Chapter 2

Consumer Behavior in a Service Context

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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Where Does the Customer Fit in a Service Organization? (Fig. 2.1)

 Consumers rarely involved in manufacture of goods but

often participate in service creation and delivery customers interact with service operations

 Challenge for service marketers is to understand how  Flowcharting clarifies how customer involvement in service
encounters varies with type of process - see Fig. 2-1:
 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

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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High-Contact and Low-Contact Services

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

Slide 2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E

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Levels of Customer Contact with Service Organizations (Fig. 2.2)

Emphasizes encounters with service personnel
Management Consulting Telephone Banking

High
N ursing Home

HairCut
4- Sta r Hotel Good Restaurant Airline Tra vel (Econ.)

Retail Banking Motel Dry Cleaning Fast Food Movie Theater

Car Repair Insurance

Cable TV

Subway Internet Banking Mail Based Repairs

Emphasizes encounters with equipment

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Internet-based Services

Low
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Services Marketing 5/E

Managing Service Encounters--1

 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

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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Managing Service Encounters--2

 Service success often rests on performance of junior

contact personnel

 Must train, coach, role model desired behavior  Thoughtless or badly behaved customers can cause
behavior

problems for service personnel (and other customers)

 Must educate customers, clarify what is expected, manage

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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The Purchase Process for Services

(Adapted from Fig. 2-3)

Prepurchase Stage  Awareness of need  Information search  Evaluation of alternative service suppliers Service Encounter Stage  Request service from chosen supplier  Service delivery Postpurchase Stage  Evaluation of service performance  Future intentions

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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Perceived Risks in Purchasing and Using Services (Table 2.1)

      
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

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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Factors that Influence Customer Expectations of Services (Fig. 2.4)

Explicit & Implicit Service Promises Word-of-Mouth Past Experience

Personal Needs Desired Service Beliefs about What Is Possible

ZONE OF TOLERANCE

Perceived Service Alterations Adequate Service Situational Factors Predicted Service

Source: Adapted from Zeithaml, Parasuraman & Berry Slide 2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E

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Components of Customer Expectations

 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

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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Intangible Attributes, Variability, and Quality Control Problems Make Services Hard to Evaluate

 Search attributes Tangible characteristics that allow

customers to evaluate a product before purchase

 Experience attributes Characteristics that can be

experienced when actually using the service evaluate confidently even after consumption

 Credence attributes Characteristics that are difficult to  Goods tend to be higher in search attributes, services tend
to be higher in experience and credence attributes benefits have been delivered

 Credence attributes force customers to trust that desired

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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How Product Attributes Affect Ease of Evaluation) (Fig. 2.5)

Most Goods Most Services

Clothing

Restaurant meals

Computer repair

Haircut

High in search attributes

High in experience High in credence attributes attributes

Source: Adapted from Zeithaml

Complex surgery

Legal services

Motor vehicle

Foods

Chair

Lawn fertilizer

Entertainment

Easy to evaluate

Difficult to evaluate

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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Customer Satisfaction is Central to the Marketing Concept

 Satisfaction defined as attitude-like judgment following a

service purchase or series of service interactions service performance, compare it to expectations
 Positive disconfirmation if better than expected  Confirmation if same as expected  Negative disconfirmation if worse than expected

 Customers have expectations prior to consumption, observe  Satisfaction judgments are based on this comparison  Satisfaction reflects perceived service quality, price/quality
tradeoffs, personal and situational factors firms financial performance

 Research shows links between customer satisfaction and a

Slide 2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E

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Customer Delight: Going Beyond Satisfaction

 Research shows that delight is a function of 3 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?

 Progressive Insurance has found ways to positively surprise

customers with customer-friendly innovations and extraordinary customer service

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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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
Services Marketing 5/E Slide 2004 by Christopher Lovelock and Jochen Wirtz

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Service Marketing System: (1) High Contact Service--e.g., Hotel (Fig. 2.7)
Service Marketing System
Service Delivery System Service Operations System
Interior & Exterior Facilities 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

Technical Core

Equipment

The Customer

Service People

Backstage (invisible)

Front Stage (visible)

Other Customers

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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Service Marketing System: (2) Low Contact Service--e.g., Credit Card (Fig. 2.8) Service Marketing System
Service Delivery System Service Operations System Other Contact Points

Advertising Mail Technical Core Self Service Equipment Phone, Fax, Web site etc.
Backstage (invisible) Front Stage (visible)

The Customer

Market Research Surveys

Random Exposures Facilities, Personnel

Word of Mouth

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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Service as Theater

All the worlds a stage and all the men and women merely players. They have their exits and their entrances and each man in his time plays many parts
William Shakespeare As You Like It

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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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
Services Marketing 5/E Slide 2004 by Christopher Lovelock and Jochen Wirtz

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Role and Script Theories

 Role:

A set of behavior patterns learned through experience and communication customers must act out defined roles for good outcomes and customers during service delivery

 Role congruence: In service encounters, employees and  Script: A sequence of behavior to be followed by employees
 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

Slide 2004 by Christopher Lovelock and Jochen Wirtz

Services Marketing 5/E

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