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1 CONSUMER BEHAVIOR IN SERVICES At the end of this module the learning outcomes are –What are the various types of good and services –What are the difficulties.

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Presentation on theme: "1 CONSUMER BEHAVIOR IN SERVICES At the end of this module the learning outcomes are –What are the various types of good and services –What are the difficulties."— Presentation transcript:

1 1 CONSUMER BEHAVIOR IN SERVICES At the end of this module the learning outcomes are –What are the various types of good and services –What are the difficulties markers face in understanding consumer behavior in services –What are the steps to be followed in understanding consumer behavior

2 2 CONSUMER BEHAVIOR IN SERVICES Services Marketing by Zeithmal and Bitner Chapter 3

3 3 CONSUMER BEHAVIOR IN SERVICES Consumer Behavior What consumers buy? Where consumers buy? When consumers buy? How consumers buy? What consumers buy? We study these behaviors

4 4 CONSUMER BEHAVIOR IN SERVICES Consumers buying vegetables Most consumers Buy ‘fresh’ vegetables Roadside vendors Freshness concept In touch with air It might have been washed with dirty water Do consumers buy Safal frozen vegetables from Mother Diary? Very few buy. A feeling that is not ‘FRESH’

5 5 CONSUMER BEHAVIOR IN SERVICES COMPARED TO GOODS SERVICES ARE –More difficult to choose –More difficult to evaluate –Intangibility –Non-standardized –Production and consumption together

6 6 CONSUMER BEHAVIOR IN SERVICES BENEFITS – UNDERSTANDING CONSUMER BEHAVIOR Low chances of product failure Products acceptability higher Helps us to make right distribution strategies Right promotional strategies

7 7 CONSUMER BEHAVIOR IN SERVICES Three types of products Search qualities Experience qualities Credence qualities

8 8 CONSUMER BEHAVIOR IN SERVICES 1. SEARCH QUALITIES Consumers can evaluate before purchasing a product Color, style, feel, smell, taste Example Automobiles Can determine attributes before purchase Go for test drive Get the entire feel Similarly clothing, soaps, soap.

9 9 CONSUMER BEHAVIOR IN SERVICES 2. EXPERIENCE QUALITIES Consumers can evaluate after purchase or during consumption Difficult to evaluate than search qualities Example Vacations/Holiday package Stay at Delhi, want to visit Goa How do you evaluate? Visit Goa If satisfied, buy again

10 10 CONSUMER BEHAVIOR IN SERVICES 3. CREDENCE QUALITIES Very difficult to evaluate even after purchase and consumption Consumers do not have sufficient knowledge Examples : Surgery – Bypass Complicated Consumers have little knowledge Visits required after surgery Most difficult to Market Difficult for consumers to evaluate

11 11 CONSUMER BEHAVIOR IN SERVICES SERVICES Dominated by experience and credence qualities Consumers employ different evaluation processes

12 12 CONSUMER BEHAVIOR IN SERVICES Clothing Jewelry Furniture Houses Automobiles Restaurant meals Vacations Haircuts Child care Television repair Legal services Root canals Auto repair Medical diagnosis Difficult to evaluate Easy to evaluate { High in search qualities High in experience qualities High in credence qualities { { Most Goods Most Services

13 13 CONSUMER BEHAVIOR IN SERVICES Consumer decision making process Five steps Need recognition Information search Evaluation of alternatives Purchase Postpurchase evaluation

14 14 CONSUMER BEHAVIOR IN SERVICES 1.Information Search In services Rely more on personal resources Example Legal services Not advertised on the mass media How to choose a lawyer? Speak to friends, relatives Word of mouth, relatives

15 15 CONSUMER BEHAVIOR IN SERVICES 2. EVALUATION OF SERVICE ALTERNATIVES Lesser alternatives in services than goods For goods, you go to retail shops All brands are displayed Choose any one out of competing brands In services Fewer options Go to one bank at a time Very little display of simultaneous brands

16 16 CONSUMER BEHAVIOR IN SERVICES EMOTION AND MOOD Customer in “bad mood” Enters service establishment Service interpretation ‘NEGATIVE’ Customer in good “mood” Service interpretation ‘POSTIVE’ Behavior of other customers

