Valarie A. tatthant, aasraacr Service's unique characteristics of intangibi2ity,nonstand- srdization and inseparabtlity Lead then to be more d1f ficult fo evaluate than goods. A frasework for {aoleting differen tes in consumer evaluation processes between goods nd ser vices 4s offered, folloyed by slevea specific hypotheses Accompanying strategic tnplications for sexvice marketers fare suggested, umopvcrron According to projections, services will account for nore than half of the naeion's economic activity by the end of the 1980's (Business Week, March 17, 1980). Providers of sedical and legal services, haircuts, day cave, entereetn— tment end’ education, anong cthere, vill proliferate to meet tho groving desands for Jetaure and apending which accom pany the United States! rising eeandaré of living. ‘The Drinary objective of these service producers will be iden Eieel to that of all marketers! to develop and provide offerings thet satisfy consumer needs, thereby ensuring these om econonie survival. To achieve this objective, service providers will need to understand hov consumers choose and evaluate their offer ings. Unforcunately, most of what tz know about consumer evalustion processes’ pertains specifically to goods. The Sosumption appears to be that services, 4f net identical to goods, are at least sinilar enough in the consmer's 12 that they are. chosen ond evaluated in the sexe nansey. This paper proposes to refute this assumption by showing thet Services’ unique characterietiea necessitate ¢ifferent consuner evaluation processes from those used when assese~ Sng eo0ds + Search ve, Experience we, Credence Properties? One framework for isolating differences in evaluation pro- cesses betncen goods and services is the classification of qualities of goods proposed by economists Philip Kelaon (1970) and Darby and Kara! (1975). Nelson distinguishes Between exo categories of qualitize of consumer goode? rch qualities, ateributes which « conmumer ean determine Prior to purchasing a prodect; and experience quslitias, Attributes vhich can only be discerned afeer purchase oF during consumption. Search qualities dnelule’atteibucee ‘uch oa color, style, price, fit, feel, hardness, smell, while experience qualities saclude characteristics such 28 tnsce, wearability, purchase satsefaction. Some goods Gevg-y clothing, fucniture and Jewelry) ave Righ in search quelicies for these attributes can be aimat com pletely determined and evaluated prior to prchase. Other f00ds and services, (e.g-, vacetions and restaurant meals) fre high in experience qualities, for their attributes can~ fot be know or assessed until they have been putehased ‘nd are being consused. Darby and Karni (1973) add to Nel= bon'e twowuay claseifscation ayoten third category of qualities of goods, credence qualicise, vhich ae chara Ctevistice vbich the consumer may find’ Snpoasshle to eval- tate even after purchase snd conmunption, Examples of of ferings high in credence qualities inclule appendix oper= ations and brake Telinings on autowobiles. Few consumers possess pedicel or nechanseal skille sufficient to evaluate ‘ether these services are neceueary or are performed prop- erly, even after they have besn prescribed snd produced by the beller. DIRFER SEIVEEN COODS AND SERVICES Texas AiM Untvereity Figure 1 arrays goods and services high in search, experi~ fenes, and credence qualities along 2 continwin of evslua {on'canging from "easy to evaluate” to "difficult to eval= uate." At the Teft end of the continvun are goods high in Search qualities, easiest to evaluate even before, purchare, To the center arc goods nnd naruicen high in expartence dalities, more difficcie to evaluate because they must be Purchased’ and consused before ansessnant ie possible, Ar ‘the right end of the continuun are goods and services high in credence qualities, moot difficult to evaluate because the consumer ay be uncware of or may Lack sufficient know ledge to appraise whether the offeringa satialy given wants oF deeds even after consumption. Continuum of Evaluation for Different Types of Products 2K c L ; dusiities gaits guttetes ‘The major premise of this paper ie that most goods fall to the Left of this coutincum, while most services. fall £0 the right due to three distingulshing characteristics, These distinguishing characterietics--intangibility,, son standardization, and ineoparabiliey of production and. con Sumpetonm-mako services more dsféscolt to evaluete thas goods. "Difficulty in evaluation, im turn, forces conaunera fo rely on different cues and processes when evaluating eer~ Several scholars detail the cheracteriatics which distin guluh services from producte. (Besson 1973, Rathmell 1974, Eiglier et al, 1977) Intangabélity pertains to the inabili- ty of services eo be seen, felt, Fasted, of