1. Consumer Behavior in aServices ContextAditya Global Business School(MarketingTeam)

2. Overview of Chapter 2Consumer Decision Making: The Three-Stage Model Pre-purchase Stage Service Encounter Stage Post-purchase StageAditya Global Business School(MarketingTeam) 3. Pre-purchase StageAditya Global Business School(MarketingTeam) 4. Pre-purchase Stage - OverviewPre-purchase StageService EncounterStagePost-purchase Stage Customers seek solutions toaroused needs Evaluating a service may bedifficult Uncertainty about outcomesIncreases perceived risk What risk reduction strategiescan service suppliers develop? Understanding customersservice expectations Components of customerexpectations Making a service purchasedecisionAditya Global Business School(MarketingTeam) 5. Pre-purchase Stage Overview Need awareness Information search Evaluation of alternatives Service attributes Perceived risk Service expectations Purchase decisionAditya Global Business School(MarketingTeam) 6. Pre-purchase Stage NeedAwareness A service purchase is triggered by anunderlying need (need arousal) Needs may be due to: Peoples unconscious minds (e.g., aspirations) Physical conditions (e.g., chronic back pain) External sources (e.g., marketing activities) When a need is recognized, people arelikely take action to resolve itAditya Global Business School(MarketingTeam) 7. Pre-purchase Stage InformationSearch When a need is recognized, people willsearch for solutions. Several alternatives may come to mind andthese form the evoked set Evoked set set of possible services or brandsthat a customer may consider in the decisionprocess When there is an evoked set, the differentalternatives need to be evaluated before afinal choice is madeAditya Global Business School(MarketingTeam) 8. Pre-purchase Stage Evaluation ofAlternativesService Attributes Search attributes help customers evaluate aproduct before purchase Style, color, texture, taste, sound Experience attributes cannot be evaluatedbefore purchasemust experienceproduct to know it Vacations, sporting events, medical procedures Credence attributes are productcharacteristics that customers findimpossible to evaluate confidently evenafter purchase and consumptionAditya Global Business School(MarketingTeam) Quality of repair and maintenance work 9. Pre-purchase Stage Evaluation ofAlternativesPerceived Risks Functional unsatisfactory performanceoutcomes Financial monetary loss, unexpected extracosts Temporal wasted time, delays leading toproblems Physical personal injury, damage topossessions Psychological fears and negative emotions Social Aditya Global Business how School(others Marketingmay think and reactTeam) Sensory unwanted impact on any of five 10. Pre-purchase Stage Evaluation ofAlternativesPerceived Risks - How Do Consumers HandleThem? Seeking information from respected personalsources Using Internet to compare service offeringsand search for independent reviews andratings Relying on a firm that has a good reputation Looking for guarantees and warranties Visiting service facilities or trying aspects ofservice before purchasingAditya Global Business School(Marketing Asking Team)knowledgeable employees aboutcompeting services 11. Pre-purchase Stage Evaluation ofAlternativesPerceived Risks Strategies for Firms to Manage ConsumePerceptions of Risk Free trial (for services with high experienceattributes) Advertise (helps to visualize) Display credentials Use evidence management (e.g., furnishing,equipment etc.) Offer guarantees Encourage visit to service facilities Give customers online access to informationabout order statusAditya Global Business School(MarketingTeam) 12. Pre-purchase Stage Evaluation ofAlternativesService Expectations Customers evaluate service quality bycomparing what they expect against whatthey perceive Situational and personal factors also considered Expectations of good service vary from onebusiness to another, and differently positionedservice providers in same industry Expectations change over time Example: Service Perspectives 2. Parents wish to participate in decisions relating totheir childrens medical treatment for heartproblems Media coverage, education, Internet has madethis possibleAditya Global Business School(MarketingTeam) 13. Pre-purchase Stage Evaluation ofAlternativesService Expectations Components of Custom Expectations Desired Service Level: Wished-for level of service quality that customer believes can and should bedelivered Adequate Service Level: Minimum acceptable level of service Predicted Service Level: Service level that customer believes firm will actually deliver Zone of Tolerance: Range within which customers are willing to accept variations in servicedeliveryAditya Global Business School(MarketingTeam) 14. Pre-purchase Stage Purchase Decision When possible alternatives have beencompared and evaluated, the best option isselected Can be quite simple if perceived risks are lowand alternatives are clear Very often, trade-offs are involved. The morecomplex the decision, the more trade-offsneed to be made Price is often a key factor in the purchasedecision Aditya Global Business School(MarketingTeam) 15. Service Encounter StageAditya Global Business School(MarketingTeam) 16. Service Encounter Stage - OverviewPre-purchase StageService EncounterStagePost-purchase Stage Service encounters range fromhigh- to low-contact Understanding the servuctionsystem Theater as a metaphor forservice delivery: An integrativeperspective Service facilities Personnel Role and script theoriesAditya Global Business School(MarketingTeam) 17. Service Encounters Range fromHigh-contact to Low-contactAditya Global Business School(MarketingTeam) 18. Distinctions between High-contactand Low-contact Services High-contact ServicesCustomers visit service facility and remainthroughout service deliveryActive contact between customers and servicepersonnel Includes most people-processing services Low-contact Services Little or no physical contact with service personnel Contact usually at arms length through electronic orphysical distribution channelsNew technologies (e.g. Web) help reduce contactlevels Medium-contact Services Lie in between TheseTwoAditya Global Business School(MarketingTeam) 19. The Servuction SystemAditya Global Business School(MarketingTeam) 20. Servuction System:Service Production and Delivery Servuction System visible front stage and invisible backstage Service Operations (front stage and backstage) Technical core where inputs are processed and service elements created Includes facilities, equipment, and personnel Service Delivery (front stage) Where final assembly of service elements takes place and service isdelivered to customers Includes customer interactions with operations and other customers Other contact points Includes customer contacts with other customersAditya Global Business School(MarketingTeam) 21. Theatrical Metaphor:An Integrative Perspective Good metaphor as service delivery is a series of events that customersexperience as a performance Service facilities Stage on which drama unfolds This may change from one act to another Personnel Front stage personnel are like members of a cast Backstage personnel are support production team Roles Like actors, employees have roles to play and behave in specific ways Scripts Specifies the sequences of behavior for customers and employeesAditya Global Business School(MarketingTeam) 22. Post-purchase StageAditya Global Business School(MarketingTeam) 23. Post-encounter Stage - OverviewPre-purchase StageService EncounterStagePost-purchase Stage Evaluation of serviceperformance Future intentionsAditya Global Business School(MarketingTeam) 24. Customer Satisfaction with ServiceExperience Satisfaction defined as attitude-likejudgment following a service purchase orseries of service interactions Customers have expectations prior toconsumption, observe service performance,compare it to expectations Satisfaction judgments are based on thiscomparison Positive disconfirmation if better than expected Confirmation if same as expected Negative disconfirmation if worse thanexpected Aditya Global Business School(MarketingTeam) 25. Customer Delight: Research shows that delight is afunction of 3 components Unexpectedly high levels ofperformance Arousal (e.g., surprise,excitement) Positive affect (e.g., pleasure,joy, or happiness) Once customers are delighted, theirexpectations are raised If service levels return to previouslevels, this may lead todissatisfaction and it will be moredifficult Aditya Global Business School(MarketingTeam)to delight customers infuture