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 Goods Most Services

High in search qualities

High in experience High in credence qualities qualities

SERVICES - DECISION MAKING PROCESS Need awareness

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
Adequate Service

Desired 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.

Temporary Service Intensifiers

FACTORS THAT INFLUENCE ADEQUATE SERVICE

Desired Service Zone of Tolerance
Predicted Service

Perceived Service Alternatives

Self-Perceived Service Role

Adequate Service

Situational Factors

FACTORS THAT INFLUENCE DESIRED AND PREDICTED SERVICE

Explicit Service Promises

Implicit Service Promises

Desired Service

Word-of-Mouth

Zone of Tolerance Adequate Service

Past Experience

Predicted 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: customers 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 customers evaluation of a product or service in terms of whether it has met the customers 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 customers 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

Reliability
Ability to perform the promised service dependably and accurately. Knowledge and courtesy of employees and their ability to inspire trust and confidence. Physical facilities, equipment, and appearance of personnel. Caring, individualized attention the firm provides its customers.

Assurance

Tangibles Empathy

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

build trust reinforce quality build brand identity increase loyalty

is an opportunity to:

Common Themes in Critical Service Encounters Research

Recovery:
employee response to service delivery system failure

Adaptability:
employee response to customer needs and requests

Coping:
employee response to problem customers

Spontaneity:
unprompted and unsolicited employee actions and attitudes

UNDERSTANDING CUSTOMER EXPECTATION AND PERCEPTION THROUGH MARKETING RESEARCH

Customer CUSTOMER

Expected Service

(Customer Gap)
GAP 1
Perceived Service

COMPANY
Company Perceptions of Consumer Expectations

Company

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
Identify dissatisfied customers to attempt recovery; identify most common categories of service failure for remedial action Assess companys service performance compared to competitors; identify service-improvement priorities; track service improvement over time Obtain customer feedback while service experience is fresh; act on feedback quickly if negative patterns develop Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service Measure internal service quality; identify employeeperceived obstacles to improve service; track employee morale and attitudes Determine the reasons why customers defect Forecast future expectations of customers; develop and test new service ideas

Type of Research
Customer Complaint Solicitation
Relationship Surveys Post-Transaction Surveys

Customer Focus Groups

Mystery Shopping of Service Providers Employee Surveys

Lost Customer Research Future Expectations Research