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Chapter 3

CUSTOMER EXPECTATIONS OF SERVICES

McGraw-Hill McGraw-Hill

© 2000 The McGraw-Hill Companies © 2000 The McGraw-Hill Companies

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SM

Customer Expectations of Service

‡ Customer expectations are standards or reference points of performance against which service experiences are compared.

McGraw-Hill

© 2000 The McGraw-Hill Companies

SM

Objectives for Chapter 3: Customer Expectations of Service

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‡ Recognize that customers hold different types of expectations for service performance ‡ Discuss controllable and uncontrollable sources of customer expectations ‡ Distinguish between customers¶ global expectations of their relationships and their expectations of the service encounter ‡ Acknowledge that expectations are similar for many different types of customers ‡ Delineate the most important current issues surrounding customer expectations
McGraw-Hill © 2000 The McGraw-Hill Companies

4 Possible Levels of Customer SM Expectations McGraw-Hill © 2000 The McGraw-Hill Companies .

5 SM Types of Expectations ‡ Customers have different expectations of services ‡ Desired service ± the level of service the customer hopes to receive ‡ Adequate service ± the level of service the customer will accept McGraw-Hill © 2000 The McGraw-Hill Companies .

Whether customers hold the same or different expectation levels for service firms in the same industry? ‡ For eg: are desired service expectations same for all firms in the same category? ‡ Similarly are adequate service expectations same for all firms in the same category? McGraw-Hill © 2000 The McGraw-Hill Companies .6 SM QUESTION? ‡ Q.

7 Figure 3-1 3- SM Dual Customer Expectation Levels (Two levels of expectations) Desired Service Zone of Tolerance Adequate Service McGraw-Hill © 2000 The McGraw-Hill Companies .

8 SM Zone of Tolerance The Zone of Tolerance---The extent to Tolerance ‡ which customers recognize and are willing to accept variation in service performance ‡ Range or window in which customers do not notice service performance. ‡ When service falls outside the range (either very high or very low). McGraw-Hill © 2000 The McGraw-Hill Companies . the service gets the customer¶s attention in either a positive or negative way.

9 SM Figure 3-2 3- The Zone of Tolerance Desired Service Zone of Tolerance Adequate Service McGraw-Hill © 2000 The McGraw-Hill Companies .

When price increases zone of tolerance becomes narrow. McGraw-Hill © 2000 The McGraw-Hill Companies .10 SM Zone of Tolerance ‡ Zone of tolerance fluctuates with the customer ‡ Different customers possess different zones of tolerance ‡ It may depend on factors such as price.

The willingness to help customers and provide prompt service. The knowledge and courtesy of employees and their ability to convey trust and confidence. personnel. ‡ Empathy. The caring. The appearance of physical facilities. equipment. ‡ Assurance.11 SM 5 Dimensions of Service Quality McGraw-Hill ‡ Reliability. ‡ Tangibles. and communication materials. The ability to perform the promised service dependably and accurately. individualized attention © 2000 The McGraw-Hill Companies . ‡ Responsiveness.

Zeithaml. L. Berry.´ Desired Service Zone of Tolerance Adequate Service Tangibles © 2000 The McGraw-Hill Companies Source: L. Parasuraman. ³Ten Lessons for Improving Service Quality. personnel. etc.´ Reliability ³The appearance of physical facilities.5 12 SM Zones of Tolerance for Different Service Dimensions Desired Service Level of Expectation Zone of Toleranc Adequate Service e ³The ability to perform the service dependably & accurately. A. McGraw-Hill . Report No. 93-104 (May 1993).Figure 4. and V. A.´ Marketing Science Institute.

SM Zone of Tolerance and Importance of Service Dimensions 13 ‡ as a service dimension becomes more important zone of tolerance will narrow and desired and adequate levels will increase McGraw-Hill © 2000 The McGraw-Hill Companies .

Figure 3-5 3- 14 SM Factors that Influence Desired Service Enduring Service Intensifiers Desired Service Personal Needs Zone of Tolerance Adequate Service McGraw-Hill © 2000 The McGraw-Hill Companies .

stable factors that lead to heightened sensitivity to service This can be further divided into Derived Service Expectations and Personal service Philosophies McGraw-Hill © 2000 The McGraw-Hill Companies .15 SM ‡ Personal needs include physical. psychological categories ‡ Enduring service intensifiers are individual. social.

16 SM ± Derived service expectations. generic attitude about the meaning of service and the conduct of employees. ± Personal service philosophy. The customer¶s underlying. McGraw-Hill © 2000 The McGraw-Hill Companies . Expectations driven by another group of people.

Figure 3-6 3- 17 SM Factors that Influence Adequate Service Transitory Service Intensifiers Desired Service Zone of Tolerance Adequate Service Perceived Service Alternatives Self-Perceived Service Role Situational Factors McGraw-Hill © 2000 The McGraw-Hill Companies .

