Consumer behavior in

services

Consumer decision-making process.

Consumer Expectations
Factors influencing expectation
Service encounter and moments of
truths.
Managing Customer Satisfaction.
Service failure and recovery.

Consumer DecisionMaking Process

Need
Need Recognition
Recognition

Cultural,
Cultural, Social,
Social,
Individual
Individual and
and
Psychological
Psychological
Factors
Factors
affect
affect
all
all steps
steps

Information
Information Search
Search
Evaluation
Evaluation
of
of Alternatives
Alternatives
Purchase
Purchase
Postpurchase
Postpurchase
Behavior
Behavior

Consumer Evaluation
Search Qualities
attributes a consumer can determine prior to purchase of
a product
Color, style, fit, price, feel, smell .

Experience Qualities
attributes a consumer can determine after purchase (or
during consumption) of a product.
Taste and wearibility

Credence Qualities
characteristics that may be impossible to evaluate even
after purchase and consumption
Credence attributes force customers to trust that desired
benefits have been delivered
These attributes determine the level of perceived risk &
uncertainity.

Continuum of Evaluation for

Different Types of Products

Most
Services

Most
Goods
Easy to evaluate

Medical diagnosis

Auto repair

Root canals

Legal services

Television repair

Child care

Haircuts

Vacations

Restaurant meals

Automobiles

Houses

Furniture

Jewelry

Clothing

Difficult to evaluate

High in searchHigh in experience

High in credence
qualities
qualities
qualities

Perceived Risks in Purchasing & Choosing

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

Customer expectations of
service

Customer expectations are

beliefs about service delivery

that function as standards or reference
points
against which the performance is judged.

Marketer has to identify the different

types of expectations customers hold
for service performance
Also, we need to know about sources
of customer expectations

Components of Customer
Expectations
Desired Service Level: wished-for level of
service quality that customer believes
can and should be delivered
Adequate
Service
Level:
minimum
acceptable level of service / minimum
tolerable expectation
Zone of Tolerance: range within which
customers
are
willing
to
accept
variations in service delivery.

The Zone of Tolerance

Customer
delightment
Desired

Service

Zone of
Toleranc
e
Adequate
Service

Customer frustration

Characteristics of ZoT
It is the extent to which the customers
recognize and accept the variations.
ZOT can expand and contract within a
person. This gave rise to the concept of
emergency ward, tatkal reservations and
express delivery counters.
Different customers possess different ZOT.
e.g., paying high price narrows ZOT.
ZOT varies for various service dimensions
like reliability, tangibility etc.

Zones of Tolerance for Different

Service Dimensions
Desired
Desired Service
Service

Level
of
Expectati
on

Zone
of
Toleranc
Adequate
e Service
Adequate
Service

Desired Service

Zone
of
Tolerance

Adequate
Service
Reliability

Tangibles

Source: L. L. Berry, A. Parasuraman, and V. A. Zeithaml, Ten Lessons for Improving

Service Quality, Marketing Science Institute, Report No. 93-104 (May 1993).

Factors That Influence Desired

Service expectations
Personal
Personal Needs
Needs

Desired Service
Lasting
Lasting Service
Service
Intensifiers
Intensifiers

Zone
of
Tolerance
Adequate
Service

Factors That Influence

Adequate Service
Temporary
Temporary Service
Service
Intensifiers
Intensifiers

Desired Service
Perceived
Perceived Service
Service
Alternatives
Alternatives

Self-Perceived
Self-Perceived
Service
Service Role
Role

Situational
Situational
Factors
Factors

Zone
of
Tolerance
Adequate
Service

Predicted
Predicted
Service
Service

Factors That Influence Desired

and Predicted Service
Explicit Service
Promises
Implicit Service
Promises

Desired Service
Zone
of
Tolerance
Adequate
Service

Word-of-Mouth

Past Experience

Predicted
Service

Managing customer
expectations
1.

2.

Pre purchase phase strategies:

Learn about their expectations
Tell customers what to expect
Be Consistent
Purchase phase strategies:
Communicate with the customers.
If possible, modify according to
expectations.
If not possible, explain why.

