sq lecture two : consumer behaviour and service quality
TRANSCRIPT
Lecture Two
• Consumer Behavior in a
Service Context
• Improving Service
Quality and Productivity (brief overview only)
Service Quality MKTG 1268
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JAN 2013 Semester
GEOFFREY DA SILVA
TWO chapters to cover in this lecture
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Chapter Two is the main topic
But we should start to read some parts of Chapter Fourteen
Why?
Because our course is called Service Quality
And we need to understand the concept of service gaps
In order to have a framework to start our Group Project
However we will return to Chapter 14 at a later lecture
Chapter Two: Consumer Behavior in a Service
Context 3
Consumer Decision Making: The Three-Stage Model
Pre-purchase Stage
Service Encounter Stage
Post-purchase Stage
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Pre-purchase Stage: Overview
Pre-purchase Stage
Service Encounter Stage
Post-purchase Stage
Pre-purchase Stage - Overview
Customers seek solutions to aroused needs
Evaluating a service may be difficult
Uncertainty about outcomes Increases perceived risk
What risk reduction strategies can service suppliers develop?
Understanding customers’ service expectations
Components of customer expectations
Making a service purchase decision
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Pre-purchase Stage
Overview
• Need awareness
• Information search
• Evaluation of alternatives Multi-attribute model
Service attributes
Perceived risk
Service expectations
• Purchase decision
Pre-purchase Stage – Need Awareness
A service purchase is triggered by an underlying need (need arousal)
Needs may be due to:
People’s unconscious minds (e.g., aspirations)
Physical conditions (e.g., chronic back pain)
External sources (e.g., marketing activities)
When a need is recognized, people are likely take action to resolve it
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Pre-purchase Stage – Information Search
When a need is recognized, people will search for solutions.
Several alternatives may come to mind and these form the evoked set
Evoked set – set of possible services or brands that a customer may consider in the decision process
When there is an evoked set, the different alternatives need to be evaluated before a final choice is made
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Pre-purchase Stage : Evaluation of Alternatives
Multi-attribute Model
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Service Attributes
Pre-purchase Stage – Evaluation of Alternatives
Service Attributes
Search attributes help customers evaluate a product before purchase Style, color, texture, taste, sound
Experience attributes cannot be evaluated before purchase—must ―experience‖ product to know it Vacations, sporting events, medical procedures
Credence attributes are product characteristics that customers find impossible to evaluate confidently even after purchase and consumption Quality of repair and maintenance work
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Credence attributes
Pre-purchase Stage – Evaluation of Alternatives
Perceived Risks
Functional – unsatisfactory performance outcomes
Financial – monetary loss, unexpected extra costs
Temporal – wasted time, delays leading to problems
Physical – personal injury, damage to possessions
Psychological – fears and negative emotions
Social – how others may think and react
Sensory – unwanted impact on any of five senses
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Pre-purchase Stage – Evaluation of Alternatives
Perceived Risks - How Do Consumers Handle Them?
Seeking information from respected personal sources
Using Internet to compare service offerings and search for independent reviews and ratings
Relying on a firm that has a good reputation Looking for guarantees and warranties Visiting service facilities or trying aspects of service
before purchasing Asking knowledgeable employees about competing
services
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Pre-purchase Stage – Evaluation of Alternatives
Perceived Risks – Strategies for Firms to Manage Consume
Perceptions of Risk
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Preview service through brochures, websites, videos
Encourage visit to service facilities before purchase
Free trial (for services with high experience
attributes)
Advertise (helps to visualize)
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Advertising can be used to reduce
customer perceived risks
Pre-purchase Stage – Evaluation of Alternatives
Perceived Risks – Strategies for Firms to Manage Consume
Perceptions of Risk
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•Display credentials
•Use evidence management (e.g., furnishing, equipment
etc.)
