module 2

MBA@GIT http://www.mba.git.edu.

© Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. [email protected].



Services Marketing

Module 2( According to VTU syllabus MBA

Services Marketing 12 MBA MM314)



Objectives

After studying this module you will be able to1. Analyze the consumer behavior in services marketing.2. Understand customer expectations in services.3. Know the customer perceptions of services.4. Assess the importance of service encounters.5. Discuss the service quality dimensions.



Consumer Evaluation Processes for Services

Search Qualities– attributes a consumer can determine prior to

purchase of a productExperience Qualities– attributes a consumer can determine after

purchase (or during consumption) of a productCredence Qualities– characteristics that may be impossible to evaluate

even after purchase and consumption



Continuum of Evaluation for Different Types of ProductsCl

o thi

n g

Jew

elry

Furn

iture

Hou

ses

Auto

mob

iles

Rest

aura

nt m

eals

Vaca

tions

Hai

rcut

s

Child

car

e

Tele

visi

on re

pair

Lega

l ser

vice

s

Root

can

als

Auto

repa

ir

Med

ical

dia

gnos

is

Difficult to evaluateEasy to evaluate

{High in search

qualitiesHigh in experience

qualitiesHigh in credence

qualities

{{Most

GoodsMost

Services



Categories in Consumer Decision-Making and Evaluation of Services

Information Search Evaluation of Alternatives

Purchase and Consumption

Post-Purchase Evaluation

Use of personal sources Perceived risk

Evoked set Emotion and mood

Service provision as drama Service roles and scripts Compatibility of customers

Attribution of dissatisfaction Innovation diffusion Brand loyalty



Categories in Consumer Decision-Making and Evaluation of Services

Information Search Evaluation of Alternatives

Purchase and Consumption

Post-Purchase Evaluation

Use of personal sources Perceived risk

Evoked set Emotion and mood

Service provision as drama Service roles and scripts Compatibility of customers

Attribution of dissatisfaction Innovation diffusion Brand loyalty

Culture Values and attitudes Manners and customs Material culture Aesthetics Educational and social

institutions



Information searchIn buying services consumers rely more on

personal sources. WHY? Personal influence becomes pivotal as

product complexity increasesWord of mouth important in delivery of

servicesWith service most evaluation follows

purchase



Perceived RiskMore risk would appear to be involved with

purchase of services (no guarantees)Many services so specialised and difficult to

evaluate (How do you know whether the plumber has done a good job?)

Therefore a firm needs to develop strategies to reduce this risk, e.g, training of employees, standardisation of offerings



Evoked SetThe evoked set of alternatives likely to be smaller

with services than goodsIf you would go to a shopping centre you may only

find one dry cleaner or “single brand”It is also difficult to obtain adequate prepurchase

information about serviceThe Internet may widen this potentialConsumer may choose to do it themselves, e.g.

garden services



Emotion and MoodEmotion and mood are feeling states that

influence people’s perception and evaluation of their experiences

Moods are transientEmotions more intense, stable and

pervasiveMay have a negative or positive influence



Service Provision as DramaNeed to maintain a desirable impressionService “actors” need to perform certain

routinesPhysical setting important, smell, music, use

of space, temperature, cleanliness, etc.



Customer Perception definitionCustomers have different expectations re

services – or expected serviceDesired service – customer hopes to receiveAdequate service – the level of service the

customer may accept



Dual Customer Expectation Levels (Two levels of expectations)

Adequate Service

Desired Service

Zone ofTolerance



The Zone of Tolerance

Adequate Service

Desired Service

Zone ofTolerance



Zones of Tolerance VARY forDifferent Service Dimensions

Most Important Factors Least Important Factors

Level of

Expectation

Source: Berry, Parasuraman, and Zeithaml (1993)

Adequate Service

Desired Service

Zone ofTolerance

DesiredService

AdequateService

Zone of

Tolerance

Desired Service

Adequate Service



Zones of Tolerance VARY forFirst-Time and Recovery Service

First-Time Service

Outcome

Process

Outcome

Process

Recovery Service

ExpectationsLOW HIGH

Source: Parasuraman, Berry and Zeithaml (1991)



Factors that Influence Desired Service

DesiredService

AdequateService

Zone of

Tolerance

Enduring ServiceIntensifiers

Personal Needs



Personal needs include physical, social, psychological categories

Enduring service intensifiers are individual, stable factors that lead to heightened sensitivity to service

This can further divided into Derived Service Expectations and Personal service Philosophies



Factors that InfluenceAdequate Service

DesiredService

AdequateService

Zone of

ToleranceSelf-PerceivedService Role

Situational Factors

Perceived ServiceAlternatives

Transitory ServiceIntensifiers



Transitory service intensifiers – temporary – a computer breakdown will be less tolerated at financial year-ends

