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GURU GHASIDAS VISHWAVIDYALAYA

(A CENTRAL UNIVERSITY ESTABLISHED BY CENTRAL UNIVERSITIES ACT, 2009)

BILASPUR (C.G.) 495009

DEPARTMENT OF MANAGEMENT STUDIES MASTER OF BUSINESS ADMINISTRATION PROGRAMME (M.B.A.) SESSION: 2012-13
M.B.A. 4th Sem. SUBJECT: MARKETING OF SERVICES TOPIC: Consumer behavior in services

Submitted To:
DR. (MRS) BOBBY B.PANDEY ASSISTANT PROFESSOR

Submitted By:
RAJU KUMAR

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S.NO.

CONTENT

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Introduction Factors influencing consumer behaviour Customer behaviour specific to usage of services Levels of Customer Contact with Service Organizations The Purchase Process for Services Factors that Influence Customer Expectations of Services: How Product Attributes Affect Ease of Evaluation Service Marketing System A Framework for Developing Effective Service Marketing Strategies

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Four Categories Of Services conclusion Bibliography

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and society in general. to the end of the cycle. Customer behaviour study is based on consumer buying behaviour. With that in mind. 3 . neutrality. the consumer (Kioumarsi et al. the productive system is considered from its beginning at the production level. with the customer playing the three distinct roles of user. A greater importance is also placed on consumer retention. services. or organizations and the processes they use to select. 2009) . customisation and one-to-one marketing. Research has shown that consumer behaviour is difficult to predict. payer and buyer. Each method for vote counting is assumed as social function but if Arrow’s possibility theorem is used for a social function. homogeneity and weak and strong Pareto optimality. It also tries to assess influences on the consumer from groups such as family. No social choice function meets these requirements in an ordinal scale simultaneously. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants. anonymity. even for experts in the field. customer relationship management. personalisation. groups. Marketing provides services in order to satisfy customers. reference groups. Some specifications of the social functions are decisiveness. It attempts to understand the decision-making processes of buyers. and dispose of products. secure.Consumer behavior in services Introduction Consumer behaviour is the study of individuals.. friends. unanimity. Social functions can be categorized into social choice and welfare functions. monotonicity. experiences. both individually and in groups. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. Relationship marketing is an influential asset for customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It blends elements from psychology. social anthropology and economics. sociology. social welfare function is achieved.

What is consumer Interest ? Every customer shows inclination towards particular products and services. 4 . In simpler words a consumer is one who consumes goods and services available in the market. mind set and ability to spend. In the above examples. The store manager showed them the best dresses available with him. Example . need and of course pocket. Consumer interest is nothing but willingness of consumers to purchase products and services as per their taste. In the above example Sandra and Maria had similar requirements but there was a huge difference in their taste.Before understanding consumer behaviour let us first go through few more terminologies: Who is a Consumer ? Any individual who purchases goods and services from the market for his/her end-use is called a consumer.Tom might purchase a tricycle for his son or Mike might buy a shirt for himself. Let us go through the following example: Both Maria and Sandra went to the nearby shopping mall to buy dresses for themselves. Maria immediately purchased two dresses but Sandra returned home empty handed. The dresses were little too expensive for Sandra and she preferred simple and subtle designs as compared to designer wears available at the store. both Tom and Mike are consumers.

5 . social.What is Consumer Behaviour ? Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services for his end use. economic and so on. Why do you think an individual buys a product ? Need Social Status Gifting Purpose Why do you think an individual does not buy a product ? No requirement Income/Budget/Financial constraints Taste When do you think consumers purchase products ? Festive season Birthday Anniversary Marriage or other special occasions There are in fact several factors which influence buying decision of a consumer ranging from psychological.

According to Belch and Belch. The main catalyst which triggers the buying decision of an individual is need for a particular product/service. 6 . In the same way during Valentines week. Consumers purchase products and services as and when need arises. individuals are often seen purchasing gifts for their partners. Following are the sources of information: Personal Sources Commercial Sources Public Sources Personal Experience Perception also plays an important role in influencing the buying decision of consumers. the buying tendencies of consumers increase as compared to other months. whenever need arises. In a layman’s language consumer behaviour deals with the buying behaviour of individuals. a consumer searches for several information which would help him in his purchase. Fluctuations in the financial markets and recession decrease the buying capacity of individuals.The study of consumer behaviour explains as to: Why and why not a consumer buys a product ? When a consumer buys a product ? How a consumer buys a product ? During Christmas.

Not all promotional materials and advertisements excite a consumer. 01. Cultural Factor 02. wants. A consumer does not pay attention to everything he sees. and cultural influences on buying behaviour may vary greatly from country to country. 7 . Psychological Factor. a consumer goes through also called selective exposure. He would obviously not remember something which has nothing to do with his need. A consumer would certainly buy something which appeals him the most. and behaviours learned by a member of society from family and other important institutions. 01. Factors influencing consumer behaviour Consumer purchases are influenced strongly by or there are four factors. He is interested in only what he wants to see. He would remember the most relevant and meaningful message also called as selective retention. Cultural Factor :Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social Class Culture:-The set of basic values perceptions. promotional materials. advertisements. Social Factor 03. Every group or society has a culture. Consumer interpretation refers to how an individual perceives a particular message.Buying decisions of consumers also depend on the following factors: Messages. Culture is the most basic cause of a person’s wants and behaviour. Personal Factor 04. Such behaviour is called selective attention.

