This document discusses consumer behavior in services. It covers several key topics: 1. It outlines the three stages of consumer decision making in services - the prepurchase, service encounter, and post-encounter stages. It describes the factors that influence expectations at each stage. 2. It introduces the concept of a "servuction system" which models a service business as an integrated system involving marketing, operations, and customers. It describes the key components of the servuction system. 3. It discusses the differences between high-contact and low-contact services and how they interact with customers at different points in the servuction system like service operations, delivery, and other contact points.

1. Consumer Behavior in Services

2. Overview
• 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
• Diff generations of consumers have
personalities shaped by events, history and
people drive their needs for different types of
services .

3. Search, experience and credence
properties
Search Qualities
• attributes a consumer can determine prior to purchase of a
product. Eg color, price, fit, feel Eg jewelry, cars clothing
Experience Qualities
• attributes a consumer can determine after purchase (or
during consumption) of a product eg taste wear ability Eg
vacations and restaurant meals
Credence Qualities
• characteristics that may be impossible to evaluate even
after purchase and consumption Eg surgeries

4. Continuum of Evaluation for Different
Types of Products
Difficult to evaluateEasy to evaluate
High in search
qualities
High in experience
qualities
High in credence
qualities
Most
Goods
Most
Services

5. Perceived risks in purchasing and using
services
• Perceived risk is relevant for services – that are
diff to evaluate before purchase and consumption
• First time users – more uncertain
• Eg functional risks: unsatisfactory performance
outcome, financial risk: monetary costs, temporal
risk : wastage of time, consequence of delays,
physical risk : personal injury and damage to
possessions, psychological risk : personal fear and
emotions,social risk and sensory risk

6. How do customers handle perceived
risks?
• Seek info from personal/family sources (family,
friends, peers)
• Rely on firm that has good reputation
• Guarantees and warrantees
• Visit service facilities or trying aspect of services
before purchasing
• Ask knowledgeable employees about competing
services
• Examine tangible cues or physical evidence
• Use internet for competitor service offerings and to
search for independent review and ratings

7. Risk reduction strategies developed by
suppliers
• Offer performance warrantees
• Money back guarantee
• Prospective customers can preview service through
brochures/web/tv
• Encourage prospects to visit service facilities
• Institute visible safety procedures
• Train staff to be respectful and empathetic in their dealings
with customers
• Provide toll free no/website
• Deliver messages to cell phone (delayed flights by airlines)
• Giving customers online tracker to track order status

8. Strategic responses to manage risk
• Services high in experience/credence attributes- lot of intangible
elements are involved
• Thus variability of inputs/outputs leads to QC issues
• Thus present a special challenge to marketers regarding reassuring
customers and reducing risks
• Eg products high in experience attributes- generate free trials for
prospective customers
• Advt also used to stimulate consumer interest. Eg credit card use
• Providers of services with high credence attributes often display their
credentials to reassure of quality service Eg Doctors, architects
• Evaluation of such services may be also affected by customers interaction
with physical environment
• Smart providers also engage in evidence management- an organized
approach to present coherent evidence- employees
dress, behaviour,furnishings,equipment and facilities

9. Understanding Customers service
expectations
• Customers evaluate service quality by comparing what is expected
with what they receive from supplier
• If expectations are met/exceeded, customers believe that they
have received high quality service. If price/quality relationship is
acceptable and other situational factors are positive- customers
likely to make repeat purchases and remain loyal to that supplier
• Customers expectation of a good service varies from one business
to another. Pre experience also plays an imp part
• Expectations also vary depending upon positioning Eg no frills
airline service vs full service airline service.
• Service expectations change over time influenced by
advt, pricing, new tech, service innovations, social trends, increased
access to info through various media Eg Parents involvement in
medical care for child

