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Consumer behavior is defined as the actions or beliefs that guide a person to purchase and consume a product or service. Services sector has been growing at a rate of 8% per annum in recent years More than half of our GDP is accounted for from the services sector. Service is the part of the product or the full product for which the customer is willing to see value and pay for it.
Consumer behavior is defined as the actions or beliefs that guide a person to purchase and consume a product or service. Services sector has been growing at a rate of 8% per annum in recent years More than half of our GDP is accounted for from the services sector. Service is the part of the product or the full product for which the customer is willing to see value and pay for it.
Consumer behavior is defined as the actions or beliefs that guide a person to purchase and consume a product or service. Services sector has been growing at a rate of 8% per annum in recent years More than half of our GDP is accounted for from the services sector. Service is the part of the product or the full product for which the customer is willing to see value and pay for it.
Behavior Understanding Consumer Behavior, Customer expectations & perception, managing & exceeding customer service expectations, Strategic for influencing customer perception. 2 What is the consumer Behavior? Consumer Behavior is defined as the actions or beliefs that guide a person to purchase & consume a product or service. The purchase decision of consumer are not made in isolation, but rather, they are influenced by environmental factor such as culture, social class, family & other institutional factors. 3 The service sector The services sector has been growing at a rate of 8% per annum in recent years More than half of our GDP is accounted for from the services sector This sector dominates with the best jobs, best talent and best incomes 4 There are no such thing as service industries.There are only industries whose service components are greater or less than those of other industries. Everybody is in service. -Theodore Levitt- 5 What is services? It is the part of the product or the full product for which the customer is willing to see value and pay for it. 6 Difference between physical goods and services Physical goods Services tangible intangible homogeneous heterogeneous Production and distribution are separated from consumption Production, distribution and consumption are simultaneous processes A thing An activity or process Core value processed in factory Core value produced in the buyer- seller interaction Customers do not participate in the production process Customers participate in production Can be kept in stock Cannot be kept in stock Transfer of ownership No transfer of ownership 7 Qualities of services Search qualities Experience qualities Credence qualities 8 Search Qualities:- A search qualities that can be estimated before the purchase or consumption of a product. search qualities for goods include attributes such as color, design, style, price, fit, etc. 9 Experience qualities Experience qualities include those attributes of a good or a services, which can be assessed by a customer only after its purchase & utilization. Ex. As the passenger traveling bus or others. 10 Credence Qualities The qualities of product or a service that are difficult to asses even after its purchase & consumption/utilization are referred to as credence qualities. for Ex. Service offered by Doctor & Consultants are high in credence qualities because the people who can deliver these service require specialized knowledge & most often these services are accepted on faith. 11 Search qualities Experience qualities Credence qualities Tangibility Access Competence Credibility Courtesy Security Reliability Responsivene ss Understanding the customer Communicatio ns Dimensions of SEC qualities 12 Consumer Decision making Process Need perception. Search for information. Evaluation of alternatives. Purchase & consumption. Post-purchase evaluation.
13 Consumer decision making process Environmental factors: -Culture -Subculture -Social class -Reference Groups -Family Need Perception Search information Evaluation Alternatives Purchase decision Post-purchase evaluation External Source; a) Personal source b) Commercial sources c) Public sources d) Experiential sources Internal sources Market activities 14 Understanding Customer Requirement Customer satisfaction is dependent on the extent to which the service provider is able to meet customer expectation. Customer dissatisfaction occurs when there is a difference between what the customer desire & what the service provider delivers. 15 Customer Expectations Customer Expectation are based on customers on customers experience with the product & service ; feedback received from friends. Colleagues & relatives; or may be based on their present needs. for ex. Instance, insurance customer often find that most of their requirement are not met by insurance policies due to exclusion clauses. 16 Customer service expectation can be measured along five dimensions of service quality. Assurance:- this refers to the ability of the service provider & his employees to use their knowledge & courteous behavior to instill trust & confidence in customers regarding the service. Empathy:-this refers to the service providers ability to show concern for customers & devote individual attention to each customer.
