1. Consumer Behaviour in Services

2. CONSUMER PROBLEM TIME DEFICIENCY
REASONS: dual career couples, single parent families
IT LEADS TO: demand for different services

3. 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

4. Continuum of Evaluation for Different Types of Products/services
Restaurant meals
Television repair
Medical diagnosis
Automobiles
Legal services
Root canals
Clothing
Furniture
Vacations
Child care
Auto repair
Jewelry
Houses
Haircuts
Most
Goods
Most
Services { { {
High in search
qualities
High in experience
qualities
High in credence
qualities

5. SERVICES - DECISION MAKING PROCESS
Need awareness
Memory
Memory
Evaluation of service suppliers
Future Intentions
Request service
Service delivery

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

7. CUSTOMER EXPECTATION OF SERVICE
Customer expectations are the beliefs about service delivery that serve as standards or reference points against which performance is judged.

8. LEVELS OF EXPECTATION

9. DUAL CUSTOMER EXPECTATIONS
Desired Service
Adequate Service

10. THE ZONE OF TOLERANCE Desired Service Zone of Tolerance
Adequate Service

11. ZONES OF TOLERANCE FOR DIFFERENT SERVICE DIMENSIONS
Desired Service
Zone of
Tolerance
Desired Service
Zone of
Tolerance
Adequate Service
Adequate Service
Reliability
Tangibles

12. 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.

13. FACTORS THAT INFLUENCE ADEQUATE SERVICE
Temporary Service
Intensifiers
Desired Service
Perceived Service
Alternatives
Zone of
Tolerance
Self-Perceived
Service Role
Predicted
Service
Adequate Service
Situational
Factors

14. FACTORS THAT INFLUENCE DESIRED AND PREDICTED SERVICE
Explicit Service
Promises
Implicit Service
Promises
Word-of-Mouth
Desired Service
Zone of
Tolerance
Past Experience
Predicted
Service
Adequate Service

15. CUSTOMER PERCEPTION OF SERVICE
Customers perceive services in terms of quality of service & how satisfied they are overall with their experiences.

16. CUSTOMER PERCEPTIONS OF QUALITY AND CUSTOMER SATISFACTION

17. 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.

18. 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.

19. 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

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

21. 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.

22. 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

23. THE FIVE DIMENSIONS OF SERVICE QUALITY
Ability to perform the promised service dependably and accurately.
Knowledge and courtesy of employees and their ability to inspire trust and confidence.
Physical facilities, equipment, and appearance of personnel.
Caring, individualized attention the firm provides its customers.
Willingness to help customers and provide prompt service.
Reliability
Assurance
Tangibles
Empathy
Responsiveness

24. 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

25. 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:
unprompted and
unsolicited employee
actions and attitudes
employee response
to problem customers

26. Company Perceptions of Consumer Expectations
UNDERSTANDING CUSTOMER EXPECTATION AND PERCEPTION THROUGH MARKETING RESEARCH
CUSTOMER
Customer
Expected Service
(Customer Gap)
Perceived Service
GAP 1
COMPANY
Company Perceptions of Consumer Expectations
Company

27. 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

28. 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

29. 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

30. 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
“Relationship” Surveys
Post-Transaction Surveys
Customer Focus Groups
“Mystery Shopping” of Service Providers
Employee Surveys
Assess company’s service performance compared to competitors; identify service-improvement priorities; track service improvement over time
Obtain customer feedback while service experience is fresh; act on feedback quickly if negative patterns develop
Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas
Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service
Measure internal service quality; identify employee-perceived obstacles to improve service; track employee morale and attitudes
Determine the reasons why customers defect
Lost Customer Research
Future Expectations Research
Forecast future expectations of customers; develop and test new service ideas