Some are secondary groups. A person’s behavious is influenced by many small groups. Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Many sub culture make up important market segments and marketers often design products. social classes are society’s relatively permanent and ordered divisions whose members share similar values. These includes organizations like religious groups. Social Factors :A consumer’s behaviour also is influenced by social factors. wife and children on the purchase of different products and services. Some are primary groups includes family. The family is the most important consumer buying organization society and it has been researched extensively.Two or more people who interact to accomplish individual or mutual goals. neighbours and coworkers. 8 . Sub culture includes nationalities. Social Class:. Family:Family members can strongly influence buyer behaviour. friends.Sub Culture :. Marketers are interested in the roles.Almost every society has some form of social structure. racial group and geographic regions. such as the (i) Groups (ii) Family (iii) Roles and status Groups :. Groups that have a direct influence and to which a person belongs are called membership groups. professional association and trade unions. 02. interests and behaviour. religions. and influence of the husband.A group of people with shared value systems based on common life experiences and situations. which are more formal and have less regular interaction.

and recreation are often age related. Blue collar workers tend to buy more rugged work clothes. computer software companies will design different products for brand managers. Age and Life cycle Stage:People changes the goods and services they buy over their lifetimes. Economic situation :A person’s economic situation will affect product choice 9 . organizations. family. clubs. Tastes in food. can even specialize in making products needed by a given occupational group. Thus. A Co. Personal Factors :It includes i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv) Life Style (v) Personality and self concept. etc. lawyers. in his family he plays the role of husband. clothes. furniture. Buying is also shaped by the stage of the family life cycle. he plays the role of manager. accountants. and doctors. whereas white-collar workers buy more business suits. 03. A Role consists of the activities people are expected to perform according to the persons around them.Roles and Status :A person belongs to many groups. engineers. For example. Occupation :A person’s occupation affects the goods and services bought. The person’s position in each group can be defined in terms of both role and status. M & “X” plays the role of father. in his company.

fashion. Products) Personality and Self concept :Each person’s distinct personality influence his or her buying behaviour. hobbies. support etc) interest (Food. 04. i. activities (Work. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. understanding these forces involves measuring consumer’s major AIO dimensions. 10 .e. i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes Motivation :Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need Perception :The process by which people select. Learning:Changes in an individuals behaviour arising from experience. family recreation) and opinions (about themselves. Business. Organize. Psychological Factors :It includes these Factors. shopping.Life Style :Life Style is a person’s Pattern of living. and interpret information to form a meaningful picture of the world.

g.g. a Person’s consistently favourable or unfavourable evaluations.specify information upfront and later receive documentation of coverage 11 . Hotel stay): customer is physically involved throughout entire process – Possession processing (e. weather forecast): involvement is mental.g.. health insurance): involvement is mental .. here customer simply receives output and acts on it – Information processing (e. Since such beliefs and attitudes make up brand image and affect consumer buying behavior therefore marketers are interested in them. DVD repair): involvement may be limited to drop off of physical item/description of problem and subsequent pick up – Mental stimulus processing (e.Beliefs and attitudes :Belief is a descriptive thought that a person holds about something Attitude.. Customer behaviour specific to usage of services: Where Does the Customer Fit in a Service Organization? • Consumers rarely involve in manufacture of goods but often participate in service creation and delivery • Challenge for service marketers is to understand how customers interact with service operations – People processing (e. not physical. feelings.g. and tendencies towards an object or idea.. Customer possesses specific belief and attitude towards various products. Marketers can change the beliefs and attitudes of customers by launching special campaigns in this regard.

g.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 arm’s length through electronic or physical distribution channels New technologies (e. Web) help reduce contact levels Levels of Customer Contact with Service Organizations : 12 .

A customer would be in this buying situation when the offer is totally unfamiliar. • Extensive problem solving/ Critical problem solving/New task. travel package. liquid liril body soap.Howard & Sheth: • Straight Re. Like insurance.Buy/Routinized response behavior.Here the customer is aware of the category/brands but not the new version or form. vacations etc. Liril soap. 13 .say for photocopying. Low involvement with the purchase process.here the customer comes for repurchase of the same service product. The customer is aware of the service product/brand. • Modified Re-buy/ Limited problem solving. he is not clear either about his decision criteria or evaluation criteria. bank draft. these are high involvement purchasing processes so consumer would require time.The consumer’s mind is like a ‘Black Box’: Three Buying situations of consumer. the purchase is of daily/frequent necessity.

Roles in Service-Buying Behavior: • • • • • • • Initiator/Influencer Information gatherer Gatekeepers The devil’s advocate Decider Buyer/purchaser User 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. 14 .

role model desired behavior Thoughtless or badly behaved customers can cause problems for service personnel (and other customers) • Must educate customers.Managing Service Encounters--2 • • • Service success often rests on performance of junior contact personnel Must train. clarify what is expected. coach. manage behavior. 15 .

