SERVICES MARKETINGLECTURE 2

CONSUMER BEHAVIOR IN
SERVICES

Where Does the Customer Fit in a Service

Organization?
People processing (e.g., motel stay): customer is
physically involved throughout entire process
Possession processing (e.g., DVD repair):
involvement may be limited to drop off of physical
item/description of problem and subsequent pick up
Mental stimulus processing (e.g., weather
forecast): involvement is mental, not physical; here
customer simply receives output and acts on it
Information processing (e.g., health
insurance): involvement is mental - specify
information upfront and later receive documentation of
coverage

Service Encounters
A service encounter is a period of time during which
customers interact directly with a service. It is
difficult to improve service quality and
productivity without full understanding of the
customers involvement in a given service
environment. Speeding up processes and weeding
out unnecessary steps to avoid wasted time and
effort are often important ways for a firm to
improve perceived value of its service.

Pre-purchase Stage - Overview

Pre-purchase Stage

Customers seek solutions to

aroused needs

Evaluating a service may be

difficult

Uncertainty about outcomes

Increases perceived risk

Service Encounter Stage

What risk reduction

strategies can service

suppliers develop?

Understanding customers

service expectations

Components of customer

expectations

Post-purchase Stage

Making a service purchase

decision

Types of Service Encounters

High Contact Services
Customers visit service facility and remain throughout

service delivery

Active contact between customers and service personnel

Includes most people-processing services

Low Contact Services

Little or no physical contact with service personnel
Contact usually at arms length through electronic or

physical distribution channels

New technologies (e.g. Web) help reduce contact levels

Levels of Customer Contact with Service

Organizations
Emphasizes encounters
with service personnel

High
N ur sin g H o m e

H a irCut
4- Sta r H otel

M a na gemen t Con sulting

G oo d Resta ur a n t

Telep h on e Ba n k in g

A i rl in e Tra ve l (Eco n .)

Reta il Ba nk i n g

Ca r Rep a ir

M o tel

I n sura nce

Dr y Cl ea n ing
Fa st Food

Movie Theater
Ca b l e TV

Subway
Internet Banking

Emphasizes encounters
with equipment

Mail Based Repairs

Internet-based
Services

Low

Managing Service Encounters

Service encounter: A period of time during which

customers interact directly with a service

Moments of truth: Defining points in service

delivery where customers interact with employees or

equipment
Critical incidents: specific encounters that result in

especially satisfying/dissatisfying outcomes for

either customers or service employees

Evaluation of Services
Search Qualities:attributes that a customer

can determine before purchasing a product.

Experience Qualities:attributes that a can

be discerned only after purchase or during

consumption.

Credence Qualities:includes characteristics

that the consumer may find impossible to

evaluate even after purchase and
consumption.

Perceived Risks in Purchasing and Using 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

I. Need Recognition
Physiological needs
Safety and security needs
Social needs
Ego needs
Self-actualization

II. Information Search

Personal sources: friends or experts.

Non-personal sources:mass or
selective media.

Perceived Risk:
1. Intangible nature of services and high
level of experience quality.
2. Non-standardized.
3. No warranties or guarantees.
4. Technical nature of services.

III. Evaluation of Service Alternatives

Smaller Evoked Set:
1. Lack of display of alternatives at one
place.
2.

Availability of a single brand.

3.

Difficulty in obtaining adequate prepurchase information.

IV. Service Purchase & Consumption

Emotion & Mood.
Service Provision as Drama.
Service Roles and Scripts.
The Compatibility of Service customers.

Service Encounter Stage - Overview

Pre-purchase Stage
Service encounters range from highto low-contact

Service Encounter Stage

Understanding the servuction

system
Theater as a metaphor for service
delivery: An integrative perspective
Service facilities

Post-purchase Stage

Personnel
Role and script theories

Post-encounter Stage - Overview

Pre-purchase Stage

Evaluation of service
Service Encounter Stage

Post-purchase Stage

performance

Future intentions

Difficulty In Evaluating Services

1.

Search Attributes.

2.

Experience Attributes.

3.

Credence Attributes.

Factors that Influence

Customer Expectations of Services

Personal Needs
Desired Service
Beliefs about
What Is Possible

Explicit & Implicit

Service Promises
Word-of-Mouth
Past Experience

ZONE
OF
TOLERANCE

Perceived Service
Alterations
Adequate Service
Situational Factors

Predicted Service

Components of Customer Satisfaction

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
Predicted Service Level: service level that
customer believes firm will actually deliver
Zone of Tolerance: range within which
customers are willing to accept variations in
service delivery

How Product Attributes Affect

Ease of Evaluation

High in search
attributes

High in experience
attributes

Complex surgery

Difficult
to evaluate
Legal services

Education

Computer repair

Entertainment

Most Services

Haircut

Lawn fertilizer

Restaurant meals

Foods

Motor vehicle

Chair

Easy
to evaluate

Clothing

Most Goods

High in credence
attributes

Difficulty In Evaluating Services

1.

Strategic Responses to difficulties in

evaluating services:
Intangibility of Service Performances.

2.

Variability and Quality Control Problems.

The Servuction System

A Service Business is a System Comprising

Three Overlapping Subsystems
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

Service Marketing System:

(1) High Contact Service--e.g., Hotel
Service Marketing System
Service Delivery System
Service Operations System

Other
Customers

Interior & Exterior

Facilities

Technical
Core

Equipment

The
Customer

Service People

Backstage
(invisible)

Front Stage
(visible)

Other
Customers

Other Contact Points

Advertising
Sales Calls
Market Research
Surveys
Billing / Statements
Miscellaneous Mail,
Phone Calls, Faxes, etc.
Random Exposure to
Facilities / Vehicles
Chance Encounters
with Service Personnel
Word of Mouth

Service Marketing System:

(2) Low Contact Service--e.g., Credit Card
Service Marketing System
Service Delivery System
Service Operations System

Other Contact Points

Advertising
Mail
Technical
Core

Self Service
Equipment

The
Customer

Phone, Fax,
Web site etc.
Backstage
(invisible)

Front Stage
(visible)

Market Research
Surveys
Random Exposures
Facilities, Personnel

Word of Mouth

The Dramaturgy of Service Delivery

Service dramas unfold on a stage--settings may

change as performance unfolds

Many service dramas are tightly scripted, others

improvised

Front-stage personnel are like members of a cast

Like actors, employees have roles, may wear special

costumes, 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

Role and Script Theories

Role: A set of behavior patterns learned through

experience and communication

Role congruence: In service encounters, employees

and customers must act out defined roles for good

outcomes
Script: A sequence of behavior to be followed by

employees and customers during service delivery

Some scripts (e.g. teeth cleaning) are routinized, others flexible

Technology change may require a revised script

Managers should reexamine existing scripts to find ways to

improve delivery, increase productivity, enhance experiences