•Give customers online access to information about order
status
•Offer guarantees
Pre-purchase Stage – Evaluation of Alternatives
Service Expectations
Customers evaluate service quality by comparing what they expect against what they perceive
Situational and personal factors also considered
Expectations of good service vary from one business to another, and differently positioned service providers in same industry
Expectations change over time
Example: Service Insights 2.1
Parents wish to participate in decisions relating to their children’s medical treatment for heart problems
Media coverage, education, Internet has made this possible
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Failing to meet customer expectations
Pre-purchase Stage – Evaluation of Alternatives
Service Expectations – Factors Influencing Consumer
Expectations of Service (Fig. 2.14)
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Pre-purchase Stage – Evaluation of Alternatives
Service Expectations – Components of Custom Expectations
• wished-for level of service quality that customer believes can and should be delivered
Desired Service Level
• minimum acceptable level of service
Adequate Service Level
• service level that customer believes firm will actually deliver
Predicted Service Level
• Acceptable range of variations in service delivery
Zone of Tolerance
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Advertising
creates high
levels of
customer
expectations
Pre-purchase Stage – Purchase Decision
When possible alternatives have been compared
and evaluated, the best option is selected
Can be quite simple if perceived risks are low and
alternatives are clear
Very often, trade-offs are involved. The more
complex the decision, the more trade-offs need to
be made
Price is often a key factor in the purchase decision
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Service Encounter Stage - Overview
Pre-purchase Stage
Service Encounter Stage
Post-purchase Stage
● Service encounters range from high-
to low-contact
● Understanding the servuction system
● Theater as a metaphor for service
delivery: An integrative perspective
Service facilities
Personnel
Role and script theories
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B
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Service Encounter Stage : Overview
Service Encounter Stage
Service encounter – a period of time during which a
customer interacts directly with the service provider
Might be brief or extend over a period of time (e.g., a phone
call or visit to the hospital)
Models and frameworks:
―Moments of Truth” – importance of managing touchpoints
High/low contact model – extent and nature of contact points
Servuction model – variations of interactions
Theater metaphor – “staging” service performances
Moments of Truth
“[W]e could say that the perceived quality is realized at the moment
of truth, when the service provider and the service customer
confront one another in the arena. At that moment they are very
much on their own… It is the skill, the motivation, and the tools
employed by the firm’s representative and the expectations and
behavior of the client which together will create the service delivery
process.”
Richard Normann
Distinctions between High-contact
and Low-contact Services
High-contact Services
Customers visit service facility and remain throughout service delivery
Active contact between customers and service personnel
Includes most people-processing services
Low-contact Services
Little or no physical contact with service personnel
Contact usually at arm’s length through electronic or physical distribution channels
New technologies (e.g. Web) help reduce contact levels
Medium-contact Services Lie in between These Two
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Service Encounters Range from
High-contact to Low-contact (Fig 2.19)
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The Servuction System (Fig 2.21)
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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 is delivered to customers
Includes customer interactions with operations and other customers
Other contact points
Includes customer contacts with other customers
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Backstage operations…
… but they are nevertheless important!
The service marketing system for a high-contact service
The service marketing system for a low-contact service
Importance of this Model:
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You must use this to study the nature of the companies that you have selected for your group project and..
Analyze the different elements of the front end and back end operations
Which are more critical? From the customer point of view? From the operations and economics (cost efficiency) perspective?
Which areas can cause potential lapses in service quality or create bottlenecks?
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Service Encounter Stage Theater as a Metaphor for Service Delivery
“All the world’s a stage and all the men and women merely players. They have their exits and their entrances and each man in his time plays many parts”
William Shakespeare
As You Like It
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Theatrical Metaphor: An Integrative Perspective
Good metaphor as service delivery is a series of events that customers experience 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 employees
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The service performance
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Scripts
Post-encounter Stage - Overview
Pre-purchase Stage
Service Encounter Stage
Post-purchase Stage
Evaluation of service performance
Future intentions
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C
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Post-purchase Stage : Overview
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Post-purchase Stage : Expectancy-disconfirmation Model
of Satisfaction (Fig. 2.26)
Customer Satisfaction Is Central to the
Marketing Concept
Satisfaction defined as attitude-like judgment following a service purchase or series of service interactions
Customers have expectations prior to consumption, observe service performance, compare it to expectations
