
produce a service while evaluating the service experience. Service encounters are
complex processes where consumer interactions and surrounding environmental
factors shape consumers’ expectations, satisfaction, loyalty, repurchase intentions
and word-of-mouth behavior. The service encounter is generally considered a service
delivery process often involving a sequence of related events occurring at different
points in time. When consumers visit the service delivery facility, they enter a service
“factory” (e.g., a motel is a lodging factory and a hospital is a health treatment
factory). However, service providers focus on “processing” people rather than the
inanimate objects found in traditional factories. Consumers are exposed to many
physical clues about the firm during the service delivery process. These include the
exterior and interior of its buildings, equipment and furnishings, as well as the
appearance and behavior of service personnel and other customers. Even the pace of
service encounters can affect consumer satisfaction. The average level of
performance along these dimensions constitutes a significant predictor of consumer
satisfaction.
• Moments of Truth
• Role Theory
• Script Theory
• The Servuction Model
• The Servicescape/Environmental Perspective
• Frontline Employee-Consumer Interactions
• The Service Environment
• The Role of Other Customers
• Low-Contact Service Encounters
Service encounters have been regarded as moments of truth. The concept of
moments of truth underlines the importance of effectively managing touch-points.
Richard Normann borrowed the moment of truth metaphor from bullfighting to
show the importance of contact points with consumers. At the moment of truth, the
relationship between the consumer and the firm is at stake. The service encounter is
a “moment of truth” because the consumer's experience of the encounter is the
main factor contributing to their perception of overall service quality. It is the skill,
the motivation, and the tools employed by the firm’s representative and the
expectations and behavior of the client which together will create the service
delivery process.
Role is “a set of behavior patterns learned through experience and communication,
to be performed by an individual in a certain social interaction in order to attain
maximum effectiveness in goal accomplishment”. Roles have also been defined as
expectations of society that guide behavior in a specific setting or context. In service
encounters, employees and consumers each have roles to play. If either party is
uncomfortable in a role, or if they do not act according to their roles, it will affect the
satisfaction and productivity of both parties. According to this metaphor, service
facilities constitute the stage and frontline personnel represent the members of the
cast. The theater metaphor also includes the roles of the players on stage and the
scripts they have to follow. The actors in a theater need to know what roles they are
playing and be familiar with the script. Similarly, in service encounters, knowledge of
role and script theories can help organizations to better understand, design and
manage both employee and consumer behavior.
Just like a movie script, a service script specifies the behavioural sequences
employees and consumers are expected to learn and follow during the service
delivery process. Employees receive formal training, whereas consumers learn
scripts through experience, observation, communication with others, and designed
communications and education. The more experience a consumer has with a service
company, the more familiar that particular script becomes. Any deviation from this
known script may frustrate both consumers and employees and can lead to
dissatisfaction. If a company decides to change a service script (e.g., by using
technology to transform a high-contact service into a low-contact one), service
personnel and consumers need to be educated about the new approach and the
benefits it provides. In addition, unwillingness to learn a new script can give
customers a reason not to switch to a competing service provider. Many service
dramas are tightly scripted (such as flight attendants’ scripts for economy class), thus
reducing variability and ensuring uniform quality. However, not all services involve
tightly scripted performances. Scripts tend to be more flexible for providers of highly
customized services—designers, educators, consultants—and may vary by situation
and by consumer.
The theatre is a good metaphor for understanding the creation of service
experiences through the service production system, called the servuction system in
short. This is because service delivery consists of a series of events that consumers
experience as a performance. Role theory and script theory complement each other
in how we understand both consumer and employee behavior during a service
encounter. Together with the script and role theories, the theatre metaphor gives us
insights into how firms can look at “staging” service performances to create the
desired experience.
The servuction model focuses on the various types of interactions that together
create the consumer’s service experience . The servuction system (combining the
terms service and production) consists of a technical core invisible to the customer
and the service delivery system visible to and experienced by the consumer. As in
the theater, the visible components can be termed “front stage” or “front office”,
while the invisible components can be termed “back stage” or “back office”. The
servuction system includes all the interactions that together make up a typical
consumer experience in a high-contact service. Consumers interact with the service
environment, service employees, and even other consumers present during the
service encounter. Each type of interaction can either create value (e.g., a pleasant
environment, friendly and competent employees, and other consumers who are
interesting to observe) or destroy value (e.g., another consumer blocking your view
in a movie theater). Firms have to coordinate all interactions to ensure their
consumers have the service experience they came for.
This approach considers all the experiential elements consumers encounter in service
delivery settings. The physical service environment consumers experience plays a key
role in shaping the service experience and enhancing (or undermining) consumer
satisfaction, especially in high contact people-processing services.