Perceived service alternativesPerceived service role of customerSituational factors



Factors that InfluenceDesired and Predicted Service

DesiredService

AdequateService

Zone of

Tolerance

Predicted Service

Explicit ServicePromises

Implicit ServicePromises

Word-of-Mouth

Past Experience



Customer Perceptions of Service Quality and Customer Satisfaction

ServiceQuality

Reliability

Responsiveness

Assurance

Empathy

Tangibles

ProductQuality

PricePersonalFactors

CustomerSatisfaction

SituationalFactors



Factors Influencing Customer Satisfaction

Product/service qualityProduct/service attributes or featuresConsumer EmotionsAttributions for product/service success or

failureEquity or fairness evaluations



Outcomes of Customer Satisfaction

Increased customer retentionPositive word-of-mouth communicationsIncreased revenues



Relationship between Customer Satisfaction and Loyalty in Competitive Industries

0%

20%

40%

60%

80%

100%

Verydissatisfied

Dissatisfied Neithersatisfied nordissatisfied

Satisfied Verysatisfied

Satisfaction measure

Lo

yalt

y (r

eten

tio

n)



Service Quality

The customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.

Process and outcome quality are both important.



The Five Dimensions of Service Quality

Ability to perform the promised service dependably and accurately. Knowledge and courtesy of employees and their ability to convey 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.

Tangibles

Reliability

Responsiveness

Assurance

Empathy



SERVQUAL ATTRIBUTES

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

Keeping customers informed as to when services will be performed

Prompt service to customers Willingness to help customers Readiness to respond to customers’

requests

RELIABILITY

RESPONSIVENESS

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

ASSURANCE

Giving customers individual attention Employees who deal with customers in a caring

fashion Having the customer’s best interest at heart Employees who understand the needs of their

customers Convenient business hours

EMPATHY

Modern equipment Visually appealing facilities Employees who have a neat,

professional appearance Visually appealing materials

associated with the service

TANGIBLES



The Service Encounter

is the “moment of truth”occurs any time the customer interacts with the firmcan potentially be critical in determining customer satisfaction and

loyaltytypes of encounters:

– remote encounters– phone encounters– face-to-face encounters

is an opportunity to:– build trust– reinforce quality– build brand identity– increase loyalty



Check-InCheck-In

Request Wake-Up CallRequest Wake-Up Call

CheckoutCheckout

Bellboy Takes to Room Bellboy Takes to Room

Restaurant MealRestaurant Meal

A Service Encounter Cascade for a Hotel Visit



Sales CallSales Call

Ordering SuppliesOrdering Supplies

BillingBilling

Delivery and Installation Delivery and Installation

ServicingServicing

A Service Encounter Cascade for an Industrial Purchase



Critical Service Encounters Research

GOAL - understanding actual events and behaviors that cause customer dis/satisfaction in service encounters

METHOD - Critical Incident TechniqueDATA - stories from customers and employeesOUTPUT - identification of themes underlying

satisfaction and dissatisfaction with service encounters



Common Themes in CriticalService Encounters Research

Recovery: Adaptability:

Spontaneity:Coping:

Employee Responseto Service Delivery

System Failure

Employee Responseto Customer Needs

and Requests

Employee Responseto Problem Customers

Unprompted andUnsolicited EmployeeActions and Attitudes



Recovery

Acknowledge problem

Explain causesApologizeCompensate/

upgradeLay out optionsTake responsibility

Ignore customerBlame customerLeave customer to

fend for him/herself

DowngradeAct as if nothing is

wrong

DO DON’T



Adaptability

Recognize the seriousness of the need

AcknowledgeAnticipateAttempt to accommodateExplain rules/policiesTake responsibilityExert effort to

accommodate

Promise, then fail to follow through

IgnoreShow unwillingness to tryEmbarrass the customerLaugh at the customerAvoid responsibility

DO DON’T



Spontaneity

Take timeBe attentiveAnticipate needsListenProvide information (even if

not asked)Treat customers fairlyShow empathyAcknowledge by name

Exhibit impatienceIgnoreYell/laugh/swearSteal from or cheat a

customerDiscriminateTreat impersonally

DO DON’T



Coping

ListenTry to accommodateExplainLet go of the

customer

Take customer’s dissatisfaction personally

Let customer’s dissatisfaction affect others

DO DON’T



Evidence of Service from theCustomer’s Point of View

People

Process PhysicalEvidence

Contact employees Customer him/herself Other customers Operational flow of

activities

Steps in process

Flexibility vs. standard

Technology vs. human Tangible

communication

Servicescape

Guarantees

Technology

module 2

Business

git http

gogte institute of technology

prasad kulkarni

purchase of services

level of service

delivery of services

services consumers

garden services