Consumer Behaviour in Serv 11
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Transcript of Consumer Behaviour in Serv 11
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Customer Behavior in
Service Encounters
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A Framework for Developing Effective
Service Marketing StrategiesUnderstanding Customer Needs, Decision Making,
and Behavior in Service Encounters
Chapter 2
Building the Service Model
Part II: Chapters 3-7
Managing the Customer Interface
Part III: Chapters 8-11
Implementing Profitable Service Strategies
Part IV: Chapters 12-15
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A Framework for Developing Effective
Service Marketing Strategies
Two Key Themes in Part I of theServices Marketing Strategy Framework:
Differences among Services AffectCustomer Behavior
Three-Stage Model of Service Consumption
Prepurchase Stage:Search, evaluation ofalternatives, decision
Service Encounter Stage:Role in high-contact vs.
low-contact delivery
Post-Encounter Stage:Evaluation against
expectations, futureintentions
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Differences among Services Affect
Customer Behavior
in nature of service act (tangible/intangible) andwho or what is Consumers are rarely involved in themanufacture of goods but often participate in
service creation and delivery Challenge for service marketers is to understand
how customers interact with service operations
Based on differences direct recipient of service
(people/possessions), there are four categories ofservices: People processing Possession processing
Mental stimulus processing Information processing
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Four Categories Of Services
Information processing
(services directed atintangible assets):
Accounting
Banking
Nature of the Service Act People Possessions
Tangible Actions People processing
(services directed at
peoples bodies):
Barbers
Health care
Who or What Is the Direct Recipient of the Service?
Possession processing
(services directed at
physical possessions):
Refueling
Disposal/recycling
Mental stimulusprocessing
(services directed atpeoples minds):
Education
Advertising/PR
Intangible Actions
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Four Categories Of ServicesPeople Processing
Customers must:
Physically enter the service factory Co-operate actively with the service
operation
Managers should think aboutprocess and output from
customers perspective To identify benefits created and
non-financial costs:
Time, mental, physical effort
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Possession ProcessingPossession Processing Customers are less physically
involved compared to people
processing services
Involvement is limited
Production and consumptionare separable
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Mental Stimulus ProcessingMental Stimulus Processing Ethical standards required when
customers who depend on such
services can potentially bemanipulated by suppliers
Physical presence of recipientsnot required
Core content of services isinformation-based
Can be inventoried
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Information ProcessingInformation Processing Information is the most
intangible form of service
output
But may be transformed intoenduring forms of serviceoutput
Line between informationprocessing and mentalstimulus processing may beblurred.
T P P
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T e Purc ase Process or
Services
Prepurchase Stage
Service EncounterStage
Post-Encounter Stage
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Prepurchase Stage
Service EncounterStage
Post-Encounter Stage
Prepurchase Stage: Overview Customers seek solutions to arousedneeds
Evaluating a service may be difficult
Uncertainty about outcomes
increases perceived risk What risk reduction strategies can
service suppliers develop?
Understanding customers serviceexpectations
Components of customerexpectations
Making a service purchase decision
C S S i
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Customers See So utions to
Aroused Needs
People buy goods and services tomeet specific needs/wants
External sources may stimulate theawareness of a need
Companies may seek
opportunities by monitoringconsumer attitudes and behavior
Figure 2.4
Prudential Financials advertisingstimulates thinking about retirement needs
Courtesy of Masterfile Corporation
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Evaluating a Service May Be
Difficult Search attributes help customers evaluate a product
before purchase
Style, color, texture, taste, sound Experience attributes cannot be evaluated before
purchasemust experience product to know it
Vacations, sporting events, medical procedures
Credence attributes are product characteristics thatcustomers find impossible to evaluate confidently evenafter purchase and consumption
Quality of repair and maintenance work
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How Product Attributes AffectEase of Evaluation
Source:
Adapted from Zeithaml
Most Goods
High in searchattributes
High in experienceattributes
High in credenceattributes
Difficult
to evaluate*Easyto evaluate
Most Services
Clothing
Chair
Motor vehicle
Foods
Restaurant meals
Lawn fertilizer
Haircut
Entertainment
Computer repair
Education
Legal services
Complex surgery
*NOTE: Difficulty of evaluation tends to decrease with broad exposure
to a service categoryandfrequency of use of a specific supplier
P i Ri i P i
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Perceive Ris s in Purc asing an
Using Service
Functionalunsatisfactory performance outcomes
Eg: Acceptance of credit card
Financialmonetary loss, unexpected extra costs
Eg: Incur unanticipated expenses/ losses
Temporalwasted time, delays leading to problems
Eg: Waiting time in line/slow service
Physicalpersonal injury, damage to possessions
Psychological
fears and negative emotions
Socialhow others may think and react
Eg: Approval /Disapproval by friends-relatives
Sensoryunwanted impact on any of five senses
H Mi t C
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How Mig t Consumers
Handle Perceived Risk?
