Unit IIConsumer Behaviour in ServicesProf. Arun Mishraarunjimishra@gmail.com9893686820

Learning ObjectivesOverview the generic differences in consumer behavior between services and goodsIntroduce the aspects of consumer behavior that a marketer must understand in five categories of consumer behavior:Information searchEvaluation of service alternativesService purchase and consumptionPost purchase evaluationRole of culture

Categories in Consumer Decision-Making and Evaluation of ServicesInformation SearchEvaluation of AlternativesPurchase and ConsumptionPost-Purchase Evaluation Use of personal sources Perceived risk Evoked set Emotion and mood Service provision as drama Service roles and scripts Compatibility of customers Attribution of dissatisfaction Innovation diffusion Brand loyalty

Need ArousalDecision to buy or use a service is triggered by need arousalTriggers of need:Unconscious minds (e.g., personal identity and aspirations)Physical conditions (e.g., hunger )External sources (e.g., a service firms marketing activities)Consumers are then motivated to find a solution for their need

Information SearchNeed arousal leads to attempts to find a solutionPersonal & Nonpersonal Sources for information searchIn buying services consumers rely more on personal sources. WHY? Personal influence becomes pivotal as product complexity increasesWord of mouth important in delivery of servicesAlternatives then need to be evaluated before a final decision is made

Perceived Risks of Purchasing &Using ServicesMore risk would appear to be involved with purchase of services (no guarantees)Many services so specialised and difficult to evaluate (How do you know whether the plumber has done a good job?)Types of Perceived risks:Functional unsatisfactory performance outcomesFinancial monetary loss, unexpected extra costsTemporal wasted time, delays leading to problemsPhysical personal injury, damage to possessionsPsychological fears and negative emotionsSocial how others may think and reactSensory unwanted impact on any of five senses

How Might Consumers Handle Perceived Risk?Seek information from respected personal sourcesCompare service offerings and search for independent reviews and ratings via the InternetRelying on a firm with good reputationLooking for guarantees and warrantiesVisiting service facilities or going for trials before purchase and examining tangible cues or other physical evidenceAsking knowledgeable employees about competing services

Strategic Responses to Managing Customer Perceptions of Risk

Evaluating Alternatives Evoked set a set of products and brands that a consumer considers during the decision-making process that is derived from past experiences or external sourcesEmotion and mood are feeling states that influence peoples perception and evaluation of their experiencesMoods are transientEmotions more intense, stable and pervasiveMay have a negative or positive influence

Evaluating Alternatives Service AttributesSearch attributes help customers evaluate a product before purchaseE.g., type of food, location, type of restaurant and priceExperience attributes cannot be evaluated before purchaseThe consumer will not know how much s/he will enjoy the food, the service, and the atmosphere until the actual experienceCredence attributes are those that customers find impossible to evaluate confidently even after purchase and consumptionE.g., hygiene conditions of the kitchen and the healthiness of the cooking ingredients

How Product Attributes Affect Ease of Evaluation

Purchase DecisionPurchase Decision: Possible alternatives are compared and evaluated, whereby the best option is selectedSimple if perceived risks are low and alternatives are clearComplex when trade-offs increaseTrade-offs are often involvedAfter making a decision, the consumer moves into the service encounter stage

Service Provision as DramaNeed to maintain a desirable impression

Service actors need to perform certain routines

Physical setting important, smell, music, use of space, temperature, cleanliness, etc.

Post Purchase EvaluationMost important in predicting subsequent Consumer behaviour and purchase.Word-of-Mouth CommunicationAttributes of DissatisfactionPositive or Negative BaisesBrand Loyalty

Role of Culture in Services

*******