17 Reliability:- This refers to the ability of the service provider to accurately perform the promised service. Responsiveness:- it refers to the willingness of the service provider & his staff to provide assistance & prompt service to customers. Tangibles: This dimension of service quality refers to those element, which provide tangibility to the service & include physical facilities, equipment of the service provider, dress & appearance of the service personal. 18 Types of service Expectation 1.Desired Service: it is defined as the service that a customer desires & to received. in other words, the desired service expectation of a customer are a combination of what she/he feels that a service provider can offer & should offer. 2. Adequate Service: Adequate service is the minimal level of service that a customer is willing to accept from a service provider & is based on the customers perception of what level of service is acceptable to him.
19 3. Predicted Service:- it is the service level between the desired & adequate service level of a customer & lies in the Zone of tolerance. Zone of Tolerance:- it is the gap between a customers desired service expectations & the adequate service expectation. 20 Managing Service quality Gap between management perceptions and consumer expectations Gap between management perceptions and service quality specifications Gap between service quality specifications and service delivery Gap between service delivery and external communication Gap between expected service and perceived service 21 Determinants of service quality Reliability delivering on promises Responsiveness willing to help Assurance inspiring trust and confidence Empathy individualising customers Tangibles- physical representation
22 Moments of truth It is the customer service encounter Every positive or negative experience of the consumer would have fall-out on the overall service experience 23 In services, the last experience remains uppermost in your mind. Therefore, it is not enough to be good, you have to be consistently good 24 Services Monitoring Continuous auditing of competitor service levels versus own company Importance - performance analysis 25 Importance Performance Analysis
Concentrate here
Keep up the good work
Low priority
Possible overkill I M P O R T A C E P E R F O R M A N C E 26 Service quality is directly proportional to employee satisfaction 27 When customers visit a service establishment Their satisfaction will be influenced by Encounters with service personnel Appearance and features of service facilities exterior and interior Interactions with self service equipment Characteristics and behaviour of other customers 28 Customer Service Expectations Desired Service the wished for service Adequate Service the service that would be acceptable 29 Zone of Tolerance Difference between the desired service and the adequate service 30 Service Encounter Themes Recovery Adaptability Spontaneity Coping 31 Recovery Dont Ignore customer Blame customer Leave customer to fend for himself Downgrade Act as if nothing is wrong pass the buck
Do Acknowledge problem Explain causes Apologise Compensate/upgrade Lay out options Take responsibility 32 Adaptability Dont Promise and fail to keep them Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility Do Recognise the seriousness Acknowledge Anticipate Accommodate Adjust Explain rules/policies
33 Spontaneity Dont Exhibit impatience Yell/laugh/swear Steal from customers Discriminate Ignore
Do Take time Be attentive Anticipate needs Listen Provide information Show empathy
34 Coping Dont Take customers dissatisfaction personally Let customers dissatisfaction affect others
Do Listen Try to accommodate Explain Let go of the customer 35 Types of complainers Passives Voicers Irates Activists
36 Customer complaints It pays to resolve customer complaints On an average only 5 % dissatisfied customers complain. Others simply go over to the competitor A satisfied consumer speaks to an average of 3 people on his her experience A dissatisfied consumer gripes to on an average 11 persons about his/her unpleasant experience 37 Companies that pay importance to resolving customer complaints Pay attention to quality and training of manpower recruited Have clear benchmarks on service quality and communicate to employees Take remedial steps to improve customer satisfaction and prevent repeats of customer dissatisfaction Have a data base on customer complaints that is periodically analysed and policies adjusted 38 Satisfied employees will produce satisfied customers Morale Motivation Mood
39 Managing Service Productivity Giving quality service is an expensive business Not every consumer is willing to pay extra for service quality Service providers would have to find their optimum service quality/cost ratios Can technology substitute part of the labour content? Can customers substitute part of the labour content? Making services obsolete by product innovations 40