Service environments, also called servicescapes, relate to the style and appearance of the
physical surroundings and other experiential elements encountered by consumers at
service delivery sites identified several dimensions of service environments including
ambient conditions, spatial layout/functionality, and signs, symbols and artifacts.

Ambient conditions refer to environmental characteristics that pertain to the five senses.
Ambient conditions are perceived both separately and holistically and include lighting
and color schemes, size and shape perceptions, sounds such as noise and music,
temperature, and scents or smells. Spatial layout refers to environmental design and
includes the floor plan, the size and shape of furnishings, counters, and potential
machinery and equipment, and the ways in which they are arranged.
Service environments, also called servicescapes, relate to the style and appearance
of the physical surroundings and other experiential elements encountered by
consumers at service delivery sites identified several dimensions of service
environments including ambient conditions, spatial layout/functionality, and signs,
symbols and artifacts.

Ambient conditions refer to environmental characteristics that pertain to the five

senses. Ambient conditions are perceived both separately and holistically and
include lighting and color schemes, size and shape perceptions, sounds such as noise
and music, temperature, and scents or smells. Spatial layout refers to environmental
design and includes the floor plan, the size and shape of furnishings, counters, and
potential machinery and equipment, and the ways in which they are arranged.
Functionality refers to the ability of such items to facilitate the performance of
service transactions and, therefore, the process of delivering the core service. Spatial
layout and functionality create the visual and functional service escape in which
delivery and consumption take place. Signs, symbols and artifacts communicate the
firm’s image, help consumers find their way, and convey the service script (the
scenario consumers and employees should enact). Signals are aimed at guiding
consumers clearly through the service delivery process and teaching the service
script in an intuitive manner. Because individuals tend to perceive these dimensions
holistically, the key to effective design is how well each individual dimension fits
together with everything else.

Service scapes serve four purposes:

