Services Marketing 2 - Consumer behavior in services

8/12/2019 Services Marketing 2 - Consumer behavior in services

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Services MarketingCONSUMER BEHAVIOR IN

SERVICESUnit 2


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Who is a Consumer ?

Any individual who purchases goods andservices from the market for his/her end-use is called a consumer.

In simpler words a consumer is one whoconsumes goods and services available inthe market.


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What is consumer Interest ?

Every customer shows inclination towardsparticular products and services. Consumerinterest is nothing but willingness ofconsumers to purchase products andservices as per their taste, need and ofcourse pocket.


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The way in which an animal or person behaves in

response to a particular situation or stimulus

Behaviour


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What is Consumer Behaviour ?

Consumer Behaviour is a branch whichdeals with the various stages a consumergoes through before purchasing products orservices for his end use.


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Why do you think an individualbuys a product ?

Need Social Status

Gifting Purpose The main catalyst which triggers the buying

decision of an individual is need for a

particular product/service.


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Why do you think an individualdoes not buy a product ?

No requirement Income/Budget/Financial constraints

Taste


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When do you think consumerspurchase products ?

Festive season Birthday/ Anniversary/ Marriage

Other occasions Consumers purchase products and services as

and when need arises.


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Factors which influence buyingdecision of a consumer

Psychological Social

Economic, etc


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Why study consumer behaviour?

Explains as to: Why and why not a consumer buys a

product? When a consumer buys a product? How a consumer buys a product?

In a laymans language consumer behaviourdeals with the buying behaviour ofindividuals.


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Consumers evaluation process forservices

Search Qualities

attributes a customer can determine prior to purchase of a product

Experience Qualities

attributes a customer can determine after purchase (or during

consumption) of a product

Credence Qualities

characteristics that may be impossible to evaluate even afterpurchase and consumption


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Continuum of Evaluation forDifferent Types of Products


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Decision making process

Attribution ofdissatisfaction

Innovationdiffusion

Brand loyalty

Emotion & mood Service provision as

drama Service roles and

scripts Compatibility of

Evoked set Use of personalsources

Perceived risk

Informationsearch

Evaluation ofalternatives

Post purchaseevaluation

Purchase andconsumption


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Information search

Use of personal sourcesMass communication can convey messages about

search qualities but little about experience

qualities.

Asking friends or experts allows for obtaining

information that is more trusted.Non-personal sources may not be available

Can discover few attributes before purchase


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Perceived riskIntangible

Nonstandard

Usually come without any guarantees or warranty

Information search


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Evaluation of alternatives

Evoked setThat group of products a consumer considers

acceptable options in a given product category


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Service purchase and consumption

Emotion and mood Service provision as drama

Service personnel- actors

Customers- audience

Physical evidence- setting

Process- performance Service roles and scripts The compatibility of service customers


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Post purchase evaluation

Attribution of dissatisfaction Innovation diffusion

Relative advantage

Compatibility

Communicability

Divisibility

Complexity Brand loyalty


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Role of culture in services

Culture-The arts, customs, ideas, etc, of a nation,

people, or group.

Cultural factors affect theEvaluation

Purchase

Use of services


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Elements of culture

Language (both verbal and non verbal)

Values and attitudes

Manners and customs

Material culture

AestheticsEducation and social institutions


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Values and attitudes

Values and attitudes help to determine what members

of a culture think is right, important, and/ or desirable

Manners and customs

Manners and customs represent a cultures views of

appropriate ways of behaving

Elements of culture


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Material culture

What people own and how they use and display

material possessions varies around the worldAesthetics

Aesthetics refers to cultural ideas about beauty and

good taste.

These are reflected in music, art, drama, and dance, as

the appreciation of color and form

Elements of culture


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Education and social institutions

Both kinds of culture are affected by, and are

transmission agents of culture.Education includes the process of transmitting skills

and knowledge

Culture manifests itself most dramatically in the

people-to-people contact of our social institution

Elements of culture


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Service Quality Management


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Service Quality

Degree of excellence in service performance Consumers perceive the quality of a service by

experiencing the consumption process and bycomparing the experience with their expectations.

Service delivery- Customers are co producers-

participation effects service quality= but firms

cannot blame customers


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Quality is one of the most influencing factorsin a consumers purchase decision process

Quality is related to Costs Profitability Customer satisfaction

Customer relation Behavioral intention Positive word of mouth

Service Quality


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Servicescape

Servicescape is a part of physical evidence The environment in which the service is

assembled and in which the seller and

customer interact, combined with tangible

commodities that facilitate performance or

communication of the service


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Determinants of service quality

According to Alfrecht and Zemke: Care and concern - How devoted employees

and operational systems of a service are insolving the problems of customers

Spontaneity - How employees demonstrate

willingness and readiness to serve.


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According to Alfrecht and Zemke: Problem solving - The expertise and skill of

contact employees in performing services. Recovery - The special efforts of a service

provider in handling a situation when

something goes wrong or something

unexpected happens.



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According to Parasuruman, Zeithaml and Berry Reliability - involves consistency of performance

and dependability

Responsiveness - concerns the willingness orreadiness of employees to provide service

Competence - means possession of the required

skills and knowledge Access - involves approachability and ease of

contact



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According to Parasuruman, Zeithaml and Berry Courtesy - involves politeness, respect, consideration and

friendliness of contact personnel Communication - means keeping customers informed in a

language they can understand, and listening to them Credibility - involves trustworthiness, believability, honesty

and having the customers best interest at heart.



