Consumer Behaviour In Services

Consumer Behaviour in Services

CONSUMER PROBLEM  TIME DEFICIENCY  REASONS: dual career couples, single

parent families  IT LEADS TO: demand for different services

SEARCH, EXPERIENCE & CREDENCE PROPERTIES  SEARCH QUALITIES: attributes that a

consumer can determine before the purchase  EXPERIENCE QUALITIES : attributes that a consumer can determine only after the purchase  CREDENCE QUALITIES : attributes that consumer may find impossible to evaluate even after purchase & consumption

Continuum of Evaluation for Different Types of Products/services

Medical diagnosis

Auto repair

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Root canals

Legal services

Television repair

Child care

{

Vacations

Restaurant meals

Automobiles

Houses

Furniture

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Jewelry

Clothing

High in search qualities

Haircuts

Most Services

Most Goods

High in experience High in credence qualities qualities

SERVICES - DECISION MAKING PROCESS Need awareness

Memory

Memory

Evaluation of service suppliers

Future Intentions Request service

Service delivery

UNDERSTANDING DIFFERENCES AMONG CONSUMERS  GLOBAL DIFFERENCES  ROLE OF CULTURE  DIFFERENT VALUES, ATTITUTEDS  DIFFERENT CUSTOMS

CUSTOMER EXPECTATION OF SERVICE  Customer expectations are the beliefs

about service delivery that serve as standards or reference points against which performance is judged.

LEVELS OF EXPECTATION

DUAL CUSTOMER EXPECTATIONS Desired Service

Adequate Service

THE ZONE OF TOLERANCE Desired Service Zone of Tolerance

Adequate Service

ZONES OF TOLERANCE FOR DIFFERENT SERVICE DIMENSIONS Desired Service

Zone of Tolerance Adequate Service

Desired Service Zone of Tolerance Adequate Service

Reliability

Tangibles

FACTORS THAT INFLUENCE DESIRED SERVICE Lasting Service Intensifiers

Desired Service Personal Needs

Zone of Tolerance Adequate Service

Lasting Service Intensifiers are individual, stable factors that lead the customer to a heightened sensitivity to service.

FACTORS THAT INFLUENCE ADEQUATE SERVICE

Temporary Service Intensifiers

Desired Service Perceived Service Alternatives

Self-Perceived Service Role

Situational Factors

Zone of Tolerance Adequate Service

Predicted Service

FACTORS THAT INFLUENCE DESIRED AND PREDICTED SERVICE

Explicit Service Promises

Implicit Service Promises

Word-of-Mouth

Desired Service Zone of Tolerance Adequate Service

Past Experience

Predicted Service

CUSTOMER PERCEPTION OF SERVICE  Customers perceive services in terms of

quality of service & how satisfied they are overall with their experiences.

CUSTOMER PERCEPTIONS OF QUALITY AND CUSTOMER SATISFACTION

BUILDERS OF CUSTOMER PERCEPTION  SINGLE TRANSACTION SPECIFIC

ENCOUNTER: how the customer has been treated in a particular encounter with a particular employee.  CUMULATIVE PERCEPTION: customer’s overall experience with the company.

CUSTOMER SATISFACTION  It is a judgment that a product or service

feature or the product or service itself provides a pleasurable level of consumption related fulfillment.  It is the customer’s evaluation of a product or service in terms of whether it has met the customer’s needs & expectations. Its failure leads to dissatisfaction.

DETERMINANTS OF CUSTOMER SATISFACTION  PRODUCT & SERVICE FEATURES  CUSTOMER EMOTIONS- your mood  ATTRIBUTION FOR SERVICE SUCCESS OR

FAILURE: how much the customer blames or credits the failure or success of a service on the service provider  PERCEPTION OF EQUITY OR FAIRNESS: have I been treated fairly compared to other customers?  PERCEPTION OF FAMILY MEMBERS, FRIENDS, PEERS ETC

OUTCOMES OF CUSTOMER SATISFACTION  Increased customer retention  Positive word-of-mouth communications  Increased revenues

RELATIONSHIP BETWEEN CUSTOMER SATISFACTION AND LOYALTY IN COMPETITIVE INDUSTRIES

Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.

SERVICE QUALITY  The customer’s judgment of overall

excellence of the service provided in relation to the quality that was expected.

 Service quality assessments are formed

on judgments of:   

outcome quality interaction quality physical environment quality

THE FIVE DIMENSIONS OF SERVICE QUALITY Reliability Assurance

Ability to perform the promised service dependably and accurately. Knowledge and courtesy of employees and their ability to inspire trust and confidence.

Tangibles

Physical facilities, equipment, and appearance of personnel.

Empathy

Caring, individualized attention the firm provides its customers.

Responsiveness Willingness to help customers and provide prompt service.

THE SERVICE ENCOUNTER  is the “moment of truth”  occurs any time the customer interacts with the firm  can potentially be critical in determining customer

satisfaction and loyalty  types of encounters: 

remote encounters, phone encounters, face-to-face encounters

 is an opportunity to:    

build trust reinforce quality build brand identity increase loyalty

Common Themes in Critical Service Encounters Research Recovery:

Adaptability:

employee response to service delivery system failure

employee response to customer needs and requests

Coping:

Spontaneity:

employee response to problem customers

unprompted and unsolicited employee actions and attitudes

UNDERSTANDING CUSTOMER EXPECTATION AND PERCEPTION THROUGH MARKETING RESEARCH Customer CUSTOMER

Expected Service

(Customer Gap) GAP 1

Perceived Service

COMPANY

Company

Company Perceptions of Consumer Expectations

WHY DO SERVICE RESEARCH?  To identify dissatisfied customers  To discover customer requirements or expectations  To monitor and track service performance  To assess overall company performance compared to      

competition To assess gaps between customer expectations and perceptions To gauge effectiveness of changes in service To appraise performance of individuals/teams for rewards To determine expectations for a new service To monitor changing expectations in an industry To forecast future expectations

CRITERIA FOR AN EFFECTIVE SERVICE RESEARCH PROGRAM  Includes both qualitative and quantitative      

research Includes both expectations and perceptions of customers Balances the cost of the research and the value of the information Includes statistical validity when necessary Measures priorities or importance of attributes Occurs with appropriate frequency Includes measures of loyalty, behavioral intentions, or actual behavior

STAGES IN THE RESEARCH PROCESS  Stage 1 : Define Problem  Stage 2 : Develop Measurement Strategy  Stage 3 : Implement Research Program  Stage 4 : Collect and Tabulate Data  Stage 5 : Interpret and Analyze Findings  Stage 6 : Report Findings

PORTFOLIO OF SERVICES RESEARCH Research Objective

Type of Research

Identify dissatisfied customers to attempt recovery; identify most common categories of service failure for remedial action

Customer Complaint Solicitation

Assess company’s service performance compared to competitors; identify service-improvement priorities; track service improvement over time

“Relationship” Surveys

Obtain customer feedback while service experience is fresh; act on feedback quickly if negative patterns develop

Post-Transaction Surveys

Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas

Customer Focus Groups

Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service

“Mystery Shopping” of Service Providers

Measure internal service quality; identify employeeperceived obstacles to improve service; track employee morale and attitudes

Employee Surveys

Determine the reasons why customers defect

Lost Customer Research

Forecast future expectations of customers; develop and test new service ideas

Future Expectations Research