2.

1 Consumer Behavior in
Services
Dr. Tanvi Gupta
 Consumer Behavior
Consumer orientation lies at the heart of
marketing concept CB defined as actions and
beliefs that guide a person to purchase a
particular product or service
` Consumer mind is still closed to the outside
world- like a black box that remains sealed
Can observe inputs (information) but never
know the act of processing inputs
C behavior deals with i Factors ii process
 Three stage model
Three stage model- Purchase stage,
Consumption stage, Post purchase stage
I Pre Purchase Stage -Purchase of service involves
following steps
A Stimulus-social , commercial or physical cue that
incites purchase
B Problem Awareness - Realises need to do something
Seek solution to aroused needs (unsatisfied
condition),want( more satisfaction)
Needs -due to: People’s unconscious minds (eg
aspirations) -Physical conditions (e.g., chronic back
pain) -External sources (e.g., marketing activities)
 I Pre Purchase Stage
C Information Search- seldom considers all
feasible alternative; has limited list of options -
awareness set , evoked set- actually remembers
at time of decision making; and consideration set
of alternatives-those considered unfit eliminated
internal source- e.g. memory-previous purchase ;
external search-Advertisement, Dealer, Family,
neighbor, Friends;
 I Pre Purchase Stage
SC1 Importance of Personal Source of
Information
WOM, Reference, Opinion leaders
Personal source given more importance than
company controlled communication when
i) purchase to be made has greater risk, medical
ii) More complex services iii) non availability of
non personal source- restrictions on Adv. medical,
iv)Professional S providers lack knowledge to
communicate or feel uncomfortable marketing their
service
 I Pre Purchase Stage
SC2 Fewer Alternatives Considered than
Goods when
a) lack of available pre purchase information-
not aware of available alternatives
b) Smaller number of establishments
providing the service
c) Self service as a viable alternative –IGL self
generation of bill
 I Pre Purchase Stage
D Evaluation of Alternatives- Non systematic –
e g. intuition; Systematic- Multi attribute model,
Weights of each criteria
SC3 -PERCEIVED RISK –service buyer, higher risk-
if i) consequences of action by C can’t be
predicted with certainty & ii) can be unpleasant
Dimensions- Degree of importance ; Danger of
outcome;
iii uncertainty- the subjective possibility of
occurrence of the outcomes e.g. surgery
 I Pre Purchase Stage
a Types of Risk
i) Functional Risk –product fail to function according to his
expectations
ii) Financial Risk –monetary loss, unexpected extra costs
iii) Physical Risk – physical safety of the customer by using services-
personal injury etc
iv) Psychological Risk –harm to one’s self image by making a poor
service- fears and negative emotions
v) Social Risk –to face social embarrassment as a result of make a
poor service choice.
vi) Time Risk- search and locate service -if S does not confirm to the C
expectations.
 I Pre Purchase Stage
b Risk and Standardization – heterogeneity-
difficult to standardize or predict quality – difficult to
replicate experience
In high involvement service- inseperatability-
uncertainty of consequence- particularly physical
consequences , say dental care
c Risk and Information- higher risk -limited
information available before purchase
Goods & services possess 3 different type of attributes
i. Search attribute- Attributes which can be evaluated
before purchase of a product like style, color, taste ;
Courtesy, ambience, mannerism, convenience not easy
 I Pre Purchase Stage

ii. Experience attribute- can be determined or

evaluated only after the purchase—must
“experience” the service to know what they
are getting. Like- Holidays, sporting events,
iii. Credence attribute- Attributes that
customers find impossible to evaluate
confidently even after purchase Effect of
nutrition food, professional services
 I Pre Purchase Stage
d Risk and Brand Loyalty – In high risk
services, less likely to switch, if satisfied with
current supplier-eg. physician, surgeon
loyalty high ,if limited number of alternatives
& if switch cost is high
Search cost -time Learning cost -
Cognitive cost -knowing new Emotional cost
Customer habit Loyal customer discount
 II Consumption Stage
Price is often a key factor in the purchase decision
Consumer may make I) store choice- particular
outlet or a II) non store choice- on line purchase
Activities of a) buying ,b) using & c)disposing of
waste, if any, is referred as consumption process
But in Services- a single phase as S are intangible
Understanding consumers choice of alternative is
important for management decision making
 II Consumption Stage
Production ,consumption involves sequence of
personal interactions( face to face,
telephone.), evaluation not only after use but
during production- Services produced and
consumed simultaneously.
Chance of being able to directly influence the
evaluation e. g. a restaurant manager catch
the problem during consumption and change
evaluation
III Post Purchase Evaluation Stage
The post stage evaluation is all about customer
satisfaction- an outcome of marketing process
CS achieved when Customer perception meets or
exceeds customer expectations A satisfied
customer becomes brand loyal, gives positive
feedback to others about the service.
CS is an end in itself but leads to C loyalty-
reputation-positive WOM- Sales & profitability
Customer may experience Cognitive Dissonance,
Reinforcement is important
 Post Choice Considerations
Post purchase evaluation – a complex process
Number of social ,psychological and situational
variables affecting the customers perception
S satisfaction relies on four elements of
SERVCTION -contact personnel , inanimate
environment, customer and internal org.
Interpersonal interactions-client v client, client v
employees & human service scape- employees v
working environment, supporting facilities etc.
are also important
 Post Choice Models- I The
Expectancy Disconfirmation theory
Simplest and most powerful model
Customers evaluate services by comparing
expectations with perceptions
If the perceived service is better than or equal
to expected service then consumers are
satisfied.
Thus, effective management of Customer
perceptions and expectation is important
 Post Choice Models- I The
Expectancy Disconfirmation theory
It is perceived service, not actual that matters
Eg. high rise hotel-complaints about speed of
elevator- mirror
Also possible to manage expectations eg. –a
hotels advertisement about what to expect
and what not to expect at a particular price
lowers customers expectations
 Post Choice Model- II
The Perceived Control Perspective
During service experience, higher the level of
control over the situation perceived by
consumer, higher their satisfaction with the
service will be
But impacts economic situation of firm –firm
wants control
Two types of control-i) behavioral, and ii)
cognitive-to know what is happening - when what is
happening is predictable , feel in control say delay in flight-
how long will it take
 Post Choice Model- II
The Perceived Control Perspective
Important strategic issue pertaining to
perceived control perspective is trade off
between predictability ( standardization) &
amount of choice (customization)
Both can contribute to the sense of control-
important to determine which is more
powerful in a situation.
 Post Choice Model- III
The Script Perspective
Proposes that rules determined by social and
cultural variables exist to facilitate interactions in
daily events including variety of service
experience
That in a service encounter, customer follow
scripts and
Their satisfaction is a function of script
congruence-whether actual scripts performed by
customer and staff are consistent with expected
script
 Post Choice Model-
The Script Perspective
Key managerial implications
a-design script that are capable of fulfilling
needs of both consumer and service provider
b- communicate these scripts to both so that
both have realistic perceptions & expectations
E.g. tipping a food provider is customary in
many countries but considered insult in some