touched ia the Sane manner in vhish goodg can be sensed. Services cannot be displayed, physically desonetreted or Aisstrsted; there fore, they possess fow search, qualities and gony experience qualitica, sonstandaréization entaile the inability of Producer to Provide consistent performance and quality vith Sservice, Sines services cannot be inventoried, perfor Inance depends to sane extent on level of denandy 4n periods Of hgh denand, a service provider may not spon) aa tuch ine or exert ge much effort as in periods of low denand Quality also nay chenge from day to. day because different employees perform che service, or because orch enployee's Suiiie snd’ moode vary. Nonatandardiention resules ta Ragh, Giperionce qualities, for consunare cannst be cereatn about 186performance on any given dey, even 4£ they use the sane service provider on a ropulat Sarin, Ingeparabitity of ‘production and conmuaption eonstieutes' the Final charector~ istic witch distinguishes goods and services. While cans ible goods are produced, sold and then consumdy sorvices fare sold, then produced’ ond contuned simultaneously (Regan Because of this inseparsbility, the buyer usually ‘in producing the service, thereby affecting the perforaance and qusiity of the service. A doctor's accurate diagnosis, the desized haircut fron a salon, off fective stain removal fron a drycleaner--ell these depend 8 the consumer's specification, communiontion and partic~ ipation in the production of the aervice. The quality of ost ervices, and their ability to satisfy the Connery depend not only on how well the service provider perfor, Sut azo on how st! the eansunar porformes In sum, the inseparabiliey, nonstandards tangibitity of services lead then topos qualities and asny experience quaLitie: les aleo doninete in many services, eepectaily those prom ‘vided by professionals and specialists, idile consumers say find ie easy to evalucte the performance of everyday Services (e.g-y restaurant weals, housekeeping, or law cate) prior to consumption, they may find ie inposedble to judge those perforned by professional and special iets with ‘exteneive training or experience in a specialized #kilt (e.gey medical disgnosts, television repair, or estate aat~ tlbnene) Services: Sone typotheses shout Consumer valuation Processes Because experience ond credence qualities dawinate in ser- ‘vices, consunore nay enploy aifferent evaluation processes han those they use with gooda, where search qualities. don- Snate. Specific aroas where characteristics of service ‘ay Lead to divergent evaluation proceases axe: informacion Search; evaluative criteria; size, end comjosieion of the ‘evoked set of alternatives; perceived Fisky adoption of in= ovations; brand loyalty; and attribution of disatistac tion. Information Seaveh Conssners obtain information about products and services from personal sources (evg.> friends or experts) snd from nonpersonal sources (e.g. aese or selective nedia)- “hen purchasing goods, ‘consusers enpley both personal snd Sonpersonal sources since both effectively convey informa ton about seareh qualiesen, ‘hen purchasing services, on the other hand, consumer nay ‘seek end rely to a grester extent on personal sources, for Several reasons. First, mass and Selective nedia can con vey information about saarch qualities but can communicate Little about experience qualities. By asking fetende oF ‘experts about services, Rovever, the conmume® ean obtain Snfornation vicariously about experience qualities, Second, nongersonal sources aay not be available because: (1) many service providers are local, indepenfent merchants with hetther the experieace aor the funds for aavertising; (2) Neooperative" advertising, or advertising funded jointly by the Fetatler and ehe manufseturer, {2 used rarely vith sor vices since most local providers are both producer” and re tatler of the service; and (3) professional seaociations banned advertising for so many years that both promeesonats snd consumers tend to rerist ite use even though it ts now Deraitted. ‘Third, since consunecs can discover few attric ‘putes prior to purchase of a service, they may feel greater sk co be ascociated with selecting aa altemative. Given this risk, they my depend to a greater extent oa sources such ae word-of-aouth which they aay perceive to be more credible end less biased, Reacarehers suggest that personal wvwscey aiyht be more ap propriate in eituations there experience qualities dominate 187 Robertson (1971) claimed chat personal influence becomes pivotal ae product complexity increases and shen objective Standards by which to evaluate the produce decvease (cers hen experience qualities are high.) Eiglier and Langeatd 971) teveaied that sanagers in four service industries Believe word-of-nouth to hava a