(1) they engineer the consumer experience and shape consumer behavior;
(2) they convey the planned image of the firm and support its positioning and
differentiation strategy;
(3) they are part of the value proposition; and
(4) they facilitate the service encounter and enhance both service quality and
productivity.
High-contact service encounters facilitate the development of high-quality relationships with
consumers by encouraging consumer-employee bond-building. Employees play an important
role in service encounters because consumers’ interactions with frontline personnel are a
significant determinant of their satisfaction or dissatisfaction with the service firm. Customer
interactions with courteous, knowledgeable and efficient frontline employees lead to an
enhanced corporate image and to increased perceptions of service excellence, customer
satisfaction and repurchase intentions. In a similar vein, employee friendliness has been found
to have a positive influence on unplanned purchasing behavior among consumers. Recent
empirical evidence also shows that consumer self-employee congruency directly influences
consumer satisfaction with employee relationships and their loyalty towards employees,
which in turn contribute to overall consumer satisfaction with the firm. Consumers’
perceptions of their similarity to service employees allows them to identify with service
personnel on a personal basis, which subsequently increases their comfort, reduces
interpersonal barriers, enhances consumer satisfaction and trust and engenders positive word-
of-mouth (WOM). Other reported sources of satisfaction in service encounters include
consumer delight with unprompted and/or unsolicited employee actions, the ability of
employees to accommodate consumer needs for customized services, and employee
responses to difficulties related to core service delivery.
However, employees do not always generate positive reactions from consumers. For
example, the inability or unwillingness of employees to respond to service failures
and to consumer needs for customized services have been found to be significant
sources of consumer dissatisfaction. Furthermore, the appearance and behavior of
both service personnel and consumers can reinforce or detract from the impression
created by a service environment. Nickson, Warhurst and Dutton use the term
“aesthetic labor” to capture the importance of the physical imagery of service
personnel who serve consumers directly. Frontline personnel should play their roles
effectively, including by ensuring their appearance, speech and movement are
consistent with the servicescape in which they work.
The service environment (i.e., “the stage” in the theater metaphor) refers to the physical
surroundings of the servicescape and can be used as an important proxy signaling the quality
of the firm’s services and its portrayal of its desired image. Service environments are
composed of hundreds of design elements and details that must work together if they are to
create the desired service environment. Even when not noted consciously, these elements may
still affect emotional wellbeing, perceptions and even attitudes and behavior. The resulting
atmosphere creates a mood that is perceived and interpreted by the consumer. Recent
research shows that the service environment is not only a cue for anticipated service quality,
but also influences consumers’ evaluations of the intangible elements of a service firm,
especially for hedonic services. Moreover, the physical service environment influences
consumers’ perceptions of the experiential value of a service expressed in terms of aesthetics
and playfulness, which in turn affect their purchase intentions . Ambient conditions might also
influence consumer behavior in a positive or negative way. For example, pleasant scents
promote a favorable perception of the service environment and have a positive effect on
mood, on the amount of time consumers spend in stores and on overall expenditure and the
number of brands purchased .
Another precondition is that ambient conditions should be adapted to the service
setting (e.g., a lavender aroma that is considered relaxing might not be the best
choice for a dancing club, and loud music might not be appropriate for a hotel room).
In the case of scents, evidence supports the proposition that not all scents affect
consumer behavior. In an experiment conducted by Gueguen and Petr, lemon and
lavender aromas were diffused in a restaurant and compared to a no-aroma control
condition. The study showed that the lavender aroma—but not the lemon aroma—
increased the length of stay among consumers and the amount they purchased.
Moreover, elements of the service environment should vary according to the
setting—private (e.g., a guest room) versus public (e.g., a bar)—and be adjusted to
consumer characteristics (e.g., arousal seeking tendency.
In line with the above reasoning, several environmental elements might have a negative
impact on consumers’ emotions, evaluations and behavior. Design elements such as a lack of
mirrors in dressing rooms, inadequate directions, items being rearranged and small stores also
irritate consumers . Social elements of the service environment might also affect consumers.
For example, the sardine phenomenon—when too many consumers compete for space and
service resources at the same time—can result in consumers experiencing discomfort.
Crowding has a negative effect on (a) consumer satisfaction when the primary motive for the
service experience is utilitarian; (b) the desire to spend more money; and (c) the time spent in
a restaurant. In addition to consumers, the service environment is a highly aesthetic element
in the corporate image creation process and plays a significant role in employee experience
and performance in the servicescape . After all, employees spend much more time there than
do consumers, and it is crucially important that the design of the service encounter
environment enables frontline personnel to be productive and deliver quality services. Internal
consumer and employee responses can be categorized into cognitive responses (e.g., quality
perceptions and beliefs), emotional responses (e.g., feelings and moods), and psychological
responses (e.g., pain and comfort). These internal responses lead to overt behavioral
responses such as avoiding a crowded department store or responding positively to a relaxing
environment by remaining there longer and spending extra money on impulse purchases. It is
important to understand that the behavioral responses of consumers and employees must be
shaped in ways that facilitate production and the purchase of high quality services.
Other factors proposed to affect satisfaction include consumers’ compatibility and
service settings. Consumers are more satisfied with the service experience when
they perceive a high degree of compatibility with other consumers in the same
service context. For example, non-smoking consumers in a restaurant will be more
satisfied when the other consumers are non-smokers as well. However, it has been
proposed that situational and service context variations are more important factors
influencing consumer satisfaction. For example, other consumers being barefoot
might constitute acceptable behavior in a bowling center, but not in a restaurant. A
recent study reported that the degree of interaction with other consumers depends
on the level of importance attached to other consumers according to the service
setting. For example, the presence of and interactions with other consumers are an
essential element of the service experience of a sporting event, whereas this might
not be the case in services such as hair salons or financial services. Moreover not
only does the impact of other consumers differ across service settings, but certain
settings are more strongly associated with negative incidents between consumers
(e.g., movie theaters and skiing slopes) or positive incidents (e.g., retail stores, hair
salons, and amusement parks), while others are related to both negative and
positive incidents (e.g., restaurants and public transportation).
Low-contact services involve little, if any, physical contact between consumers and
service providers. Instead, contact takes place at arm’s length through electronic or
physical distribution channels. In practice, many high-contact and medium-contact
services are becoming low-contact services as part of a fast-growing trend whereby
convenience plays an increasingly important role in consumer choice. Voice-to-voice
and self-service encounters have become increasingly common and have recently
attracted research interest.
Voice-to-voice encounters have, until recently, been an under-investigated topic in
the service literature. Service encounters with a telephone-based customer service
representative are often moments of truth that influence consumers’ perceptions of
a firm. Voice-to-voice encounters can be important because the telephone is often
the initial contact medium for the consumer (e.g., price checking) with a firm, they
can lead to purchase or non-purchase decisions, they are increasingly used as the
platform through which transactions are conducted (e.g., placing an order), and are
used as a channel for after-sales service and recovery processes. Voice-to-voice
encounters play a significant role in developing, sustaining and managing consumer
relationships and enhancing satisfaction. Voice-to-voice encounters often involve
waiting time, music and information. Music and information have become two
common tools firms use to keep consumers occupied while they wait and thereby
reduce their perceptions of waiting time. However, recent research has shown that it
is only when the customer likes the music that it reduces the perceived waiting time
and increases satisfaction.
Self-service technology-enabled encounters can benefit consumers because they
allow for the production and consumption of services without relying on service
personnel (e.g. automated teller machines, self-scanning checkouts and Internet
banking). Self-service technologies (SSTs) allow consumers to “produce a service
independent of direct service employee involvement”. For consumers, SSTs often
require the co-production of services, increased cognitive involvement, and new
forms of service behavior, while they can offer greater customization and more
satisfying experiences. However, self-service encounters not only benefit consumers,
but also frequently benefit service providers by providing them with direct and
immediate feedback from their consumers, improving service design, developing
consumer loyalty and reducing costs. Research on the application of SSTs has focused
on factors that either facilitate or inhibit their adoption and usage by customers.
Perceived usefulness, ease of use, reliability and fun have been identified as key
drivers of consumer attitudes toward SSTs. Self-scanning checkouts in retail stores
showed that control, reliability, ease of use and enjoyment are important usage
determinants of this kind of SST.
Consumer characteristics such as a lack of confidence, anxiety, technology-related
attitudes, and self-efficacy might inhibit the use of SSTs and successful co-
production, especially in complex services. Consumers are often dissatisfied with
SSTs if they deliver poor service or the technology fails, and if they cause frustration
they might engender poor service delivery and technological failure. Due to these
reasons and because SSTs might deter consumers from voicing their complaints,
consumers might avoid engaging in self-service technology-enabled encounters and
even switch service providers. Recent research shows that the ease with which
complaints can be made in SST settings mediate the relationship between
consumers’ perceptions of the likelihood of voice success and their likelihood of
complaining. SST-enabled service encounters also reduce the opportunity for service
providers to get in touch with consumers, determine their emotional state and
detect service failures.
Consumer satisfaction and perceived service quality have dominated the research
agenda at this stage of the service consumption process due to their association with
business performance.