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According to Parasuruman, Zeithaml and Berry Security - is freedom from danger, risk or doubt. Understanding/ knowing the customer - involves

making the effort to understand the customers

needs.

Tangibles - includes physical evidence of theservice.



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New quality determinantsAlso known as the SERVQUAL scales

Tangibles Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service

Reliability Providing service as promised Dependability in handling customers service problems Performing services right the first time Providing services at the promised time Maintaining error-free records


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Also known as the SERVQUAL scalesResponsiveness Keeping customers informed as to when services will be

performed Prompt service to customers Willingness to help customers Readiness to respond to customers requests

Assurance Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer

questions

New quality determinants


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Also known as the SERVQUAL scalesEmpathy Giving customers individual attention Employees who deal with customers in a caring fashion Having the customers best interest at heart Employees who understand the needs of their customers Convenient business hours

New quality determinants


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MODELS OF SERVICE QUALITY

Service Quality Model of Gronroos GAPS model of Service quality


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Service Quality Model of Grnroos Firms need to understand how services are evaluated by

customers in terms of quality


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Technical quality- what is offered to the customersfrom the organization and what customers receive

in their interactions with the service firm is called

the technical product Technical quality of blueprinting and its execution Technical quality moulds the first impression of the

customers


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Functional quality- customers are also influencedby how they receive the service and how they

experience the service process in which they also

played a part The way service processes are handled in a service

encounter is called functional quality


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Image- customers will evaluate a firm by taking

into consideration its resources, history and ways

of operating service activities

Customers use a firms image as a filter or a net whileperceiving quality

Total perceived quality- Expected quality= perceived / experienced

quality-> satisfied

Th G M d l f S i Q li


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Demonstrate that the most critical service quality gap to

close is the

The Gaps Model of Service Quality

CUSTOMER GAP

difference between

Customer expectations

reason

PROVIDER GAPS

factors responsible

Perceptions

The Knowledge Gap

The Service Design & Standards Gap

The Communication Gap

The Service Performance Gap



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Customer Gap: Difference between customer expectations and

perceptions

Provider Gap 1 ( The Knowledge Gap ): Not knowing what customers expect

Provider Gap 2 ( The Service Design & Standards

Gap ): Not having the right service designs and standards




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Provider Gap 3 ( The Service Performance Gap ): Not delivering to service standards

Provider Gap 4 ( The Communication Gap ): Not matching performance to promises


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The Customer Gap

Expectedservice

Perceivedservice

Customer Gap


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Key Factors Leading to the CustomerGap

CustomerExpectations

Customer

Perceptions

CustomerGap

Provider Gap 1: Not knowing what customers expect Provider Gap 2: Not selecting the right service designs andstandards Provider Gap 3: Not delivering to service standards Provider Gap 4: Not matching performance to promises

Key Factors Leading to Provider Gap 1


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Customer Expectations

Company Perceptions ofCustomer Expectations

Inadequate marketing research orientation Insufficient marketing research

Research not focused on service qualityInadequate use of market research

Lack of upward communicationLack of interaction between management and customers

Insufficient communication between contact employees and managersToo many layers between contact personnel and top management

Insufficient relationship focus Lack of market segmentationFocus on transactions rather than relationshipsFocus on new customers rather than relationship customers

Inadequate service recoveryLack of encouragement to listen to customer complaintsFailure to make amends when things go wrongNo appropriate recovery mechanisms in place for service failures


Gap1


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Customer-Driven ServiceDesigns and Standards

Management Perceptions ofCustomer Expectations

Poor service designUnsystematic new service development processVague, undefined service designsFailure to connect service design to service positioning

Absence of customer-driven standardsLack of customer-driven service standardsAbsence of formal process for setting service quality goals

Inappropriate physical evidence and servicescapeFailure to develop tangibles in line with customer

expectationsServicescape design that does not meet customer andemployee needs

Inadequate maintenance and updating of the servicescape


Gap2

K F L di P id G 3


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Service Delivery

Customer-Driven ServiceDesigns and Standards

Deficiencies in human resource policiesIneffective recruitmentRole ambiguity and role conflictInappropriate evaluation and compensation systemsLack of empowerment, perceived control, andteamwork

Customers who do not fulfill rolesCustomers who lack knowledge of their roles andresponsibilitiesCustomers who negatively impact each other

Problems with service intermediariesChannel conflict over objectives and performanceDifficulty controlling quality and consistencyTension between empowerment and control

Failure to match supply and demandFailure to smooth peaks and valleys of demand


Gap3



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Service Delivery

Lack of integrated services marketing communicationsTendency to view each external communication as independentAbsence of strong internal marketing program

Ineffective management of customer expectationsAbsence of customer expectation management through all forms of

communicationLack of adequate education for customers Overpromising

Overpromising in advertisingOverpromising in personal sellingOverpromising through physical evidence cues

Inadequate horizontal communicationsInsufficient communication between sales and operationsInsufficient communication between advertising and operationsDifferences in policies and procedures across branches or units

External Communications

to Customers


Gap

4


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Services Marketing 2 - Consumer behavior in services

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