great influence dn services, Finally, many researchers (anong then Perty and Haw 1365; ‘cunningham 1967, Arndt 1967) confirmed that the eredibility of personal sources encourages their use in eituations of high perceived risk. ypothesis 1: Coneuners seek and rely more on infor ‘mation from personal sources than ftom ‘nonpersonal seurees when evaluating services prior to purchsce, Consusers nay Find post-purchese evaluation nore esveatial with services than With goods because services possess eX perience qualities which cannot be adequetely assessed pri- br to purchase, The diseonance-attribution model of auli- fence response ¢o comunicarion (kay 1973) deseribes the it~ ‘uation which frequently occurs when consumers select ser vices: (1) the consumer selects from snong virtually tad ‘singuishable alternatives; (2) through experience, the con ssuner develops an attitude tovard the services and (3) after the development of an ateicude, the consumer Learns more about the service by paying attention to messages suppccting hig choice. in contrast both to che Lesrsing response mod~ fl snd the ow involvenent model (Pay 1973), here constn~ ‘ere seek information and evaluate praducte prior topurchass, 48 they do vith tangible goods, the diasonance-reapanse mo~ 4x represents the case of services where nost evaluation Succeeds purchase, Wypotheste 2: contuners engage in greater post-put~ chase evaluation snd information seek fing with services ehan with products. Hypothoate 3: Coneuners engage in more post-purchase evalustion than pre-purchase evaluat fon hon selecting and consuming servic Criteria for Evaluating Guatity When purchasing goods, the conouner euploye muleiple cues to Judge quality, snong then style, color, label, feel, pack ge, brand name, and price. when purchaaing aervices, the condumer is Limited to a gacll sumer of cuesy in anny ca Ses, the only cues available on which to Judge quality sre the’ service's price and the physical facilities witch Nouse the servic Plunbing, houseclesning, and 1s care are examples of ser ‘vices share price may be the only pre-purchase, Indicator of quaticy. Research (Tull 1964, Olander 1970, weConnell 1968) enonseeates that when the price io the osly inforsation avallable, consumers use it €o assess quality. Bich other sorviegs (e.g., hatreuts, legal gid, dental sor vies and veighe reduction)» consunére Say base decisions about quality on the emgible evidence of the servicss: che physical facilities. ‘Thus they may examine the offices, personnel, equipment and paraphernalia exe to perform the Service in onder to evaluste quality.The dnporeance of Physical facilities for this purpose has been emphasized by Eigiier (1977), Bescon (1973) and others. Hypothests 4: Congunars use price and physical factl- Geter as the major cues to service qual ity. eked sat ‘The evoked set of alternatives, that group of producte whieh a consumer considers acceptable options in a given product ods, One reason for the reduced set involves differencesin retailing bet ‘to purchase goode, consumers generally shop in retail stores vhich dloplay com peting products in cloce proxinity, clearly denonatrating the alternatives froa which a consiner may select, Zo put chase services, on the other hand, the cououner vioite a seesil establishment (eg. 2 bani, @ 2ry cleaner, of a hase colon) whieh offers only a eiagie “brand” for sale. Asecond reason for the smaller evoked set 1s that consim~ fxs are wnlixely to find more than one or to stores provi- ding the sane services ins given geographic area, whereas ‘hey say Find numerous retell establishments in thet ease trea catsying the identical manufacturer's product. A third Season for # smaller evoked sot ie the difficalty of obtain~ ing adequate pre-purchase information about services. Faced with che difficult task of collecting and evaluating Gxperfence qualities, consumers may ancisfice by selecting, the First acceptable alternative rather than mexinize by considering and evaluating all available elternatives. aypotheate with products, For nonprofessional services, consuners’ decisions often ‘tail choices between performing the services for then Selves and hiring soneote else to perfors then. Working Wives may choose between cleaning thetr oun houes oF hLe~ ing housekeepers, between altering their fazilses" clothes or taking then to tailor, even between staying howe to, ake care of the children or engaging a day care center to provide child care, Meny other services, including Lam grey tax preparation, ané restaurant peala, involve doct- Siond where coneusers’ may consider themwelves as sources oF supply. Hypothesis Yor many nonprofeestonal services, the consuner's evoked set frequently in eludes self=proviaion of the service. The rate of diffusion of an innovation depends on