17 17 CONSUMER BEHAVIOR IN SERVICES Example- AIR – INDIA Traveling from Delhi to London Fellow companion passenger Misbehaving Though Air India Service is good What do you feel Bad experience A feeling that Air-India cannot control misbehavior of passengers May decide not to travel again

18 18 CONSUMER BEHAVIOR IN SERVICES SERVICE PURCHASE Conformance to “script” important Script Logical sequence of events expected by the customer Example Meeting reputed cardiologist at Apollo hospital Patient enters the hospital Observes other patients are waiting Cardiologist comes Talks to you Examines you Gives you feedback

19 19 CONSUMER BEHAVIOR IN SERVICES Example If the above script happens you are comfortable But if. -no patients in hospital -Cardiologist sends his junior to examine you -Refuses to meet you due to lack of time You feel that service is not up to the expectations Don’t change the expected script

20 20 CONSUMER BEHAVIOR IN SERVICES CUSTOMER COMPATIBILITY When you are visiting hospital, airlines, restaurant or a bank How do you feel when there is overcrowding Misbehavior of neighboring customers Dissatisfied Compatibilty of customers is critical

21 21 CONSUMER BEHAVIOR IN SERVICES CUSTOMER COMPATIBILITY CRITICAL Singapore Airlines Seating plan Vegetarian customers Sit together Smokers sit together Customers with similar taste and preferences are made to sit together Affects customer satisfaction

22 22 CONSUMER BEHAVIOR IN SERVICES 4. POST-PURCHASE EVALUATION You go for haircut Not up to your expectations Reasons Poor skills of hairstylist Blame yourself for choosing wrong hairstylist Not communicating what you wanted Quality of services depends on customer feedback A doctor’s diagnosis depends on customer feedback

23 23 CONSUMER BEHAVIOR IN SERVICES A. Diffusion of innovation As services are intangible Sometimes impossible to test, taste before purchase Difficult to introduce innovations Example Blocked heart arteries Bypass surgery is the traditional diagnosis Now Stents Resist such innovations Not sure of the outcome Resist innovation Consumers adopt innovations in services more slowly than they adopt innovations in goods

24 24 CONSUMER BEHAVIOR IN SERVICES B. BRAND LOYALTY Brand switching is less frequent in services than goods When you change brands Risk, uncertainty Costs may be associated It is higher in services Example Changing your Family doctor If you choose a new cardiologist Insist on new tests New medical reports Switching cost are high. If perceived risks are high, consumers are unlikely to change brands.

25 25 CONSUMER BEHAVIOR IN SERVICES IMPLICATIONS FOR SERVICE MARKETERS StanChart Credit card division Convincing Citibank credit card customers to switch to Stanchart credit cards. How? Membership fees waived off Lower interest rate on outstanding/overdue payments Free saving bank account in StanChart Bank Stan Chart trying to making switching cost lower Marketers need to lower switching costs to shift brand loyalty

26 26 CONSUMER BEHAVIOR IN SERVICES VOICE MAIL Benefits –When you call somebody –If not available –Leave message in a data/voice box –Not dependent on others and reliable –Confidentiality maintained Criticism –Not sure whether received –Customers feel they are interacting with machine. Do not like this

27 27 CONSUMER BEHAVIOR IN SERVICES VOICE MAIL IN HOTELS Voice mail tested Ordered for guests Five star hotels Multicultural guests More acceptance Increasing use Why Complaint of foreign guests Receive distorted messages Fairly rapid acceptance

28 28 INTRODUCTION OF ATMs Introduced in 80s Customers resisted Didn’t want to interact with a machine Not sure of outcomes Banks trying to make ATM customer friendly One bank Introduced ATM Allowed customers to insert cards halfway Hold the other half of card by hand CONSUMER BEHAVIOR IN SERVICES

29 29 CONSUMER BEHAVIOR IN SERVICES INTRODUCTION OF ATMs Do transactions Customers became more friendly and comfortable to automation What else was done 1.Advertisement campaign.Celebrities using ATMs 2.Installed Mirrors at ATMs.Mood of the customers improve when they use the ATM Broken initial resistance Customers became comfortable with ATM Switched over to fully automated ATMs Successful launch of a product by studying consumer behavior

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