Service Consumer Behavior

Module II Consumer Behavior & Service Reference Books: • C. Bhatacharjee • Lovelock

Wher e Doe s the Cu sto me r Fi t i n a Servi ce Or ga niza ti on ? • Con su me rs rarel y in volve in manu fa cture of good s bu t of ten pa rtic ipate in se rvi ce cre ati on and de li ver y • Ch all en ge for ser vic e markete rs is to unde rst and how cu st ome rs int er act w it h ser vic e op er ati on s

– Pe ople pro cess ing ( e.g., Ho tel sta y): custo mer is phy sica ll y involv ed thr ougho ut enti re pr oce ss – Po ssess ion pro cessing (e .g ., DVD repa ir): inv olvement ma y be limited to dro p off of phy sical it em/ desc ripti on of pr obl em and su bsequ ent pic k u p – Men ta l stimu lu s pr ocess ing (e. g., wea ther fo re cas t): inv olvement is ment al, no t phy sic al; her e custo mer simply rec ei ves outpu t and acts on i t – In for ma ti on pr oces si ng (e. g., hea lth insu ranc e): inv olvement is menta l - spec ify in for ma ti on upfr ont and la ter rec ei ve do cumenta ti on of covera ge

High -Con ta ct Ser vices

and

Low-C onta ct

Hig h C onta ct Ser vices • Custo mers visit se rvice througho ut servic e deliv er y • Ac ti ve conta ct per son nel

betwee n

fa cilit y custo mer s

and

rema in

and

ser vic e

• Inc lude s mo st peo pl e- pro cessin g ser vic es Lo w Co nta ct Ser vice s • Li ttl e o r no physi cal c ontac t wit h se rvice perso nnel • Conta ct usu all y at arm’ s leng th thr oug h el ec tr oni c or phy sic al distr ibutio n ch annel s • New tec hno lo gi es (e. g. Web) lev el s

help redu ce conta ct

Levels of Customer Contact with Service Organizations

Hi gh

Empha sizes enc ounte rs wi th serv ice perso nn el

Nursing Home HairCut 4-Star Hotel

Management Consulting

Good Restaurant

Telephone Banking

Airline Travel (Econ.) Retail Banking

Car Repair

Motel

Insurance

Dry Cleaning Fast Food

Mov ie Th eat er Cable TV

Su bway • Inter net Bank ing

Mai l B ased Rep airs

Empha sizes enc ounters wi th equ ipment

Internet-based Serv ices

Low

The consumer’s mind is like a ‘Black Box’

BUY

EXTERNAL STIMULUS

A.COMPANY CONTROLLED • Service offer • Price • Promotion • Dist..outlets B. SOCIAL FORCES • WOM • Reference Groups

Response

Consumer’s mind

NO BUY

Three Buying situations of consumer- Howard & Sheth •

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

Roles in Service-Buying Behavior •

Initiator/Influencer

•

Information gatherer

•

Gatekeepers

•

The devil’s advocate

•

Decider

•

Buyer/purchaser

•

User

Need Arousal Recognition of Need Choice of level of involvement Search for info. / identifying of alternatives

Decision Making Process

Evaluation of alternative

Decision to buy/not buy Purchase action and other decisions Post purchase behavior

SOCIAL/GROUP FORCES

INDIVIDUAL/PSYCHOLOGICAL FORCES •Perception •Motivation •Learning •Attitude •Personality

•Family •Culture/Sub-culture •Reference group •Social class

DECISION-MAKING PROCESS INFORMATION SOURCE B.