However, consumers who are satisfied and have high perceptions of service quality
do not necessarily return to the same service provider or buy their services again.

As a result, there has recently been a shift in the consumer research agenda toward
other important post-purchase outcomes such as perceived service value, consumer
delight, consumer reactions to service failures (e.g., complaining and switching
behavior), and consumer responses to service recovery.
• The best way to get positive word of mouth is to create memorable and positive
service experiences.

• When service is dissatisfactory, it is critical to have an effective service recovery

strategy to curb negative word of mouth.
• When consumers are disappointed with purchases-because the products did not
fulfill the intended needs, did not perform satisfactorily, or were not worth the
price-they may attribute their dissatisfaction to a number of different sources,
among them the producers, the retailers, or themselves.

• Because consumers participate to a great extent in the definition and production

of services, they may feel more responsible for their dissatisfaction when they
purchase services than when they purchase goods.
The consumers tend to infer positive qualities for the firm and its employees if they
have a good experience with one service employee.

On the other hand, customers who have a negative experience with one employee
are less likely to draw a negative inference about all employees or the firm.
Because it may be more costly to change brands of services, because awareness of
substitutes is limited, and because higher risks may accompany services, consumers
are more likely to remain customers of particular companies with services than with
goods.
• Culture represents the common values, norms and behavior of a particular group
and is often identified with nations or ethnicity.

• Culture is learned, shared, multidimensional, and transmitted form one generation

to the next.

• It also influences how companies and their service employees interact with
customers.

• Culture is important in international services marketing- taking services from one

country and offering them in others but is also critical within countries.

• More and more individual countries are becoming multicultural, organizations need
to understand how this factor affects evaluation, purchase, and use of services even
within countries.
1) Values and Attitudes differ across Cultures

Values and attitudes help determine what members of a culture think is right,
important and desirable.

Because behaviors, including consumer behaviors, flow from values and

attitudes, services marketers who want their services adopted across cultures
must understand the differences.

2) Manners and customs

Manners and customs represent a culture’s views of appropriate ways of

behaving.

It is important to moniter differences in manners and customs because they can

have a direct effect on the service encounter.
3) Material Culture

 Material culture consists of tangible products of culture.

 What people own and how they use and display material possessions vary around
the world.

 Cars, houses, clothes and furniture are examples of material culture.

4) Aesthetics

 Aesthetics refers to cultural ideas about beauty and good taste. These ideas are
reflected in music , art, drama, and dance as well as the appreciation of color and
form
5) Educational and Social Institutions

Both educational and social institutions are affected by and are transmission
agents of culture. Culture manifest itself most dramatically in the people to
people contact of social institutions. For example, Classroom interactions vary
substantially around the world.
A group is defined as two or more individuals who have implicitly or explicitly
defined relationships to one another such that their behavior is independent.

Group purchasing services encounter greater perceived risk, more reliance on word
of mouth communication, greater difficulty in comparing alternatives, and often a
higher level of customer participation than do groups purchasing goods.

Group decision includes two major groups:

1. Households
2. Organizations