Consumer Behaviour in Services

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CHAPTER 3

• Consumer Behaviour in Services

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Introduction

• This chapter focuses on the importance of two
  major concepts customer expectations and
  customer perceptions and how these terms affect
  the overall service experience.

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Objectives

• Differentiate between search, experience, and
  credence properties
• Identify the consumer choice process
• Identify the factors which influence consumer
  experience
• Understand the important of postexperience
  evaluation
• Understand the differences among consumers

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Search, Experience, and Credence Qualities

• Search qualities attributes that a consumer can
  determine before purchasing a product
• Ex Clothing, furniture, houses
• Experience qualities attributes that can be
  discerned only after purchase or during
  consumption
• Ex Vacation, restaurant meals, haircuts
• Credence qualities characteristics that the
  consumer may find impossible to evaluate even
  after purchase and consumption
• Ex Auto repair, legal services, medical diagnosis

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• Figure 3.4
• P.50

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Consumer Choice

• The following diagram depicts how customers
  choose and make decisions and the steps that lead
  to the purchase of a particular service.
• Figure 3.5
• P. 50

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Need Recognition

• The process of buying begins with the recognition
  of a need or want.
• The most widely known characterization of needs
  is the Maslows hierarchy which includes
  physical, safety, social, ego, self-actualization
  needs.

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Information Search

• Once a need has been recognized, a consumer will
  gather information with respect to the goods and
  services that may satisfy their need.
• The process of searching for information is
  dependent on the service itself.
• If the service is important to the consumer,
  seeking information may be extensive and
  formalized.
• Consumers use both personal and nonpersonal
  sources to gather information.
• When it comes to services, consumers seek and
  rely to a greater extent on personal sources
• Examples of personal sources include family
  members, friends
• Examples of nonpersonal sources include
  Internet, brochures, pamphlets

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Evaluation of Service Alternatives

• Alternatives are defined as a group of products
  or services that a consumer considers acceptable
  options.
• The evoked set of alternatives tends to be
  smaller with services.
• For nonprofessional services, consumers often
  entail the choice between performing the services
  for themselves or hiring someone to perform the
  service.

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Service Purchase

• One of the major differences between goods and
  services is that goods are fully produced prior
  to being purchased by the consumer. Therefore,
  the consumer can see and try the exact object
  they will buy.
• On the other hand, services are purchased and
  produced almost simultaneously.
• Due to this limitation, some service providers
  offer free or discounted trials in order to
  reduce risk in the final purchase decision.

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Issues to Consider in Examining Consumer
Experience

• Services as processes
• Service provision as drama
• Service roles and scripts
• The compatibility of service customers
• Customers co-production
• Emotion and mood

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Services as Processes

• Services involve a sequence of steps
• The combination of these steps is the basis of a
  consumers evaluation of the overall service
  experience
• Consider the steps involved in eating at a
  restaurant

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Service Provision as Drama

• The metaphor of a theatre is useful for analyzing
  service performance.
• The skill of the service actors in performing
  their routines the way they appear and their
  commitment to the show are all essential to
  service delivery.
• Service actors performances can be characterized
  as sincere or cynical.
• The physical setting or stage such as colour,
  brightness, smell, temperature, use of space,
  style and comfort, settings design, and
  cleanliness can affect the service delivery.

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Service Roles and Scripts

• Roles and scripts define what the customer should
  expect
• Roles is defined as a combination of social cues
  that guide and direct behaviour in a given
  setting
• Ex Role of a hostess at a restaurant
• Service employees need to perform their roles
  according to the expectations of the customer.
  If not, the customer may be frustrated and
  disappointed.
• A script is a logical sequence of events expected
  by the customer, involving them as either a
  participant or an observer
• Deviations from the service script lead to
  confusion and dissatisfaction

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The Compatibility of Service Customers

• Customers receiving the service at the same time
  can affect the overall service experience.
• The presence, behaviour, and similarity of other
  customers receiving services has a strong impact
  on the satisfaction and dissatisfaction of any
  given customer.
• Incompatibility can be caused by differences in
  beliefs, values, experiences, abilities to pay,
  appearance, age, and health.