18 SM McGraw-Hill © 2000 The McGraw-Hill Companies .

‡ Perceived Service Alternatives. ‡ There are 5 types of factors ‡ Temporary service intensifiers. McGraw-Hill © 2000 The McGraw-Hill Companies .SM Factors That Influence Adequate Service Expectations 19 ‡ Are short-term in nature and fluctuate more than the factors that influence desired expectations.

SM Factors That Influence Adequate Service Expectations 20 ‡ Customer¶s Self Perceived service role ‡ Situational factors ‡ Predicted Service McGraw-Hill © 2000 The McGraw-Hill Companies .

SM Factors That Influence Adequate Service Expectations 21 ‡ Transitory/Temporary service intensifiers --.short-term. individual factors that make a consumer more aware of the need of the service eg: a personal emergency ‡ Transitory service intensifiers ± temporary ± a computer breakdown will be less tolerated at financial year-ends McGraw-Hill © 2000 The McGraw-Hill Companies .

SM Factors That Influence Adequate Service Expectations 22 ‡ Perceived Service Alternatives---‡ Perceived Service Alternatives. ‡ As the number of alternatives increases. Other providers from whom the customer can obtain the service. the level of adequate service increases and the zone of tolerance narrows McGraw-Hill © 2000 The McGraw-Hill Companies .

Customer perceptions of the degree to which customers control the level of service they receive. Service performance conditions that customers view as beyond control of the provider. ‡ Situational factors. McGraw-Hill © 2000 The McGraw-Hill Companies .23 SM Sources of Adequate Service Expectations (cont¶d) ‡ Self-perceived service role.

24 SM Situational Factors ‡ Natural Disasters ‡ Time constraints ‡ Emergency McGraw-Hill © 2000 The McGraw-Hill Companies .

The level of service customers predict they are likely to get. McGraw-Hill © 2000 The McGraw-Hill Companies .25 SM Predicted Service ‡ Predicted service.

McGraw-Hill © 2000 The McGraw-Hill Companies . ‡ Eg patient in the doctor¶s waiting room.26 SM Predicted Service ‡ The level of service customers believe they will get. It is an estimate or calculation of the service a customer will receive in an individual transaction rather than in the overall relationship with a service provider.

McGraw-Hill © 2000 The McGraw-Hill Companies . ‡ Whereas desired and adequate service expectations are global assessments comprising many individual transactions. predicted service is always an estimate of what will happen in the next service encounter or transaction.27 SM Predicted Service ‡ If customer predict good service their levels of adequate service are likely to be higher than if they predict poor service.

Figure 3-7 3- 28 SM Factors that Influence Desired and Predicted Service Explicit Service Promises Implicit Service Promises Word-of-Mouth Desired Service Zone of Tolerance Adequate Service McGraw-Hill Past Experience Predicted Service © 2000 The McGraw-Hill Companies .

Service-related cues other than explicit promises that lead to inferences about what the service should © 2000 The McGraw-Hill Companies .29 SM Factors That Influence Desired and Predicted Service ‡ Explicit service promises. Personal & nonpersonal statements about the service made to customers. ± Q: Are these within control of the service provider? ± Q: How are these ³promises´ made? McGraw-Hill ‡ Implicit service promises.

other communications --.SM Factors that Influence Desired and Predicted Service 30 ‡ Explicit --. contracts. ± Distribution .price directly related to predicted service and inversely related to width of zone.multiple outlets McGraw-Hill © 2000 The McGraw-Hill Companies .usually increases desired level and narrows zone ‡ Implicit--.personal and nonpersonal statements from the organization--Advertising. personal selling.---service related cues -Tangibles -± Price -.

McGraw-Hill © 2000 The McGraw-Hill Companies . restaurants).. Statements made by parties other than the organization about the service. ± W of M is most important with services that are difficult to evaluate before purchase or direct experience (e.g. auto repair.31 SM Factors That Influence Desired and Predicted Service ‡ Word-of-mouth communication. medical care.

the greater the likelihood of word-of-mouth messages. the greater the likelihood of unfavorable word-of-mouth. The opposite effect also is true the more horrible the service. The more outstanding and unique the service. McGraw-Hill © 2000 The McGraw-Hill Companies .32 SM ± The most likely carriers of favorable W of M communications are customers well-pleased with a company¶s service.

How does a company exceed service expectations? McGraw-Hill © 2000 The McGraw-Hill Companies . Should a company try to ³delight´ the customer ‡ Q3.SM Issues involving Customer Service Expectations 33 ‡ Q1. what does a service marketer do if service expectations are unrealistic? ‡ Q2.

How does a service company stay ahead of competition in meeting customer expectations? McGraw-Hill © 2000 The McGraw-Hill Companies .SM Issues involving Customer Service Expectations 34 ‡ Q4. Do customer service expectations continually escalate? ‡ Q5.

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