Consumer Behaviour

in Services
 CONSUMER PROBLEM

 TIME DEFICIENCY
 REASONS: dual career couples, single
parent families
 IT LEADS TO: demand for different
services
 SEARCH, EXPERIENCE &
CREDENCE PROPERTIES
 SEARCH QUALITIES: attributes that a
consumer can determine before the
purchase
 EXPERIENCE QUALITIES : attributes
that a consumer can determine only after
the purchase
 CREDENCE QUALITIES : attributes that
consumer may find impossible to
evaluate even after purchase &
consumption
 Continuum of Evaluation for
Different Types of
Products/services

Most Most
Goods Services

Restaurant meals

Medical diagnosis
Television repair

Legal services
Automobiles

Root canals

Auto repair
Child care
Vacations
Furniture
Clothing

Haircuts
Jewelry

Houses

{
{
{

High in search High in experience High in credence

qualities qualities qualities
 SERVICES - DECISION MAKING
Need awareness
PROCESS

Memory
Memory
Evaluation of
service suppliers

Future Intentions

Request service

Service delivery
 UNDERSTANDING
DIFFERENCES AMONG
CONSUMERS
 GLOBAL DIFFERENCES
 ROLE OF CULTURE
 DIFFERENT VALUES, ATTITUTEDS
 DIFFERENT CUSTOMS
 CUSTOMER EXPECTATION
OF SERVICE

 Customer expectations are the beliefs

about service delivery that serve as
standards or reference points against
which performance is judged.
LEVELS OF EXPECTATION
DUAL CUSTOMER
EXPECTATIONS
Desired Service

Adequate Service
THE ZONE OF TOLERANCE

Desired Service

Zone of
Tolerance

Adequate Service
ZONES OF TOLERANCE FOR DIFFERENT
SERVICE DIMENSIONS
Desired Service

Zone
of
Tolerance Desired Service

Adequate Service
Zone
of
Tolerance

Adequate Service

Reliability Tangibles
 FACTORS THAT INFLUENCE
DESIRED SERVICE
Lasting Service
Intensifiers

Desired Service

Personal Needs
Zone
of
Tolerance

Adequate Service

Lasting Service Intensifiers are individual, stable factors that

lead the customer to a heightened sensitivity to service.
 FACTORS THAT INFLUENCE
Temporary Service
ADEQUATE SERVICE
Intensifiers

Desired Service

Perceived Service
Alternatives Zone
of
Tolerance
Self-Perceived
Service Role Predicted
Adequate Service
Service

Situational
Factors
 FACTORS THAT INFLUENCE DESIRED
AND PREDICTED SERVICE

Explicit Service
Promises

Implicit Service
Promises

Desired Service Word-of-Mouth

Zone Past Experience

of
Tolerance
Predicted
Adequate Service Service
 CUSTOMER PERCEPTION
OF SERVICE
 Customers perceive services in terms of
quality of service & how satisfied they
are overall with their experiences.
CUSTOMER PERCEPTIONS OF QUALITY AND
CUSTOMER SATISFACTION
 BUILDERS OF CUSTOMER
PERCEPTION
 SINGLE TRANSACTION SPECIFIC
ENCOUNTER: how the customer has
been treated in a particular encounter
with a particular employee.
 CUMULATIVE PERCEPTION:
customer’s overall experience with the
company.
CUSTOMER SATISFACTION

 It is a judgment that a product or service

feature or the product or service itself
provides a pleasurable level of
consumption related fulfillment.
 It is the customer’s evaluation of a
product or service in terms of whether it
has met the customer’s needs &
expectations. Its failure leads to
dissatisfaction.
 DETERMINANTS OF
CUSTOMER SATISFACTION
 PRODUCT & SERVICE FEATURES
 CUSTOMER EMOTIONS- your mood
 ATTRIBUTION FOR SERVICE SUCCESS OR
FAILURE: how much the customer blames or
credits the failure or success of a service on the
service provider
 PERCEPTION OF EQUITY OR FAIRNESS:
have I been treated fairly compared to other
customers?
 PERCEPTION OF FAMILY MEMBERS,
FRIENDS, PEERS ETC
 OUTCOMES OF
CUSTOMER SATISFACTION
 Increased customer retention

 Positive word-of-mouth communications

 Increased revenues
 RELATIONSHIP BETWEEN CUSTOMER
SATISFACTION AND LOYALTY IN
COMPETITIVE INDUSTRIES

Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
 SERVICE QUALITY
 The customer’s judgment of overall
excellence of the service provided in
relation to the quality that was expected.

