The document summarizes key aspects of customer behavior in service marketing. It discusses how consumers seek, choose, purchase, experience, and evaluate services. It outlines the three stages of the consumer decision making process - pre-purchase, service encounter, and post-purchase stages. It also categorizes services into four types based on whether the service act is tangible or intangible and whether people or possessions are the direct recipient. Finally, it examines factors that influence customer expectations and satisfaction during the different stages.
Assessing service market potential - Classification of services – Expanded marketing mix – Service marketing – Environment and trends – Service market segmentation, targeting and positioning
Offering a unique service which was not not earlier offered into the market is called new service and the process of designing such new service is called New Service Development.
Assessing service market potential - Classification of services – Expanded marketing mix – Service marketing – Environment and trends – Service market segmentation, targeting and positioning
Offering a unique service which was not not earlier offered into the market is called new service and the process of designing such new service is called New Service Development.
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2. Understanding Customer Needs, Decision Making,
and Behavior in Service Encounters
Building the Service Model
Managing the Customer Interface
Implementing Profitable Service Strategies
3. How consumers seek, choose, purchase,
experience and evaluate services
Two most important influences- consumers
life stage and the generation in which he/she
was born
Consumer Decision Making: The Three-Stage
Buying cycle
– Pre-purchase Stage
– Service Encounter Stage
– Post-purchase Stage
4. Consumers are rarely involved in the manufacture of
goods but often participate in service creation and
delivery
Challenge for service marketers is to understand
how customers interact with service operations
Based on differences in nature of service act
(tangible/intangible) and who or what is direct
recipient of service (people/possessions), there are
four categories of services:
◦ People processing
◦ Possession processing
◦ Mental stimulus processing
◦ Information processing
5. People Processing
Possession processing
Mental stimulus processing
Information processing
6. Information processing
(services directed at
intangible assets):
Accounting
Banking
Nature of the Service Act People Possessions
Tangible Actions People processing
(services directed at
people’s bodies):
Barbers
Health care
Who or What Is the Direct Recipient of the Service?
Possession processing
(services directed at
physical possessions):
Refueling
Repair/ maintenance
Mental stimulus
processing
(services directed at
people’s minds):
Education
Advertising
Intangible Actions
7. Customer must be physically
enter the service system.
Health care
Beauty saloon
Barber
Restaurant/bars
8. People Processing
Customers must:
◦ Physically enter the service
factory
◦ Co-operate actively with the
service operation
Managers should think about
process and output from
customer’s perspective
◦ To identify benefits created
and non-financial costs:
Time, mental, physical effort
9. Customer ask to provide
tangible treatment
Repair/ maintenance
Refueling
Laundry
Gardening
10. Possession Processing
Customers are less physically
involved compared to people
processing services
Involvement is limited
Production and consumption
are separable
11. Directed at people’s mind or
anything that touches
people mind and influence
behavior
Education
News/information
Music concert
religion
12. Mental Stimulus Processing
Ethical standards required when
customers who depend on such
services can potentially be
manipulated by suppliers
Physical presence of recipients
not required
Core content of services is
information-based
Can be “inventoried”
16. The decision to buy and use a service is made
in the pre purchase stage.
17. Awareness of Need
Information Search
Evaluation of Alternatives
Service attributes, Perceived risk, Service expectations
Purchase
Decision
18. Seek solution to aroused needs
• 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
Awareness of Need
19. When a need is recognized, people will search for solutions.
Information may be collected from Internal sources or
External sources.
Internal sources include information retrieved by the
customer from his memory, related to his previous
experience of buying of services.
External sources include personal and nonpersonal sources.
Personal sources- Family, neighbor, Friends etc.
Nonpersonal sources- Advertising, Dealers, Television,
Newspapers, radio etc.
Clarifying between the 2 options
Information search
o
r
20. Service Attributes
The ‘Search’, ‘Experience’ and ‘Credence’ are some of
the factors which create difference between service
and goods.
Search attribute- Attributes which can be evaluated
before purchase are called Search attributes & it help
customers evaluate a product (Physical Goods) before
purchase like- style, color, texture, taste, sound are
feature.
Experience attribute- Consumer can determine or
evaluated only after the purchase—must “experience”
the service to know what they are getting. Like-
Holidays, sporting events, medical procedure.
Credence attribute- Attributes that customers find
impossible to evaluate confidently even after
purchase and consumption. Like- hygiene of a
kitchen in a restaurant, Quality of repair and
maintenance work
Evaluation of Alternatives
21. Goods / Services Characteristics
Goods High on Search Attributes
Services High on Experience & Credence
Attributes
22. Aditya Global Business
School(Marketing Team)
Perceived Risks
A perceived risk is the uncertainty faced by consumers when they
can’t asses the post purchase consequences before purchasing
the product & it is involved in all customer decision.
• Functional Risk – Risk faced by customer that product which
customer purchased may fail to function according to his
expectations or unsatisfactory performance outcomes.
• Financial Risk – Risk faced by consumers when he needs to pay
for the service like- monetary loss, unexpected extra costs
• Physical Risk – It involve the risk to the physical safety of the
customer by using the products/ services. personal injury etc.
• Psychological Risk – It is the risk of causing harm to one’s self
image by making a poor service. Like- fears and negative
emotions
• Social Risk – This is the risk of having to face social
embarrassment as a result of make a poor service choice.
• Time Risk- This is the risk that time spent to search and locate
a service prior to purchase may have been wasted, if service
does not confirm to the customer’s expectations.
23. Aditya Global Business
School(Marketing Team)
• 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
• Price is often a key factor in the purchase
decision
25. A service encounter is a period of time during
which you as a customer interact directly with
the service provider.
It begins with submitting an application,
requesting a reservation, or placing an order.
26. High Contact
Service
Customer’s exposure
takes on a physical and
tangible nature
Eg. Hotels, Restaurants,
Healthcare, public
transportation etc.
Low Contact
Service
Little, if any physical
contact between customer
and service provider
Ex. Telephone based
service delivery etc.
27. Evaluation of service performance
Future intentions
Customers evaluate service quality & their satisfaction/ Dissatisfaction
with the service experience. The outcome of this process will affect
their future intentions, such as whether or not to remain loyal to the
provider that deliver service.
28. Negative
disconfirmation-
Service worse than
expected
Positive
confirmation-
service better than
expected
Satisfaction: attitude like judgment following a purchase act
29. Customer evaluate service quality by comparing
what they expected with what they received.
If their expectations are met or exceeded, they
believe they have received high quality service
and customer is satisfied.
If the service experience does not meet
customers’ expectations, they may complain
about poor service quality, suffer in silence, or
switch providers in the futures.
30. After purchasing a service, the customer
evaluates it by comparing its performance with
his expectation.
A satisfied customer becomes brand loyal,
gives positive feedback to others about the
service.
Brand Switcher Brand LoyalPost- Purchase Evaluation
-ve +ve
31. Delight- The product’s performance is exceeds
the buyer’s expectations.
Satisfaction- The product’s performance
matches the buyer’s expectation.
Dissatisfaction- The product’s is performance
does not match the buyer’s expectation.
Cognitive Dissonance (Post- purchase Doubt)-
The buyer is unsure of the product performance
relative to his or her expectations.