Customer Behaviour in Service Encounters: Chapter 2-1

Chapter 2
Customer Behaviour
in Service Encounters
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 2- 1
How Differences among Services
Affect Customer Behaviour
Differences among Services Affect
Customer Behaviour
 Consumers often involved in service production and may have

preferences for service delivery
 Service marketers need 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),
there are four categories of services:
 People processing
 Possession processing
 Mental stimulus processing
 Information processing
Four Categories of Services (Fig 2.1)
Who or What Is the Direct Recipient of the Service?

Nature of the Service Act People Possessions
Tangible Actions People processing Possession processing
(services directed at (services directed at

people’s bodies): physical possessions):
 Barbers  Refueling
 Health care  Disposal/recycling

Intangible Actions Mental stimulus Information processing
processing
(services directed at
(services directed at intangible assets):
people’s minds):
 Education
 Accounting
 Advertising/PR
 Banking
Four Categories Of Services
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, mental, physical effort
Possession Processing
Possession Processing
 Customers are less physically

involved compared to people
processing services
 Involvement is limited
 Production and consumption

are separable
Mental Stimulus Processing
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 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.
Customer Decision Making:
Three-Stage Model of Service
Consumption
The Purchase Process for Services
Prepurchase Stage
Service Encounter
Stage
Post-Encounter Stage
Prepurchase Stage
Prepurchase Stage: Overview
 Customers seek solutions to

Prepurchase Stage 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
Post-Encounter Stage expectations
 Making a service purchase

decision
Service Encounter Stage
Service Encounter Stage: Overview
 Service encounters range from high- to

Prepurchase Stage low-contact
 Understanding the servuction system
 Service marketing systems: high-

contact and low-contact
Service Encounter  Role and script theories

Stage
 Theatre as a metaphor for service
delivery: An integrative perspective
 Implications for customer

participation in service creation and
delivery
High Versus Low Contact Services
 Service marketers must manage the ways customers

encounter the service organization
 Each element they encounter must be consistent or the

organization’s credibility is weakened
 High contact services present marketing challenges

 More contact points, more moments of truth
 Requires consistent messaging at each contact point
 Low contact services have less contact points with higher

importance
 Customer more reliant on the contact point chosen
 Importance of self service technology (SST) that works
The Servuction System =
Service + Production
 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 and visible to customers
 Includes customer interactions with operations and other customers
 Service Marketing (front stage)

 Visible part of service operations, service delivery and other
contact points
Post-Encounter Stage: Overview
Prepurchase Stage
 Evaluation of service
performance
Service Encounter
Stage  Future intentions
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
 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, price/quality tradeoffs,

personal and situational factors
 Research shows links between customer satisfaction and a firm’s

financial performance

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Chapter 2

 Consumers often involved in service production and may have

Who or What Is the Direct Recipient of the Service?

(services directed at (services directed at

 Health care  Disposal/recycling

 Managers should think about

 Customers are less physically

 Production and consumption

Mental Stimulus Processing

 Ethical standards required when

 Physical presence of recipients

 Core content of services is

 Information is the most

 But may be transformed into

 Line between information

 Customers seek solutions to

 Evaluating a service may be

 Uncertainty about outcomes

 Understanding customers’ service

 Making a service purchase

 Service encounters range from high- to

 Understanding the servuction system

 Service marketing systems: high-

Service Encounter  Role and script theories

 Implications for customer

 Service marketers must manage the ways customers

 Each element they encounter must be consistent or the

 High contact services present marketing challenges

 Low contact services have less contact points with higher

 Service Operations (front stage and backstage)

 Service Delivery (front stage)

 Service Marketing (front stage)

 Customers have expectations prior to consumption, observe service

 Satisfaction judgments are based on this comparison

 Satisfaction reflects perceived service quality, price/quality tradeoffs,

 Research shows links between customer satisfaction and a firm’s

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