 Service quality assessments are formed

on judgments of:
 outcome quality
 interaction quality
 physical environment quality
 THE FIVE DIMENSIONS OF
SERVICE QUALITY
Ability to perform the promised
Reliability service dependably and
accurately.

Assurance Knowledge and courtesy of

employees and their ability to
inspire trust and confidence.

Tangibles Physical facilities, equipment, and

appearance of personnel.

Empathy Caring, individualized attention the

firm provides its customers.

Responsiveness Willingness to help customers and

provide prompt service.
 THE SERVICE ENCOUNTER
 is the “moment of truth”
 occurs any time the customer interacts with the firm
 can potentially be critical in determining customer
satisfaction and loyalty
 types of encounters:
 remote encounters, phone encounters, face-to-face
encounters
 is an opportunity to:
 build trust
 reinforce quality
 build brand identity
 increase loyalty
 Common Themes in Critical
Service Encounters Research

Recovery: Adaptability:
employee response employee response
to service delivery to customer needs
system failure and requests

Coping: Spontaneity:
employee response unprompted and
to problem customers unsolicited employee
actions and attitudes
 UNDERSTANDING CUSTOMER EXPECTATION AND
PERCEPTION THROUGH MARKETING RESEARCH

Customer
CUSTOMER
Expected
Service

(Customer Gap)

Perceived Service
GAP 1

COMPANY

Company
Perceptions of
Company Consumer
Expectations
 WHY DO SERVICE
RESEARCH?
 To identify dissatisfied customers
 To discover customer requirements or expectations
 To monitor and track service performance
 To assess overall company performance compared to
competition
 To assess gaps between customer expectations and
perceptions
 To gauge effectiveness of changes in service
 To appraise performance of individuals/teams for
rewards
 To determine expectations for a new service
 To monitor changing expectations in an industry
 To forecast future expectations
 CRITERIA FOR AN EFFECTIVE
SERVICE RESEARCH
PROGRAM
 Includes both qualitative and quantitative
research
 Includes both expectations and perceptions of
customers
 Balances the cost of the research and the value
of the information
 Includes statistical validity when necessary
 Measures priorities or importance of attributes
 Occurs with appropriate frequency
 Includes measures of loyalty, behavioral
intentions, or actual behavior
STAGES IN THE RESEARCH
PROCESS
 Stage 1 : Define Problem

 Stage 2 : Develop Measurement Strategy

 Stage 3 : Implement Research Program

 Stage 4 : Collect and Tabulate Data

 Stage 5 : Interpret and Analyze Findings

 Stage 6 : Report Findings

 PORTFOLIO OF SERVICES RESEARCH

Research Objective Type of Research

Identify dissatisfied customers to attempt recovery;
identify most common categories of service failure
Customer Complaint
for remedial action Solicitation
Assess company’s service performance compared to
competitors; identify service-improvement priorities; “Relationship” Surveys
track service improvement over time

Obtain customer feedback while service experience is

fresh; act on feedback quickly if negative patterns develop
Post-Transaction Surveys

Use as input for quantitative surveys; provide a forum

for customers to suggest service-improvement ideas
Customer Focus Groups
Measure individual employee service behaviors for use
in coaching, training, performance evaluation, “Mystery Shopping” of
recognition and rewards; identify systemic strengths
and weaknesses in service
Service Providers

Measure internal service quality; identify employee-

perceived obstacles to improve service; track Employee Surveys
employee morale and attitudes

Determine the reasons why customers defect Lost Customer Research

Forecast future expectations of customers; develop
and test new service ideas Future Expectations Research