10. Customer expectations
• Customer expectations are beliefs about service
delivery that serve as a standards or reference
points against which performance is judged.
• Because customers compare their perceptions of
performance with these reference points when
evaluating service quality, knowledge about
customer expectations is important
• Knowing what customers expect is the fist step in
assuring service quality

11. Possible Levels of Customer Expectations

12. Components of service expectations
• Desired service
• Adequate service
• Predicted service
• Zone of tolerance

13. Desired and adequate service levels
• Desired service: Type of service which customers hope
to receive
• ‘Wished for level”: - a combination of what customers
believe can and should be delivered in the context of
personal needs
• A blend of what customers believes “can be” and
“should be”
• Adequate Service : Minimum level of service which
customers will accept without being dissatisfied.
• Customers are realistic- they have threshold level of
expectations Eg fast food service restaurant vs an
expensive gourmet meal restaurant

14. Factors influencing Customers
expectation about service
Adequate Service
Desired Service
Zone of
Tolerance
Explicit and Implicit
service
promises, word of
mouth, past
experience
Predicted Service
Personal
needs
Beliefs abt what
is possible
Perceived
service
alterations
Situational
factors

15. Predicted service level
• The level of service which customers actually
anticipate receiving
• Directly affects how they define adequate
service at that level
• Customer prediction will be situation specific
• Eg long queues for tickets for amusement
park on a holiday

16. Zone of tolerance
• Diff for firms to achieve consistent delivery by all
employees in same company and even by same service
employee from one time of day to another.
• The extent to which customers are willing to accept
this variation is called as zone of tolerance
• Too low performance: frustration and dissatisfaction
amongst customers, exceeding: pleases and delights
customers
• Other words: The range of service within which
customers don’t pay explicit attention to service
performance. When service falls outside this range
customers either react positively/negatively

17. Zone of tolerance
• Size of ZOT will be large or small depending upon
factors such as competition, price, importance of
specific service attributes which can influence the
level of adequate service Eg waiting time at
checkout at grocery store 9 eg 2-3 m vs 15 mins)
• Diff customers possess diff zones of tolerance. Eg
customers who work/vs at home for repairing
• Also varies for service dimensions: less tolerant
for unreliable service than for service deficiencies

18. Consumer choice
• Need recognition: Begins with the recognition that a need or want
exists.
• Maslow's hierarchy to characterize needs.
• Physiological needs: Biological needs such as food, water and
sleep. Recognition of needs is fairly easy.
• Safety and security needs: incl shelter, protection and security.
Consumers seek to provide for their own and their loved ones
shelter, safety and security through many types of services. For eg
parents looking for child care, education etc
• Social needs: need for affection, friendship and acceptance Eg
internet services – social connections
• Ego needs: for prestige,success,accomplishment and self esteem
eg spa services, plastic surgery etc
• Self actualization needs: self fulfillment and enriching experiences.
Eg sky diving etc

19. FACTORS THAT INFLUENCE CUSTOMER
EXPECTATIONS OF SERVICE

20. Sources of desired service expectation
• Personal needs: Needs which are essential to
physical/psychological well being of customer are pivotal to
customers desire in service. Eg physical, social,functional
and psychological . Eg sports fan.
• Lasting service intensifiers: individual, stable factors which
lead the customer to a heightened sensitivity to service-
one most imp factors is “derived service expectation”-
occur when customer expectation is driven by another
person or group. Eg birthday party organized by mother for
her kid
• Personal service philosophy : the customers underlying
generic attitude about meaning of service and proper
conduct of service providers. Eg delivery within 30 mins

21. Sources of adequate service
expectation
Temporary service
intensifiers
• short term individual
factors that make
customer more aware
for service need.
• Eg personal emergency
situations- accidents
• Problems with initial
service also leads to
heightened
expectations eg auto
repair
Perceived service
alternatives
• Are other providers
from whom the
customer can obtain
service. Eg
salons, airlinbe
customer from a
smaller town
• Marketers should fully
understand the
complete set of options
that customers view as
perceived alternatives.
Eg small town
customers view rail as
an another option
Self perceived service
role
• Customer perceptions
of the degree to which
customers exert an
influence on the level of
service they receive
• Eg meal ordering in an
restaurant