consuners! perceptions of the innovation vith regard to five charac Eeristics: clative advantege, compatibility, communica bility, divieibatity and complexity (Ropers 1962). A pro- duce which hao relative edvantage over exiating or com peting products, that is compatible with existing norns, Yelues and behaviors, thet is communicable, and that is di- Wisible (ive, that can be tried or tested on a inited basis) diffuses more quickly ehan others. fh product viich ia complex, Lees, aifficult to understand or Use, é4ffust nore slovly chan’ other Considered as a grovp, services are lees comunteable, leas Atvistble, sore complcx, end probebly less compatible’ thea goods. They are Lese communicable because they are intan~ Bible’ (estes their features cannot be displayed, ilsatra— teed or compared) and because they are often unsque to cach buyer (ae in a medical diagnosis or dental care)- Services are ese divisible because they are usually inpoasible, to Semple ox test ons linieed baris (e.g., how dose one "sam Plea nedical diagnosis? a lawyer's services in settling Edivorce? even a haircut). Services are frequently sore Complex than goods because they aro corposod of a bundle of Gkeforeot attributes, not sll of which will be offered to Finslly, services may be inconpatible with existing values Sand behaviors, eapecially if consuners ere accustoaed to provising the services for themselves. As an illustration, Consider a novel day care center which cooks breakfast for" Mothers children eo that parents can arrive at work early. Sccustoned eo performing thie service for thelr children Change fn habit, in behavior, even in values. Hypothesis 7: Consumers adopt innovations in services nore slowly then chey adopt innovations in goods: Perceived Risk Bighier and Langeard (1977) report that French managers be- Lieve the level of perceived risk to be higher for consun~ ‘ere purchasing services aa opposed co physics) goods, while Sone’ degree of perceived risk probably secompantes ail pur~ Chase transactions, more risk would agpear to be avolved Sh the purchase of services than in the purchase of goods because services are intangible, nonstandardized, and are oually sold withour guarantecs oF warranties. Firot, the datengible nature of services and their high levels of experience qualities imply that services gener ally must be selected on the basis of Less pre-purchase Information than ie the cate for products. Since reoeerch Gon and Rich 1967, Spence et al. 1970, aad others) eo gests that a decrease in the amount and/or qualiey of snfo~ Fastion usuelly ie sceonpanied by s concomitant sncrease ia perceived tisk, the purchating of services may involve more perceived Fisk'than the purchasing of good: Second, consumers may perceive more risk to be sssceteted with the purchase of services because they are nonctand: ised, Even though a coneuaer may have purchased the same service (eng., haircut) in his oF her 1ifetine, there vill Slwaye be recurring uncertainty shout che outeone and cone Sequences each time the service i= purchased. ‘Tied, service purchases may involve more perceived risk than product purchases becauso, with few exceptions, 2cr~ ices are not accompanied by warranties oF guarancese. The Hsoacietied service purchaser can rarely "return" 8 36r~ ‘vice since he haw alzesdy consumed it by the tine he real ges his Cissatisfaction, Finally, moy services (e.g. medical diagnosis or pest Conteal) ave eo tochnical or specializes thar conaumers possess neither the Inovledge nor the experience to eval tate whether they are satiated, even after they have con Consurers perceive greater riske when buying servicer than when buying prom Hypothesis Brand Loyalty ‘The degree to which consumers are coundtted to particular brands of goods of services dopende on 4 number of factors costa of changing brands, the avaslabeisey of eubscitutes, the porcoived risk sesceiated with the purchase, and the degree to which chey have obtained satisfaction in the past. Because it tay be more costly to change brands of services because dt may be more difficult to be avare of che avatl~ ability of qubseseutes, and because higher risko may eccom peny eervices, consumers may tond to be more brand Loyal with eerviese than with goods. Greater search coats and wonetary costs may be involved tn hanging brands of services thm in changing breads of pooda. Becnuse of the eifficulty of obtaining intormetion ‘out services, consumers aay be uncvare of citernatives the ability of alternatives £0 snerease satiafeceion over present brands. Yonetary fees nay sccoupany brand ovivch= {ing in meny services: physicians often Tequire complete physicals on the initial vieits dentists sonctines denand new Scrayer and day cave centers frequently charge "wea ‘st the outset to obsain Long-tera coumieweate