Explain how consumer judges the quality of service (Including price as indicator of quality) Solution It is more difficult for consumers to evaluate the quality of service than the quality of products. This is true because of certain distinctive characteristics of services; They are intangible, they are variable, they are perishable, and they are simultaneously produced and consumed. To overcome the fact that consumers are unable to compare competining services side-by-side as they do with competing pproducts, consumers rely on surrogate cues (i.e., extrinsic cues) to evaluate the service quality. It must be noted here that the service quality is a perception of the consumer and not described in absoolute terms like in the case of products. Perceived service value has been described as a trade-off between the perceived benefits (quality) of service and the perceived sacrifice - both monetary and non-monetary - necessary to acquire it. Consumers rely on price as an indicator of service quality. Consumers using a price / quality relationship are actually relying on a well-known (and, hence, more expensive) brand name as an indicator of quality without actually relying directly on price per se. Consumers also use price and brand to evaluate the prestige of the product but do not generally use these cues when they evaluate the service delivery and performance. Since, price is so often considered as an indicator of quality, consumers perceive a service to be of higher quality based on the pricing of the service. However, on other hand, when the consumers evaluate the service more critically, then they rely less on the price and brand as indicators of service quality..

1. Explain how consumer judges the quality of service (Including price as indicator of quality)
Solution
It is more difficult for consumers to evaluate the quality of service than the quality of products.
This is true because of certain distinctive characteristics of services; They are intangible, they are
variable, they are perishable, and they are simultaneously produced and consumed. To overcome
the fact that consumers are unable to compare competining services side-by-side as they do with
competing pproducts, consumers rely on surrogate cues (i.e., extrinsic cues) to evaluate the
service quality. It must be noted here that the service quality is a perception of the consumer and
not described in absoolute terms like in the case of products.
Perceived service value has been described as a trade-off between the perceived benefits
(quality) of service and the perceived sacrifice - both monetary and non-monetary - necessary to
acquire it. Consumers rely on price as an indicator of service quality. Consumers using a price /
quality relationship are actually relying on a well-known (and, hence, more expensive) brand
name as an indicator of quality without actually relying directly on price per se. Consumers also
use price and brand to evaluate the prestige of the product but do not generally use these cues
when they evaluate the service delivery and performance. Since, price is so often considered as
an indicator of quality, consumers perceive a service to be of higher quality based on the pricing
of the service. However, on other hand, when the consumers evaluate the service more critically,
then they rely less on the price and brand as indicators of service quality.