22. Sources of adequate service
expectation
Situational factors
• Service performance
conditions that customers
view as beyond the
control of service provider.
• Eg natural disasters
Hurricane Sandy
Predicted service
• Level of service that
customers believe they
are likely to get
• Its an estimate or
calculation of service that
a customer will receive in
an individual transaction
rather than in an overall
relationship with a service
provider

23. Sources of both desired and predicted
service expectations
• Interested consumers- likely to seek or take in
information from various sources. Eg call a store, ask a
friend, track ads in newspapers. They may also receive
service info by watching TV, surf-thus search actively as
well as passively.
• Factors which influence both desired as well as
predicted service expectations are
1. Explicit service promises
2. Implicit service promises
3. Word of mouth communications
4. past experience

24. Factors which influence both desired
and predicted service expectations
Explicit service promise
•Are personal/non personal
statements about service
made by the organization to
the customers
• Personal- salespeople, service
personnel, non personal:
webpage, advt, brochures etc
• Completely within the control
of the service provider
• Sometimes companies
deliberately overpromise by
stating best estimates about
service delivery in the future
• Direct effect on service
expectation. Eg total solution,
24 hrs service
Implicit service promise
• are service related cues
other than explicit promises
that lead to inferences about
what the service should and
will be like
• Quality cues are dominated
by price and other tangible
components.
• Higher the price, more
impressive the tangibles, more
the customer will expect from
the service
Word of mouth communication
• personal/non personal
statements made by
customers other than the
organization
• Carry more weight – unbiased
• imp for services which are
difficult to purchase/evaluate

25. Factors which influence both desired
and predicted service expectations
Past experience
• Customers previous exposure to service that is
relevant to focal service. Eg hotel visits

26. THE THREE STAGE MODEL OF
SERVICE CONSUMPTION
Customer Decision Making

27. Three stage model
1. Prepurchase stage
2. Service Encounter stage
3. Post encounter stage

28. The Pre Purchase stage
• Begins with the need arousal- the prospective customers
awareness of need and continues through information
search and evaluation of alternatives on whether to make a
service purchase
• Needs are unconscious and may concern with personal
identity and aspirations. Some needs may be overt Eg back
pain hunger etc.
• External sources – eg mktg activities may also stimulate
awareness of a need. Eg insurance cos using advt to urge
people to start about thinking about retirement plans- then
visit a website
• When people are aware of needs – more motivated to
resolve it- and search for alternatives

29. The service encounter stage
• Experience of purchasing and consuming a
service typically takes form of a series of
encounters
• A service encounter is a period of time during
which you as a customer interacts directly
with service provider
• Eg leisurely meals, taxi rides, one day at
amusement park etc

30. Service Encounters as “Moments of
Truth”
• Shows the importance of contact points with the
customers
• Eg bull fighting with bull and matador. The moment of
truth is the point where matador slays the bull.
• Importance of relationship mktg which states that to
prevent the mis encounter to potentially destroy what
is already or potential of becoming a long term
relationship
• Basic service challenge is defining and managing the
moments of truth the customer will encounter in that
particular industry

31. Service Encounters- high contact
services
• Using this service entails interactions through service delivery
between customers and the organization.
• The customers exposure to service provider takes a physical and
tangible nature.
• When customers visit the facility where service is being delivered ,
they enter a “service” factory. Eg hotel- is a lodging factory, hospital
is a health treatment factory.
• These industries focus on processing people – challenge is to make
experience appealing one for customers in terms of service
environment and their interaction with service personnel
• During course of service delivery customers are exposed to many
physical clues abt the org- interior/exterior of building, equipment
and furnishings, appearance and behavior of service personnel and
even other customers

