Consumer Behaviour in Services

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 forDifferent Types of Products/services Clothing Jewelry Furniture Houses Automobiles Restaurant meals Vacations Haircuts Child care Television repair Legal services Root canals Auto repair Medical diagnosis Most Services Most Goods { { { 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. Zone of Tolerance Adequate Service ZONES OF TOLERANCE FOR DIFFERENTSERVICE DIMENSIONS Desired Service Desired Service Zone of Tolerance Adequate Service Tangibles Reliability

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 CriticalService 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. 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 EFFECTIVESERVICE 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 Lost Customer Research Future Expectations Research Determine the reasons why customers defect Forecast future expectations of customers; develop and test new service ideas