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Consumer Behavior in Services

Customer Decision making- The three stage model of

service consumption/ purchase model of services Understanding Differences among consumers- Global Differences, Group Decision making

Disney in France..

Euro Disney, which cost almost $4 billion to build, is

owned jointly by a consortium of 60 banks and the Walt Disney Company, which is also responsible for its management. Disney operates two wholly owned theme parks in the U.S.: Disneyland in Anaheim, California (opened in 1955), and the Walt Disney World resort in Orlando, Florida (opened in 1971). The company also earns royalties on revenues from Tokyo Disneyland, a park owned and operated by an independent Japanese company, the Oriental Land Company Limited (opened in 1983).

The Chronology of events.

1st Disneyland in Anaheim California in 1955.
Walt Disney World resort in Orlando, Florida opened

in 1971. Upon the leadership of E. Cardon Walker, Tokyo Disneyland opened in 1983 in Japan with instant success, forming a catalyst for international expansion. Focused to repeat Tokyo history at France in 1986 Disney Chose Paris as the preferred destination Disneyland Paris operational since 12 April 1992

is a holiday and recreation resort in Marne-la-Valle,

a new town in the eastern suburbs of Paris, France. The complex is located 32 km (20 mi) from the centre of Paris. is composed of two theme parks, a retail, dining and entertainment district, and seven Disneyowned hotels. Operating since 12 April 1992, it was the second Disney resort to open outside the United States (following Tokyo Disney Resort) and the first to be owned and operated by Disney

Why Paris???
Demographics and Subsidies
Central location in Western Europe 17 million Europeans live less than a two-hour drive

from Paris. Another 310 million can fly there in the same time or less. Eagerness of the French government offered the company more than $1 billion in various incentives, all in the expectation that the project would create 30,000 French jobs

Initial hitches.
The talks with the French Govt. took more time than

expected Attack of the Parisian intellectuals stating that Disneyland is an assault to French Culture Disneyland- unwelcome symbol of American clichs and a consumer society considered to be the cultural imperialism, or neo provincialism of Euro Disney Few French laureates felt it would encourage an unhealthy American type of consumerism in France .

Euro Disney's ability to generate revenue is determined

by two primary occurrences: 1. Number of visitors in attendance 2. Visitors' average length of stay Although first year's attendance was substantial (9.5 million),it was below the operating break-even level of 11 million Visitors average length of stay was also reportedly well below plan

What Caused These Problems?

1) Quality and design standards of U.S. parks deemed
2) 3) 4)


inadequate for European marketplace. Paris winters uninviting. Unlike Americans, Europeans will not take their kids out of school to visit Euro Disney. Unlike Americans, European vacation habits run counter to short, expensive visits to Euro Disney. The Magic Kingdom concept, successful in California and Tokyo, is not compelling enough for Europe.

6) Paris is not Tokyo.

Tokyo had more than three times as many inhabitants as Paris (8.5 vs. 2.3 million). Tokyo's average per capita income was 43 percent greater than Paris's ($10,300 vs. $7,200). Tokyo Disneyland is only six miles from downtown Tokyo; Euro Disney is 20 miles outside Paris.

7) Europeans Have an American Option 8) Disney's policy of serving no alcohol in the park 9) Monday would be a light day for visitors and Friday a heavy one ? 10) Europeans 'don't take breakfast? 11) Bacon and eggs for breakfast! We didnt know that! 12) Lunch Time is it 12.30? 13) Staff Problems

What is Consumer Behavior??

The actions & beliefs that guide person to purchase a particular product or service.
It involves the psychological processes that consumers go through in recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether or not to purchase a service and, if so, which brand and where), interpret information, make plans, and implement these plans (e.g., by engaging in comparison shopping or actually purchasing a product).

Scope of Consumer Behavior

How individuals make decisions to spend their valuable resources ( time, money & effort) What they buy When they buy Where they buy Why they buy How often they buy

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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

How Product Attributes Affect Ease of Evaluation

Most Goods Most Services




Restaurant meals

Computer repair

Lawn fertilizer


Motor vehicle


High in search attributes

High in experience High in credence attributes attributes

Complex surgery

Easy to evaluate

Difficult to evaluate

Legal services

A Purchase Model for Services

The purchase process for services has three

distinct phases as follows : 1- the pre-purchase phase 2- the service encounter 3- the post-purchase phase.

The UKs Financial Services Authority(FSA) is the regulatory body for all financial services. It is funded entirely by the firms it controls, but it has a supervisory board which is appointed by the Government, via the Treasury. Its primary purpose is to protect consumers by regulating the market to provide fair trading in financial services. In 2003, the FSA commissioned consumer research with the aim of finding out how consumers identify their financial needs and what their decision-making process is in finding the right financial package to meet those needs.

Needs for Financial Services as diagnosed by FSA

Personal Triggers

Family events such as marriage, divorce, children, or elderly parents; Occupation events such as new job, promotion, redundancy, self employment or retirement Heath events such as long-term illness of a dependant; Housing events such as moving house, renting a room or downsizing; Leisure events such as travel or hobbies; Windfall or loss events such as winning a lottery prize or robbery

External trends
This would include Government legislation, changes in the

economic climate for financial services industry initiatives(such introduction of a new type of credit card or bank account)



Financial traits
These are the personal attitudes and approaches of the

individual, for example the degree of risk taking, the planning horizon, the decisionmaking style and the degree of interest the person has in financial planning.

Maslows Hierarchy of Needs

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

E.g -Meals

Selfactualisation Esteem Love 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

Consumer Decision-making Processes

Decision Making Model
Need Recognition
Internal Search

Information Search Pre-purchase Evaluation Purchase/ Service Encounter

External Search

Consumption, Post-consumption Evaluation & Divestment

Stages in Consumer Decision Making and Evaluation of Services

Overall Model Of Consumer Behavior

Components of the pre-purchase phase

Internal factors
Individual needs & wants

External factors
Competitive options

Firmproduced factors


Performance or Functional Financial Time loss or Temporal Opportunity Psychological Social Physical Sensory

Past experience Social context Expectations


Involvement level

Word-of-mouth Distribution communication

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

Evaluation of Alternatives
A process of choice reduction.

Service Encounter
Service purchase

Issues to Consider in Examining the Consumers Service Experience

Services as processes
Service provision as drama

Service roles and scripts

The compatibility of service customers Customer coproduction Emotion and mood

Post purchase evaluation

Captured in measures of satisfaction, service quality, loyalty, emotional engagement:
Word of mouth communication

Attribution of dissatisfaction
Positive or negative bias Brand loyalty

Understanding Differences among Consumers

Global Difference: The Role of Culture
Please go through pg no.71 to 75 of Services Marketing by Zeithaml for this topic

Understanding Differences among Consumers

Group Decision-Making
Please go through pg no.75 to 77 of Services Marketing by Zeithaml for this topic