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Customer Co-production

• Customers are perceived as partners in the
  co-creation of services.
• Ex Weight Watchers
• It is important for customers to understand their
  roles and be trained to facilitate motivation,
  ability, and role clarity to perform.
• A customers coproduction role is particularly
  revelant in self-service situations.
• Ex Check-in kiosk at an airport

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Emotion and Mood

• Moods are defined as transient feeling states
  that occur at specific times and in specific
  situations
• Emotions are characterized as more intense,
  stable, and pervasive
• Since services are experiences, moods and
  emotions are critical factors which shape the
  perceived effectiveness of a service encounter.
• Moods and emotions can amplify experiences,
  making them either more positive or more negative
  than they might seem in the absence of the moods
  and emotions.
• Moods and emotions can affect the way information
  about the service is absorbed and retrieved in
  the memory.
• It is essential for service providers to observe
  customers emotional responses and attempt to
  create places, processes, and interactions to
  enhance certain emotions.

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Postexperience Evaluation

• Following the service experience, customers form
  an evaluation that determines whether they will
  return or continue to patronize the service
  organization
• Postexperience evaluation can affect
• Word-of-mouth Communication
• Attribution of Dissatisfaction
• Positive or Negative Biases
• Brand Loyalty

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Word-of-Mouth Communication

• Since service consumers are strongly influenced
  by personal sources, understanding and
  controlling word-of-mouth communication becomes
  important for service providers.
• If the service experience was dissatisfactory, it
  is critical to have an effective service recovery
  strategy to curb negative word-of-mouth.

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Attribution of Dissatisfaction

• When consumers are dissatisfied with a service,
  they may attribute their dissatisfaction to the
  producers, retailers or themselves.
• Since consumers participate to a great extent in
  services, they may feel more responsible for
  their dissatisfaction.
• This differs from products since the consumers
  main form of participation is the act of purchase
  in which the producer is held responsible for
  poor product performance.

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Positive or Negative Biases

• Research suggests that people remember negative
  events more than positive ones and are more
  influenced by negative information than by
  positive information.
• Therefore, consumers are more inclined to
  remember a negative service experience rather
  than a positive service experience.
• Research also suggests that consumers tend to
  infer positive qualities for the firm and its
  employees if they have a good experience with one
  service employee.
• On the other hand, customers who have a negative
  experience with one employees are less likely to
  draw a negative inference about employees or the
  firm.

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Brand Loyalty

• Brand loyalty refers to the degree to which
  consumers are committed to a particular brand.
• The factors which influence brand loyalty are
• Switching cost
• Availability of substitutes
• Social ties to the company
• Perceived risk associated with the purchase
• Satisfaction obtained in the past
• Due to the high costs involved in switching
  services, the limited awareness of substitutes,
  and the higher risks associated with services,
  consumers are more likely to be loyal to services
  than goods.

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Understanding Differences among Consumers

• Global Differences The Role of Culture
• Cultures have different values, norms, and
  behaviours
• Research provides evidence that there are
  differences in how consumers perceive services
  across cultures
• People tend to view other cultures through the
  often cluttered lens of their own which is an
  important issue when it comes to understanding
  customer perceptions in a cultural context.
• Group Decision Making
• When groups make decisions about services
• perceived risk is enhanced
• reliance on word-of mouth is increased
• difficulty in comparing alternatives is increased
• a higher level of customer participation is
  present

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Summary

• Three different qualities exist when purchasing a
  good or service which are search, experience, and
  credence.
• Customers undergo six steps when making a
  purchase.
• Various factors which affect consumer experience
  include the processes of services, the roles and
  scripts involved in a service encounter, the
  compatibility of service customers, the
  importance of consumers as co-producers, and the
  impact of emotion and mood.
• The importance of postexperience evaluation which
  include word-of-mouth, attribution to
  dissatisfaction, positive or negative biases, and
  brand loyalty contribute to repurchases.
• Understanding the differences among consumers in
  order to provide satisfied service experiences.

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Self-Test