The Purchase Process for Services purchase Stage    Awareness of need Information search Evaluation of alternative service suppliers Service Encounter Stage • • Request service from chosen supplier Service delivery 16 .

Role of branding. emotions and personal influences . Role of mood. Information and search qualities Evaluation of service alternatives – – – – Problems of comparing service offers.Post-purchase Stage • • Evaluation of service performance Future intentions Awareness of need. delays lead to problems Physical – personal injury. Customers as competition for service delivery. Service encounter Post purchase evaluation by customers. Perceived Risks in Purchasing and Using Services: Functional – unsatisfactory performance outcomes • • • • • • Financial – monetary loss. unexpected extra costs Temporal – wasted time. damage to possessions Psychological – fears and negative emotions Social – how others may think and react Sensory – unwanted impacts to any of five senses 17 .

• Predicted Service Level: service level that customer anticipates/ believes firm will actually deliver • Zone of Tolerance: range within which customers are willing to accept variations in service delivery Factors that Influence Customer Expectations of Services: Intangible Attributes.Components of Customer Expectations: • Desired Service Level: The type of service customers hope to receive in terms of desired service. Variability. and Quality Control Problems Make Services Hard to Evaluate • Search attributes – Tangible characteristics that allow customers to evaluate a product before purchase 18 . It’s a “wished-for” level of service quality that customer believes can and should be delivered • Adequate Service Level: It is a minimum acceptable level of service that the customer will expect without being dissatisfied.

services tend to be higher in experience and credence attributes • Credence attributes force customers to trust that desired benefits have been delivered How Product Attributes Affect Ease of Evaluation: Customer Satisfaction is Central to the Marketing Concept • Satisfaction defined as attitude-like judgment following a service purchase or series of service interactions • Customers have expectations prior to consumption. observe service performance. compare it to expectations 19 .• Experience attributes – Characteristics that can be experienced when actually using the service • Credence attributes – Characteristics that are difficult to evaluate confidently even after consumption • Goods tend to be higher in search attributes.

excitement) Positive affect (e. surprise.. equipment. price/quality tradeoffs.g.g. personal and situational factors • Research shows links between customer satisfaction and a firm’s financial performance Customer Delight: Going Beyond Satisfaction • Research shows that delight is a function of 3 components – – – • Unexpectedly high levels of performance Arousal (e. and personnel Service Delivery (front stage) • Where “final assembly” of service elements takes place customers • Includes customer interactions with operations and other customers 20 and service is delivered to . Includes facilities. joy. or happiness) Is it possible for customers to be delighted by very mundane services? A Service Business is a System Comprising Three Overlapping Subsystems Service Operations (front stage and backstage) • • Where inputs are processed and service elements created.• Satisfaction judgments are based on this comparison – – – Positive disconfirmation if better than expected Confirmation if same as expected Negative disconfirmation if worse than expected • Satisfaction reflects perceived service quality.. pleasure.

Credit Card 21 .g.Service Marketing (front stage) • Includes service delivery and all other contacts between service firm and customers Service Marketing System: (1) High Contact Service--e. Hotel Service Marketing System: (2) Low Contact Service--e...g.

A Framework for Developing Effective Service Marketing Strategies: A Framework for Developing Effective Service Marketing Strategies: \ 22 .

1): 23 . there are four categories of services:  People processing  Possession processing  Mental stimulus processing  Information processing Four Categories Of Services (Fig 2.Differences among Services Affect Customer Behavior:    Consumers are rarely involved in the manufacture of goods but often participate in service creation and delivery Challenge for service marketers is to understand how customers interact with service operations Based on differences in nature of service act (tangible/intangible) and who or what is direct recipient of service (people/possessions).

People Processing  Customers must:  Physically enter the service factory  Co-operate actively with the service operation  Managers should think about process and output from customer’s perspective  To identify benefits created and non-financial costs: ― Time. 24 . mental. physical effort Possession Processing    Customers are less physically involved compared to people processing services Involvement is limited Production and consumption are separable Mental Stimulus Processing    Ethical standards required when customers who depend on such services can potentially be manipulated by suppliers Physical presence of recipients not required Core content of services is information-based  Can be “inventoried” Information Processing    Information is the most intangible form of service output But may be transformed into enduring forms of service output Line between information processing and mental stimulus processing may be blurred.

and society in general. Customer behaviour study is based on consumer buying behaviour. both individually and in groups. or ideas to satisfy needs and the impacts that these processes have on the consumer and society. reference groups. It also tries to assess influences on the consumer from groups such as family. 25 . groups. with the customer playing the three distinct roles of user. friends. payer and buyer. It blends elements from psychology. It attempts to understand the decision-making processes of buyers. even for experts in the field. secure.CONCLUSION Consumer behaviour is the study of individuals. social anthropology and economics. sociology. services. Research has shown that consumer behaviour is difficult to predict. experiences. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants. or organizations and the processes they use to select. and dispose of products.

Bibliography 26 .