32. Low contact services
• Involve little physical contact between customers
and providers.
• Instead the contact takes place through physical
distribution channels/electronically
• Many high contact services are being converted
to low contact services as customers undertake
more self service- conduct their
insurance/banking transactions by mail,
telephone,internet and do purchasing online

33. Levels of customer contact in service
organizations
High
Low
Emphasizes encounters
with service personnel
Emphasizes encounters
with equipment
Nursing
home
Haircut
Four star
hotel
Mgt
consulting
Telebanking
Car Repair
Drycleaning
Movie
theater Netbanking
Internet
based
services
Airline
travel
Insurance

34. SERVUCTION SYSTEM

35. Pierre Eiglier and Eric Langeard
• Conceptualized service business as a system
that integrated marketing, operations and
customers themselves
• Servuction system- is that part of service
organizations physical environment that is
visible to customers, contact personnel, other
customers and customer in person
• Comprises of Service operations , Service
delivery and other contact points

36. Service operations
• Where inputs are processed and elements of service product are created
• Visible components of service operations can be divided to those relating
to service personnel and to those relating to physical
facilities/tangibles/equipment
• Customers evaluate the product on those elements which they actually
experience during their encounter and perceived service outcome
• If back office fails to perform the task efficiently, the front office image
will suffer. For eg unavailability of any item on menu
• The proportion of overall service visible to customers varies according to
level of contact
• High contact services- physical customer- visible component has to be
higher
• Low contact services- minimize customer contact with service provider-
most of the service element is located remotely and front end- mail and
telecon

37. Service Delivery
• Where final assembly of elements takes place and product
is delivered to customers often in presence of other
customers
• Includes the visible elements of the service
(personnel, buildings, equipment) but also exposure to
other customers
• Customers of low contact services – normally never see
the factory- will talk to rep. Make judgments on ease of tel
access, followed by voice and responsiveness of tel based
customer service rep
• If service is delivered electronically such as self service
machines, IVR, web etc- firms compensate by adding
color, music, drama

38. Other contact points
• Includes all points of customer contact-
advt, billing,and market research
• Communication, participation news
stories, word of mouth etc

39. Service Marketing system for High and low
contact services
• The visible part of service operations ,service delivery
and other contact points – service marketing system
• Represents all diff ways customer may learn and
encounter about the organization in questions
• Service is experiential, each of these many elements
offers clues about the nature and quality of service
product
• Inconsistency amongst the various elements – weakens
the credibility in the customers eyes

40. Service Marketing system for High
contact services
TECHNICAL
CORE
THE
CUSTO
MER
ADVT
SALES CALLS
MKT RESEARCH SURVEYS
BILLING/STATEMENTS
MISC MAIL,PHONE,FAX
WEBSITES
RANDOME EXPOSURE TO
FACILITIES/VEHICLES
CHANCE ENCOUNTERS WITH
SERVICE PERSONNEL
WORD OF MOUTH
OTHER CONTACT POINTSSERVICE DELIVERY SYSTEM
SERVICE OPERATIONS SYSTEM
BACK STAGE
INVISIBLE
FRONT STAGE
VISIBLE
INTERIOR &
EXTERIOR
FACILITIES
EQUIPMENT
SERVICE
PEOPLE
OTHER
CUSTOMERS
OTHER
CUSTOMERS

41. Service Marketing system for LOW
contact services
TECHNICAL
CORE
MAIL
SELF SERVICE
EQUIPMENT
PHONE,FAX,W
EBSITE
THE
CUSTO
MER
ADVT
MKT RESEARCH SURVEYS
BILLING/STATEMENTS
RANDOME EXPOSURE TO
FACILITIES/VEHICLES
WORD OF MOUTH
OTHER CONTACT POINTS
SERVICE DELIVERY SYSTEMSERVICE
OPERATIONS
SYSTEM
BACK STAGE
INVISIBLE
FRONT STAGE
VISIBLE