Service offer, price, advertising, outlets

B. SOCIAL•

Reference Group

•

WOM

•Need Arousal Need. •Choice of level of involvement •Search for info. / identifying of alternatives •Evaluation of alternative •Purchase decision •Post-purchase behavior

Influence on Service Consumer Behavior

SITUATIONS •

When

•

Where

•

What

•

why

Managing Service Encounters-1 Se rvi ce En cou nte r: A per iod dur ing which cust omer s di rect ly w ith a ser vice

of time int er act

Mo me nt s of Trut h: Defi ni ng poi nt s in ser vi ce deli ve ry whe re cu st ome rs int er act with emp loy ees or eq ui pme nt Critic al Inci de nt s: spe cific enco unt ers that res ult in es peci ally sat isfy ing /d issat isfy ing ou tco me s fo r ei the r c usto mer s or s er vi ce e mpl oy ees

Managing Service Encounters--2 • Se rvi ce succes s oft en rest s on pe rfor mance of juni or contact pe rso nne l • Must tr ai n, co ach , role mod el des ir ed be havi or • Th oug htl ess or badly beh aved cust om er s can cause pr oble ms fo r ser vi ce pe rso nne l (and other cus to me rs) • Must educat e cust om er s, clari fy what is ex pe ct ed, mana ge b eh avi or.

In services, the last experience remains uppermost in your mind. Therefore, it is not enough to be good, you have to be consistently good

The Purchase Process for Services

Service Marketing- Module II

Faculty: J.Rai

14

The Purchase Process for Services • Pre- pu rc has e S ta ge Awa re nes s o f need In for ma ti on sea rc h Ev aluatio n o f a ltern ativ e ser vic e su pplier s • Serv ice Enc ounter Sta ge Requ est servic e fr om c ho sen su pplier Se rv ice del ivery • Post -pu rcha se Sta ge Ev aluatio n o f serv ice per for ma nc e Fu tu re i ntenti ons

• Awar enes s of ne ed . • Info rmat ion and s ear ch q ua lit ies • Evaluat ion of ser vi ce alt ern at iv es – Pr obl ems o f c ompa ri ng serv ice o ffers. – Custo mers a s c ompetit io n fo r s er vice del ivery . – Ro le of mo od, emo tio ns and per sonal infl uenc es . – Ro le o f brandin g.

• Se rv ice enc oun ter • Post pu rch ase evaluat ion by cu sto mer s.

Per cei ved Ri sks in Pur ch asi ng and Usi ng Ser vi ces Fu nc ti ona l – unsa ti sf ac tory perfo rma nce outc omes Fina ncial – mone ta ry lo ss, unexpec ted extr a c osts Tempo ral – was ted time , dela ys lead to pr oblems Phy sic al – per sona l inju ry, da ma ge to po ss essi on s Psy cho logi cal – fea rs and neg ati ve emo ti ons So cial – how othe rs ma y thin k a nd rea ct Senso ry – unwa nted impa cts to any of fi ve senses

Components of Customer Expectations Desir ed Ser vic e Lev el: The type of serv ice custo mer s ho pe to rec ei ve in terms of desir ed ser vic e. It’ s a “wished- fo r” level of ser vice qu alit y tha t custo mer bel iev es can and sh oul d be deliv er ed Adequ ate Ser vic e Lev el : It is a mi nimum accepta ble lev el of ser vic e tha t the custo mer wi ll expec t wi tho ut bei ng dissa ti sfied. Pr edi cted Serv ice Lev el : ser vice leve l tha t custo mer anti cipa tes / bel iev es fi rm wi ll actually del iver Zo ne of To lera nc e: ra ng e wi thi n whi ch custo mer s are will in g to accept vari ati ons in ser vic e deliv er y

Factors that Influence Customer Expectations of Services Perso nal Nee ds De si re d Se rv ic e Bel iefs abo ut Wha t Is Possib le

Expli cit & Im plic it Servi ce P ro mise s Wo rd -of-Mo uth Pa st E xperien ce

ZON E OF TOLE RANCE

Perceiv ed Serv ice Ade qua te Se rv ice Si tu atio na l Fac to rs

Pr edicted Serv ice

Intangible Attributes, Variability, and Quality Control Problems Make Services Hard to Evaluate

Se ar ch attribute s – Tan gi ble ch ar acte rist ics that allo w cus to me rs to evaluat e a pr oduct be for e pur chas e Ex per ie nce at tribut es – Char acte rist ics that can be ex per ience d when actually usi ng the se rvi ce Crede nce attribute s – Char act er isti cs that ar e di ffi cult to evaluat e co nfi dent ly ev en aft er con sump ti on Go od s te nd to be hi gher in se ar ch at tr ibut es, ser vi ces tend to be hi gher in ex pe ri ence and cr ed ence at tribut es Crede nce at tribut es fo rce cus to me rs to tru st that desi red be nefi ts have be en de liver ed