Seeking information from respected personal sources Relying on a firm that has a good reputation Looking for guarantees and warranties
Visiting service facilities or trying aspects of servicebefore purchasingAsking knowledgeable employees about competing
services
Examining tangible cues or other physical evidence Using the Internet to compare service offerings and
search for independent reviews and ratings
St t i R t M i
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Strategic Responses to Managing
Customer Perceptions of Risk
Offer performance warranties, guarantees to protectagainst fears of monetary loss
For products where customers worry about performance,
sensory risks: Offer previews, free trials (provides experience) Advertising (helps to visualize)
For products where customers perceive physical orpsychological risks: Institute visible safety procedures Deliver automated messages about anticipated problems Websites offering FAQs and more detailed background Train staff members to be respectful and empathetic
AOL O F T i S t t
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AOL O ers Free Tria So tware to
Attract Prospective Customers
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Understanding Customers
Service Expectations Customers evaluate service quality by comparing what they
expect against what they perceive
Situational and personal factors also considered Expectations of good service vary from one business to
another, and among differently positioned service providersin the same industry
Expectations change over time
Example: Service Perspectives 2.1 Parents wish to participate in decisions relating to their
childrens medical treatment for heart problems
Media coverage, education, the Internet has made this possible
F t I i C t
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Factors In uencing Customer
Expectations of Service
Predicted Service
Explicit & ImplicitService Promises
Word-of-Mouth
Past ExperienceDesired Service
ZONEOF
TOLERANCE
Adequate Service
Personal Needs
Beliefs aboutWhat Is Possible
Perceived ServiceAlterations
Situational Factors
Source:Adapted from Valarie A. Zeithaml, Leonard A. Berry, and A. Parasuraman, The Nature and Determinants of Customer
Expectations of Service,Journal of the Academy of Marketing Science21, no. 1 (1993): pp 112.
C t C t
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Components o Customer
Expectations
Desired Service Level: Wished-for level of service quality that
customer believes can and should bedelivered
Adequate Service Level: Minimum acceptable level of service
Predicted Service Level:
Service level that customer believes firm
will actually deliver Zone of Tolerance:
Range within which customers are willingto accept variations in service delivery
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Prepurchase Stage
Service EncounterStage
Post-Encounter Stage
Service Encounter Stage: Overview Service encounters range from high-to low-contact
Understanding the servuction system
Service marketing systems: high-
contact and low-contact
Role and script theories
Theater as a metaphor for servicedelivery: An integrative perspective
Implications for customerparticipation in service creation anddelivery
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Service Encounters Range from
High-Contact to Low-Contact)
Figure 2.9
Levels of Customer Contactwith Service Organizations
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T e Servuction System:
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T e Servuction System:
Service Production and Delivery
Service Operations (front stage and backstage) Where inputs are processed and service elements created Includes facilities, equipment, and personnel
Service Delivery (front stage) Where final assembly of service elements takes place and
service is delivered to customers Includes customer interactions with operations and other
customers
Service Marketing (front stage) Includes service delivery (as above) and all other contacts
between service firm and customers
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Service Marketing System for a
High-Contact Service
The
CustomerTechnicalCore
Interior & ExteriorFacilities
Equipment
Service People
Other
CustomersAdvertising
Sales Calls
Market Research Surveys
Billing/Statements
Misc. Mail, Phone Calls,E-mails, Faxes, etc.
Website
Random Exposure toFacilities/Vehicles
Chance Encounters withService Personnel
Word of Mouth
Service Delivery System Other Contact Points
Service Operations System
Backstage(invisible) Front Stage(visible) OtherCustomers
SERVICE MARKETING SYSTEM
S i M k ti S t f
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Service Marketing System for a
Low-Contact Service
TheCustomer
Backstage(invisible)Front Stage
(visible)
Advertising
Market ResearchSurveys
Billing/Statements
Random Exposureto Facilities/Vehicles
Word of MouthPhone,Fax, Web-site, etc.
SelfService
Equipment
Mail
TechnicalCore
Other Contact PointsService Delivery System
Service OperationsSystem
SERVICE MARKETING SYSTEM
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Theater as a Metaphor for
Service Delivery
All the worlds a stage and all the
men and women merely players.
They have their exits and theirentrances and each man in his timeplays many parts
William Shakespeare
As You Like It
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Theatrical Metaphor:
An Integrative Perspective Service dramas unfold on a stagesettings may change
as performance unfolds
Many service dramas are tightly scripted, othersimprovised
Front-stage personnel are like members of a cast
Like actors, employees have roles, may wear specialcostumes, speak required lines, behave in specific ways
Support comes from a backstage production team
Customers are the audiencedepending on type of
performance, may be passive or active participants
Imp ications o Customer
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Imp ications o Customer
Participation in Service Delivery
Greater need forinformation/training to helpcustomers to perform well,
get desired results Customers should be given a
realistic service preview inadvance of service delivery, so
they have a clear picture oftheir expected role Figure 2.13: Tourists Appreciate Easy-to-Understand Instructions When Traveling
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Prepurchase Stage
Service EncounterStage
Post-Encounter Stage
Post-Encounter Stage: Overview
Evaluation of serviceperformance
Future intentions
Customer Satis action Is Centra to t e
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Customer Satis action Is Centra to t e
Marketing Concept
Satisfaction defined as attitude-like judgment following a servicepurchase or series of service interactions
Customers have expectations prior to consumption, observe serviceperformance, compare it to expectations
Satisfaction judgments are based on this comparison
Positive disconfirmation if better than expected
Confirmation if same as expected
Negative disconfirmation if worse than expected
Satisfaction reflects perceived service quality, price/quality tradeoffs,personal and situational factors
Research shows links between customer satisfaction and a firmsfinancial performance
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Customer Delight:
Going Beyond Satisfaction Research shows that delight is a function of three
components: Unexpectedly high levels of performance Arousal (e.g., surprise, excitement)
Positive affect (e.g., pleasure, joy, or happiness) Is it possible for customers to be delighted by very
mundane services?
Strategic links exist between customer satisfactionand corporate performance.
Getting feedback during service delivery help toboost customer loyalty
Progressive Insurance seeks to delight customersthrough exceptional customer service