Consumer Behavior

Chapter flow
Consumer Problem: Time Deficiency Search, Experience and Credence Properties Consumer Choice: -Need recognition (Maslows Need Hierarchy Theory) -Information search-Personal and non-personal sources, Perceived risk, Risk Reduction Strategies -Evaluation of alternatives-Reasons for a smaller evoked set -Purchase

Categories of Services
Four Categories Of Services
People processing Possession processing Mental stimulus processing Information processing Three-Stage Model of Service Consumption Prepurchase Stage Service Encounter Stage Post-Encounter Stage

Categorization
Who or What Is the Direct Recipient of the Service? Nature of the Service Act Tangible Actions People People processing (services directed at peoples bodies): Possessions Possession processing (services directed at physical possessions):

Intangible Actions

Barbers Health care

Refueling Car repair

Mental stimulus processing (services directed at peoples minds):

Information processing (services directed at intangible assets):

Education Advertising/PR Broadcasting Theatres

Accounting Banking Insurance

Three-Stage Model of Service Consumption

Understanding Customer Needs, Decision Making and Behavior in Service Encounters
Prepurchase Stage: Search, evaluation of alternatives, decision
Service Encounter Stage: Role in high-contact vs. low-contact delivery

Post-Encounter Stage: Evaluation against expectations, future intentions

Prepurchase Stage: How Product Attributes affect ease of evaluation

Evaluating a service may be difficult Uncertainty & perceived risk

Easy to evaluate
Clothing Chair Motor vehicle Foods

Most Goods

Most Services

Difficult to evaluate*
Restaurant meals Vacation Package Haircut Entertainment Computer repair Education Legal services Complex surgery

High in search attributes

High in experience High in credence attributes attributes

*NOTE: Difficulty of evaluation tends to decrease with broad exposure

to a service category and frequency of use of a specific supplier

Perceived Risks in Purchasing and Using Services

Functionalunsatisfactory performance outcomes

Financialmonetary loss, unexpected extra costs

Temporalwasted time, delays leading to problems Physicalpersonal injury, damage to possessions

Psychologicalfears and negative emotions

Socialhow others may think and react Sensoryunwanted impact on any of five senses