Satisfaction judgments are based on this comparison Positive disconfirmation if better than expected
Confirmation if same as expected
Negative disconfirmation if worse than expected
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Customer Delight: Going Beyond Satisfaction
Research shows that delight is a function of 3 components
Unexpectedly high levels of performance
Arousal (e.g., surprise, excitement)
Positive affect (e.g., pleasure, joy, or happiness)
Once customers are delighted, their expectations are raised
If service levels return to previous levels, this may lead to dissatisfaction and it will be more difficult to ―delight‖ customers in future
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Summary of Chapter 2:
Customer Behavior in a Services Context (1)
Three-stage Model of service consumption helps us to understand and better manage customer behavior
Pre-purchase stage
Customers seek solutions to aroused needs
Evaluation alternatives is more difficult when a service involves experience and credence attributes
Customers face perceived a variety of perceived risks in selecting, purchasing and using services
Customers can use a variety of ways to reduce perceived risk and firms can also manage risk perceptions
Customer expectations of service range from ―desired‖ to ―adequate‖ with a zone of tolerance in between; if actual service is perceived as less than adequate, customers will be dissatisfied
A purchase decision has to be made
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Summary of Chapter 2:
Customer Behavior in a Services Context (2)
Service encounter stage
Service encounters range from high contact to low contact
Servuction system consists of two parts:
Service operations system
Service delivery system
Role and script theories help us understand, manage customer behavior during encounters
Theatrical view of service delivery offers insights for design, stage-managing performances, and relationships with customer ―audience‖
Post-purchase stage
In evaluating service performance, customers can have expectations positively disconfirmed, confirmed, or negatively disconfirmed
Unexpectedly high levels of performance, arousal and positive affect are likely to lead to delight
Sample Practice Exam Question:
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Explain each of the following:
Search, experience and credence
attributes (6 marks)
At least four out of the seven types of
perceived risks involved in the purchase
and/or use of services (4 marks)
Chapter 14 : Service Quality
We want you to read Chapter 14 ONLY from pages 432 to 437
Understand what are the DIMENSIONS of Service Quality
What is meant by the concept of SERVICE GAPS
And what marketers can do to reduce service gaps
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Service Quality and Productivity Strategies
• Quality and productivity are twin paths to creating value for both customers and companies
• Quality focuses on the benefits created for customers; productivity addresses financial costs incurred by firm – If service processes are more efficient and increase
productivity, this may not result in better quality experience for customers
– Getting service employees to work faster to increase productivity may sometimes be welcomed by customers, but at other times feel rushed and unwanted
• Marketing, operations and human resource managers need to
work together for quality and productivity improvement
Why you need to read this early…
• When you pick a service company and study its products and
services you will need to articulate what are the dimensions of
its service
• From here you will start to observe, measure and clarify what
you think are some of the gaps or areas for improvements’
• These will give you some tentative ideas as to what kinds of
recommended strategies you will propose as part of your
service marketing plan.
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The Five Dimensions of Service Quality
Responsiveness: Promptness; helpfulness
Tangibles: Appearance of physical elements
Reliability: Dependable and accurate performance
Assurance: Competence, courtesy, credibility, security
Empathy: Easy access, good communication,
understanding of customer
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The GAP Model ― A Conceptual Tool to Identify and Correct Service Quality Problems - Six Service Quality Gaps (Fig. 14.3)
Summary of the 6 Service Quality Gaps
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Gap 1, the Knowledge Gap relates to a lack of management understanding of
what customers expect.
Gap 2, the Standards Gap is a failure to translate managers’ perceptions of
customer expectations into the quality standards established for service delivery.
Gap 3, the Delivery Gap is the difference between specified delivery standards
and the firm’s actual performance.
Gap 4, the Communications Gap is the difference between what the company
communicates and what is actually delivered to the customer.
Gap 5, the Perceptions Gap is the difference between what the company has
actually delivered and what the customer perceives s/he has received (note this
perception may be wrong due to difficulty in evaluating the service).
Gap 6 (the overall gap) or the Service Gap is the difference between what the
customer perceives and his/her original expectations.
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The GAP Model ― A Conceptual Tool to Identify and Correct Service Quality Problems Suggestions for Closing the 6 Service Quality Gaps (1) (Table 14.2)
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The GAP Model ― A Conceptual Tool to Identify and Correct Service Quality Problems Suggestions for Closing the 6 Service Quality Gaps (2) (Table 14.2)
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The GAP Model ― A Conceptual Tool to Identify and Correct Service Quality Problems - Suggestions for Closing the 6 Service Quality Gaps (3) (Table 14.2)
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The GAP Model ― A Conceptual Tool to Identify and Correct Service Quality Problems Suggestions for Closing the 6 Service Quality Gaps (4) (Table 14.2)
Suggestions for Closing the
6 Service Quality Gaps (1) (Table 14.2)
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