How Product Attributes Affect Ease of Evaluation

High in sear chHigh in attr ibutes ex per attien ribute ce s

Comp le x surg er y

Leg al ser vi ce s

Comp ut er r epair Ed uca tio n

Enter tai nm ent

Haircut

Mos t S er vi ces

Lawn f ertiliz er

Restaur ant mea ls

Food s

Motor vehi cle

Clo thi ng

Eas y to evalu ate

Ch air

Mo st Goods

Dif ficu lt to eva lu ate

High in creden ce att ribut es So ur ce: Ada pted fr om Ze ith aml

Cus to me r Sat isfact ion is Ce nt ral to the Mar ket ing C once pt • Satis fact io n de fine d as att it ude -like jud gm ent follo wing a se rvice purch as e or se ries of se rvice inte ract ions • Cus tomer s have exp ec tat ions prior to consump ti on, obser ve ser vice per formance, comp are it to exp ec tat ions • Satis fact io n judgment s ar e base d on this comp aris on – Posi tive disconfi rma tio n if bett er th an exp ect ed – Confirmat ion if same as exp ect ed – Neg ative disconfi rm at io n if wors e th an exp ect ed • Satis fact io n reflec ts per ceive d serv ice qua lity , price/ qua lity tr adeo ffs, per sonal and si tuat ional factor s

Custo mer De li ght : Go ing Bey ond Sa ti sfa ct ion • Research shows that delight is a function of 3 components – Unexpectedly high levels of performance – Arousal (e.g., surprise, excitement) – Positive affect (e.g., pleasure, 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 Se rv ice O per ati on s (fr on t sta ge a nd ba cksta ge) Where inp uts are pr ocess ed and ser vice elements crea ted. In cludes fa cilities, equ ip me nt, a nd perso nnel

Se rv ice D eliv er y (fr on t sta ge) • Where “fina l assembly” of ser vic e elements ta kes pla ce a nd s erv ice is del iver ed to c usto mers • Inc ludes custo mer int era cti ons wi th oper atio ns and o the r c usto mer s Se rv ice Ma rketin g (fr ont sta ge) In cludes servic e deliv er y and all ot her betw een serv ice fir m a nd c usto mer s

con ta cts

Service Marketing System: (1) High Contact Service--e.g., Hotel Se rvi ce Mar ket ing Sy st em Ser vic e Deliv ery Sy stemOther C on ta ct Po ints Ser vic e Oper atio ns S ystem

Oth er Custo mers Inte rio r & E xterio r Faciliti es

Tec hni cal Co re

Equ ip men t

The Cus tomer

Servi ce P eople

Ba cksta ge Fro nt S ta ge (inv isible ) (visible)

Oth er Cus to mers

Ad vertising Sales Calls Mark et Rese arch Su rveys Billing / Sta te ments Miscellane ous Ma il, Ph one Ca lls , Faxe s, etc . Rand om E xposu re t o Facilit ie s / Ve hicl es Cha nce E nco unte rs with Se rv ic e P erso nn el Word o f Mout h

Service Marketing System: (2) Low Contact Service--e.g., Credit Card

Se rv ice Ma rket in g Syst em Service D eli ver y Syst em

Othe r C onta ct P oi nts

Servic e Opera ti ons Syste m Adv erti sin g Mail

Tec hni cal Cor e

Back stage (in vis ib le)

The Self S ervice Equip men t Cust omer Phon e, Faxsit , e Web et c. Fron t Stage (vis ib le)

Market Resear ch Sur veys Ran dom E xpo sur es Facili ties, Per son nel Wor d of Mou th

Family Life Cycle • • • • • • •

Bachelor Newly Married Full Nest I Full Nest II Full Nest III Empty Nest I Empty Nest II