08 consumer behavior in services

8/2/2019 08 Consumer Behavior in Services

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LECTURE 08

CONSUMER BEHAVIOUR IN SEVICES

CONCEPT

Consumer Behaviour refers to the behavior that consumers display in searching for,purchasing, using, evaluating and disposing of products and services that they expect

will satisfy their needs. Study of CB is the study of how individuals make decisions to

spend their available resources like time, money and effort on consumption related

items.

- Schiffman & Kanuck Process and physical activity individuals engage in when evaluating, acquiring, using or

disposing of goods and services- Laudon Dellabita

Actions of consumers in the market place and the underlying motives for those actions- Ostrow & Smith

Study of Consumer Behaviour- Study of what they buy, why they buy, when they buy, where they buy, how often

they buy it and how often they use it

- Covers processes by which consumers recognize their consumption problem, searchfor information, evaluate alternatives available in the market, make a decision and

choose a product, use and dispose the product for satisfaction and delight.

SEARCH, EXPERIENCE AND CREDENCE PROPERTIES

Search Qualitieso Attributes that a consumer can determine before purchasing a producto Include colour, style, price, fit, feel, hardness and smell

Experience Qualitieso Attributes that can be discerned only after purchase or during consumptiono Include taste and wearability

Credence Qualitieso Characteristics that the consumer may find difficult to evaluate even after

purchase and consumption

Continuum of Evaluation for Different Types of products


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STAGES IN CONSUMER DECISION MAKING AND EVALUATION OF SERVICES

1. NEED RECOGNITIONo Recognition that a need or want exists (need arousal)o

Governed by buying motives: -o Inherent and Learned

Inherent Arise from the basic needs of the customers like hunger, comfort,

safety, etc.

Influence the customer maximum If unsatisfied Tension Strong and urgent

Learned Learns from society/environment Like status, achievement, acceptance, fear etc.

CONSUMER

CHOICE

Need Recognition Information search

Evaluation ofAlternatives

Purchase

CONSUMEREXPERIENCE

POST

EXPERIENCE

EVALUATION


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Price is generally not a considerationo Internal and External

Internal That originate in the minds of the people and are both physical

and psychological in nature Can be rational or emotional

External Influenced by environment Income, occupation, religion, culture, family, social environment,

marketing activities, etc.

o Emotional and Rational Emotional

Affected by consumers feeling Heart dominates the mind Ego, prestige, pleasure, love & affection, status, ambition,

appetite, recreation, etc.

Rational Decision is based on logic and justifications, reasoning,

consideration of economic consequences

Before making any purchase, the consumer satisfies himself withthe price, quality, durability, reliability & service

2. INFORMATION SEARCHo Extensive and formalized when service is important to the customer or represents a

major investment

o Use personal (friends, family, relatives, experts, etc.) and non-personal(mass/selective media, websites, etc.) sources

o Way of reducing risk and helping customers feel more confident about theirpurchases

o Perceived Riskso Functionalunsatisfactory performance outcomeso Financialmonetary loss, unexpected extra costso Temporalwasted time, delays leading to problemso Physicalpersonal injury, damage to possessionso Psychologicalfears and negative emotionso Socialhow others may think and reacto Sensoryunwanted impact on any of five senses

o How customers handle perceived risk: -o Seeking information from respected personal sourceso Relying on a firm that has a good reputationo Looking for guarantees and warranties


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o Visiting service facilities or trying aspects of service before purchasingo Asking knowledgeable employees about competing serviceso Examining tangible cues or other physical evidenceo Using the Internet to compare service offerings and search for independent

reviews and ratingso Important for service firm to reduce perceived risk

o Offer performance warranties, guarantees to protect against fears of monetaryloss

o For products where customers worry about performance, sensory risks: - Offer previews, free trials (provides experience) Advertising (helps to visualize)

o For products where customers perceive physical or psychological risks: - Institute visible safety procedures Deliver automated messages about anticipated problems Websites offering FAQs and more detailed background Train staff members to be respectful and empathetic

3. EVALUATION OF ALTERNATIVESo Search attributes help customers evaluate a product before purchase

o Style, color, texture, taste, soundo Experience attributes cannot be evaluated before purchasemust experience

product to know it

o Vacations, sporting events, medical procedureso Credence attributes are product characteristics that customers find impossible to

evaluate confidently even after purchase and consumption

o Quality of repair and maintenance work4. SERVICE PURCHASE

o Transition of Purchase Intention into Purchase Decision5. CONSUMER EXPERIENCE

o Service as processes Services are performances that typically involve a sequence of steps, actions

and activities

These may involve customer interactions with the service provider, stepsperformed by customers themselves and/or interactions and performances

of third parties

o Service provision as drama the metaphor of a theatre Service dramas unfold on a stagesettings may change as performance

unfolds Many service dramas are tightly scripted, others improvised


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Front-stage personnel are like members of a cast Like actors, employees have roles, may wear special costumes, speak

required lines, behave in specific ways

Support comes from a backstage production team Customers are the audiencedepending on type of performance, may be

passive or active participants

o Service roles and scripts Service Roles

Roles are combinations of social cues that guide and direct behaviourin a given setting

Success of any service performance depends in part on how well therole is performed by the service actor and how well the team of

playersthe role set of both service employees and customers act

out their roles

Service employees need to perform their roles as per customerexpectations

Customers must be informed and educated about their roles (if theycooperate with the service provider in following the script, service

provision is likely)

Service Scripts The logical sequence of events expected by the customer, involving

him either as a participant or observer

Consist of sequences of actions associated with actors and objectsthat through repeated involvement define what the customer expects

o Compatibility of service customers Role of other customers in the service delivery Affects customer satisfaction particularly in case of high contact services

o Customer coproduction Specifically important in people processing and more specifically in metal-

stimulus services

o

Emotion and mood Shape evaluation of services

6. POST-EXPERIENCE EVALUATIONo Most important in predicting subsequent consumer behaviours and repurchaseo Impacts word-of-mouth communicationso Affected by customers attributions of dissatisfactiono Positive or negative biaso Brand loyalty

o Impacted by: - Cost of changing brands


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Availability of substitutes Social ties to the company Received risk associate with the purchase Satisfaction obtained in the past

08 consumer behavior in services

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