3. Post purchase phase

strategies
Communicate to see whether
expectations are met.
Develop a follow up program
Develop a procedure to deal with
dissatisfied customers.

Customer Satisfaction
Satisfaction
defined
as
attitude-like
judgment following a service purchase or
series of service interactions
Satisfaction judgments are based on this
comparison
Positive disconfirmation
Confirmation
Negative disconfirmation
Satisfaction reflects perceived service
quality, price/quality tradeoffs, personal and
situational factors

Feelings related to
satisfaction
Contentment: a passive response for
services received on regular basis.
Pleasure:
services
which
provide
happiness to the customers.
Delight: when customer get surprised in
a positive manner.
Relief: where services are responsible
for removal of negative.
Ambivalence: mix of positive &
negative experiences associated with
services.

Customer Delight:Going Beyond Satisfaction

delight is a function of 3 components
Unexpectedly high levels of performance
Arousal
Positive affect

18

Customer satisfaction
determinants
Product and service features
Consumer emotions
Attributions for service success or
failure
Perceptions of equity or fairness
Other consumers, family members
and co-workers.

The Service Encounters

They are moments of truth
occurs any time the customer
interacts with the firm
critical in determining customer
satisfaction as they depict customer
involvement.
In it customer is exposed to
information which influences their
expectation and evaluation.
Customers expectations may change
during the course of service delivery
as they have service encounters.

types of encounters
1. Remote encounters,
2. phone encounters,
3. Face-to-face encounters

Customer Complaint Actions

Following Service Failure

Causes Behind Service

Switching
Pricing

High price
Price increases
Unfair pricing
Deceptive pricing

Inconvenience
Location/hours
Wait for appointment
Wait for service

Core Service Failure

Service mistakes
Billing errors
Service catastrophe

Service Encounter
Failures
Uncaring
Impolite
Unresponsive
Unknowledgeable

Response to Service
Failure
Negative response
No response
Reluctant response

Service
Switchin
g
Behavior

Competition
Found better service

Ethical Problems

Cheat
Hard sell
Unsafe
Conflict of interest

Involuntary Switching
Customer moved
Provider closed

Sources of pleasure &

displeasure in Service
Encounters
Adaptabilit
Recovery:
employee response
to service delivery
system failure

Coping:
employee response
to problem
customers

y:

employee response
to customer needs
and requests

Spontaneity:
unprompted and
unsolicited employee
actions and attitudes

Service recovery
It refers to the actions taken by an
organization in response to a service
failure.
Reasons of failures can be
unavailability of services when promised
delivered late
outcome is incorrect
they are poorly executed
employees may be rude or uncaring.

Components of an effective
Service Recovery System
Do the Job Right
the First Time

Effective Complaint
Handling

Identify Service
Complaints

-Conduct Research
-Monitor Complaints
-Develop Complaints as
Opportunity Culture

Resolve Complaints
Effectively

Develop Effective
Systems and Training
in Complaints Handling

Learn from
Recovery

Feedback

Increased Satisfaction
and Loyalty

Conduct Root Cause

Analysis

d
an
e
a g k ts
ur ac in
co Tr pla
En
m
Co

Fail-safe
the Service

de te s
i
ov ua ion
r
P eq at
n
Ad la
p
Ex

Service
Recovery
Strategies

Treat Customers Fairly

Re
l
Learn from
Recovery
Experiences

st
Lo
rom ers
f
arn stom
e
L Cu

Act
Quickly

Service Recovery Strategies

at Cu
Cu ion ltiv
st sh ate
om ip
s
er w
s ith

Service Guarantees
Guarantee is a recovery tool.
In a business context, a guarantee is a
pledge or assurance that a product
offered by a firm will perform as promised
and, if not, then some form of repair will
be undertaken by the firm
services are often not guaranteed
cannot return the service
service experience is intangible

Effective Service Guarantees

Unconditional
Meaningful
Easy to Understand and Communicate
Easy to Invoke and Collect

Types of Service Guarantees

Single attribute-specific guarantee
Multiattribute-specific guarantee
Full-satisfaction guarantee