42. Role and script theories
• Servuction model- static and describes a
single service encounter or moment of truth
• Service processes – series of encounters Eg
flight booking, travel, arrival, retrieving
luggage etc
• Knowledge of role and script theories- helps
us to understand, design, manage both
customer and employee behaviour in these
encounters

43. Roles
• A set of behavior patterns learned through experience and
communication, to be performed by an individual in a certain social
interaction in order to attain maximum effectiveness in goal
accomplishment
• As combination of social cues or expectations that guide behavior
in specific setting or context
• In service encounters both employees and customers have roles to
play
• The satisfaction or productivity depends on extent to which each
person acts out his/her prescribed role during a service encounter
• Employees must perform their roles wrt customer expectations or
else dissatisfy/lose customers
• Customers must also play by rules or risk problems to
firm/employees and other customers

44. Scripts
• Specifies the sequences of behaviour that employees and
customers are expected to learn and follow during service
delivery
• Employees receive formal training
• Customers learn scripts through experience, education and
communication. More experience- more familiarity with
the script
• Unwillingness to learn a new script may be a barrier to
switch to competition
• Any deviation- employee and customer dissatisfaction
• If co decides to change service script (technology),
customers and employees should be educated about the
new approach and benefits it provides

45. Scripts
• Some scripts are highly structured and allow
employees to move through their scripts quickly and
efficiently Eg flight attendants- helps to overcome two
challenges- variability reduction and ensuring uniform
quality. But frequent repetition – leads to mindless
service delivery without bothering about the customer
needs
• Scripts tend to be more flexible for providers of highly
customized services- designers, educators,stylists etc .
Some customers if they are new to service they may be
fearful of behaving incorrectly- org need to educate
them about their service delivery

46. Script for a dental exam
Patient
•1. Phone for appt
•3. Arrive at dental office
•6. Sit in waiting room
•8. Enter room, sit in chair
•10. Respond to questions
• 15. Rinse mouth
•20. Rise from chair
• 22. Leave room
•24. Pay bill
•27 . Leave dental office
Receptionist
•2. Confirms needs and sets
date
• 4. Greet patient, verify
purpose, direct to waiting
room, notify dentist of
arrival
• 23. Greet patient, confirm
treatment
received, present bill
•25. Give receipt
• 26.Thank patient and say
goodbye
Dentist
•5. Review note on patient
•7. Greet patient, direct to
treatment room
• 9. Get history and issues
•11. Place covers
•12. Lower chair, put
protective gear
•13. Inspect teeth, ask
question
•14. Complete cleaning
process
•16. Dispose protective
gear
•17. Complete notes write
Rx and return file to
receptionist
•18. Remove cover
• 19. offer advice on dental
care
•21. Thanks and goodbye

47. Service scripts for..
• Visit to a salon for a haircut
• Lecture delivery
• Flight travel
• Restaurant meal

48. Customer participation in service
delivery
• More work customer does as a co producer in
service delivery-greater info he requires to
perform the task correctly
• Advt for new services, brochures,websites all
provide info. Eg phone besides an ATM
• Customers look towards employees and other
asisstants for help and are frustrated if they cant
find it
• Some service providers give a realistic service
preview- video experience

49. The post encounter stage
• Customers have certain service standards in mind
before consumption (their expectations),observe
service performance, compare it to stds, and then form
satisfaction judgments based on this comparison
• Negative disconfirmation- if service is worse than
expected, positive disconfirmation- if it is better than
expected and simple confirmation if it is as expected
• If substantial positive disconfirmation, plus an element
of pleasure and surprise- customer is likely to be
delighted

50. Feedback during service delivery
• Service personnel can be trained to be more
observant so that they can identify customers
who appear having difficulties ,look frustrated
or ill at ease if they need assistance .
• If experience shows that customers are
perpetually discomforted by a particular
aspect of service encounter- indicates a need
for redesign and improvement