Consumer Behaviour for Services

The way of the world is meeting people through other people. by Robert Karrigan Customer loyalty begins with experience. Regis McKenna

David L. Albert J. Della B, explains that:

Consumer behavior may be defined as decision process and physical activity individuals engage in when evaluating, acquiring and using goods and service.

Consumer Behaviour Service Differences

Intangibility problem

Consumer involvement
Perceived Risk Sources of Information

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 Goods
Easy to evaluate

Most Services
Difficult to evaluate

High in search qualities

High in experience High in credence qualities qualities

Services - Decision Making Process

Need awareness Information search

Memory

Memory

Evaluation of service suppliers

Future Intentions

Evaluation Service delivery

Request service

Maslows Hierarchy of Needs

Internal Satisfaction Selfactualisation The respect of others Action for and from others Survival Satisfaction of basic hunger Experiment with ethnic cuisine

E.g -Meals

Involves self-fulfillment and enriching experience

Esteem / Ego Social Safety Physiological

A meal at the best restaurant in town

Social meal with friends and family

Safe food from a reputable source Food from any uncontaminated source

Categories in Consumer Decision-Making and Evaluation of Services

Use of personal sources Perceived risk

Information Search

Evaluation of Alternatives
Evoked set Emotion and mood

Purchase and Consumption

Service provision as drama Service roles and scripts Compatibility of customers

Post-Purchase Evaluation
Attribution of dissatisfaction Positive and Negative Biases Brand loyalty

Information Search:
Personal and Non-personal Sources
In purchasing goods, consumer use both personal and non-personal sources because both effectively convey information about search qualities. When purchasing services, on the other hand customer/consumer seeks and rely to the greater extent on personal sources.( mass and selective media can convey information about search qualities but can communicate far less on the experience qualities.)

Information Sources
Previous personal experience Word of Mouth recommendation (WOM) Reference groups Media communications Internet sources

Perceived Risk: Although some degree of perceived risk probably accompanies all purchase transactions, more risk appears in purchase of services then goods. (Intangible, variable, and perishable) risk can come in form of financial, time, performance, social, psychological.

Evaluation of Alternatives
The evoked Set of alternatives- the group of the products that consumer considers acceptable options in given product category- is likely to be smaller with service then in goods. Emotions and Mood- are feeling states that influence Peoples perceptions and evaluations of their experiences. Moods are transient feelings states that occur at specific time and situations. Emotions are more intense stable and persistent.

Purchase and consumption

Service Provision as Drama Service role and scripts Compatibility of Service Customers.

Post-purchase Evaluations
Attribution of Dissatisfaction (because the consumer participate to greater extent in definition and production of services, they feel more responsible for their dissatisfaction when they purchase service then goods.) Ex-Haircut

 Positive and Negative Biases Research say that customer remember negative events and occurrence more then the positive ones and more influenced by negative information then positive information. Brand Loyalty- degree to which the customer are committed to particular brands depends on cost of switching, availability of alternatives, social status of company, perceived risk associated with purchase, satisfaction obtained in past.

Key Issues for Decision Making

Who is involved in the decision making process? How long does the process take? What is the set of competing services from which consumers make their choice? What is the relative importance attached by decision makers to different elements of the service offer? What sources of information are used in evaluating competing service offers?