The document discusses service quality and consumer behavior in services. It covers:
1) The three stages of consumer decision making in services - the pre-purchase, service encounter, and post-purchase stages. It examines factors like customer expectations, perceived risks, and satisfaction levels.
2) Key aspects of improving service quality like the five dimensions of service quality and reducing service gaps.
3) The importance of understanding consumer behavior to better manage customer touchpoints and deliver quality service.
SQ Lecture Two : Consumer Behaviour and Service Quality
1. 1
Service Quality
MKTG 1268
Lecture Two
• Consumer Behavior in a
Service Context
• Improving Service
Quality and Productivity
(brief overview only)
JAN 2013 Semester
GEOFFREY DA SILVA
2. TWO chapters to cover in this lecture
2
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
3. 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
5. Pre-purchase Stage - Overview
5
A
Pre-purchase Stage Customers seek solutions to aroused
needs
Evaluating a service may be
difficult
Uncertainty about outcomes
Increases perceived risk
Service Encounter Stage What risk reduction strategies can
service suppliers develop?
Understanding customers’ service
expectations
Components of customer
expectations
Post-purchase Stage Making a service purchase decision
7. Pre-purchase Stage – Need Awareness
7
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
8. Pre-purchase Stage – Information Search
8
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
11. Pre-purchase Stage – Evaluation of Alternatives
11
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
13. Pre-purchase Stage – Evaluation of Alternatives
13
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
15. Pre-purchase Stage – Evaluation of Alternatives
15
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
16. Pre-purchase Stage – Evaluation of Alternatives
16
Perceived Risks – Strategies for Firms to Manage Consume
Perceptions of Risk
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)
18. Pre-purchase Stage – Evaluation of Alternatives
18
Perceived Risks – Strategies for Firms to Manage Consume
Perceptions of Risk
•Display credentials
•Use evidence management (e.g., furnishing, equipment
etc.)
•Give customers online access to information about order
status
•Offer guarantees
19. Pre-purchase Stage – Evaluation of Alternatives
19
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
21. Pre-purchase Stage – Evaluation of Alternatives
Service Expectations – Factors Influencing Consumer
Expectations of Service (Fig. 2.14)
21
22. Pre-purchase Stage – Evaluation of Alternatives
Service Expectations – Components of Custom Expectations
Desired Service Level
• wished-for level of service quality that customer believes can and
should be delivered
Adequate Service Level
• minimum acceptable level of service
Predicted Service Level
• service level that customer believes firm will actually deliver
Zone of Tolerance
• Acceptable range of variations in service delivery
22
24. Pre-purchase Stage – Purchase Decision
24
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
25. Service Encounter Stage - Overview
25
Pre-purchase Stage
● Service encounters range from high-
to low-contact
B ● Understanding the servuction system
Service Encounter Stage
● Theater as a metaphor for service
delivery: An integrative perspective
Service facilities
Personnel
Post-purchase Stage
Role and script theories
25
27. 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
28. 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
29. Distinctions between High-contact
and Low-contact Services
29
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
32. Servuction System:
Service Production and Delivery
32
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
36. Importance of this Model:
36
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?
37. 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
37
38. Theatrical Metaphor: An Integrative Perspective
Good metaphor as service delivery is a series of events that customers
experience as a performance
Service facilities Personnel
• Stage on which drama • Front stage personnel are
unfolds like members of a cast
• This may change from • Backstage personnel are
one act to another support production team
Roles Scripts
• Like actors, employees • Specifies the sequences
have roles to play and of behavior for customers
behave in specific ways and employees
38
44. Customer Satisfaction Is Central to the
Marketing Concept
44
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
45. Customer Delight: Going Beyond Satisfaction
45
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
46. 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
46
47. 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
47
48. Sample Practice Exam Question:
48
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)
49. 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
49
51. 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.
51
52. The Five Dimensions of Service Quality
52
Tangibles: Appearance of physical elements
Reliability: Dependable and accurate performance
Responsiveness: Promptness; helpfulness
Assurance: Competence, courtesy, credibility, security
Empathy: Easy access, good communication,
understanding of customer
52
54. The GAP Model ― A Conceptual Tool to Identify and Correct Service
Quality Problems - Six Service Quality Gaps (Fig. 14.3)
54
55. Summary of the 6 Service Quality Gaps
55
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.
56. 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)
56
58. 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)
58