Consumer behavior and customer perceptions of services are influenced by many factors. Consumer behavior examines how external factors like culture, family and marketing activities influence a consumer's decision making process from need recognition through post-purchase evaluation. A customer's expectations are shaped by both explicit and implicit promises made by service providers as well as past experiences and word of mouth. Meeting and exceeding customer expectations is important for positive perceptions of service quality and satisfaction. Managing customer perceptions requires understanding how service encounters, physical evidence, price and image shape a customer's judgment of the overall service experience.

1. 1
Consumer Behaviour in services
&
Customer Perceptions of services
Module-2

2. 2
• Consumer behaviour is defined as the actions or
beliefs that guide a person to purchase and consume a
product or service.
• Consumer behaviour deals with:
-Factors that influence him/her
-Process he has to go through to evaluate product or
service prior to & even after its purchase & use.
• Main challenge for the service provider is to tangibles
the intangible services.

3. 3
Differences Between Characteristics of Goods
and Services
Search Qualities:color, style, price, fit…
(Qualities estimated before the purchase)
Experiences Qualities: taste & wearability
(Qualities that can be assessed after the use of products)
Credence qualities:
(Difficult to assess even after purchase and
consumption)

4. 4
Consumer Decision Making Process
Need Perception
Search for
Information
Evaluation of
alternatives
Purchase decision
Post-purchase
evaluation
Environmental
Factors
•Culture
•Subculture
•Social class
•Reference groups
•Family
Marketer
Activities
External sources
•Personal sources
•Commercial sources
•Public sources
•Experiential sources
Internal sources
Consumer Experience

5. 5
Understanding Customer Requirements
 Service provider needs to change according to the
change of customer’s needs and preferences.
 Service provider needs to perceive the view of the
customer about the services.
 Customer dissatisfaction occurs when there is a
difference between what the customer desired & what
the service provider delivers

6. 6
Customer Expectations
 Customer wants the fulfillment of words which were told by
the service provider.
 Customers do not expect that all their needs will be fulfilled
but atleast those promised by the company.
 Assurance : Knowledge & courteous-instill trust & confidence
 Empathy : Concern & individual attention
 Reliability : Accurate performance of duties
 Responsiveness : Willingness to provide assistance & prompt
service
 Tangible :

7. 7
Service Level Expectations
Adequate Desired
Low High
Zone of tolerance
Expectations

8. 8
Factors that Influence Customer Expectations of Service
Factors that influence customer expectations
of desired service
 Personal needs
 Derived service expectations
 Personal service philosophy

9. 9
Factors that Influence customers 'Adequate Service
 Transitory service intensifier: Car Service
 Perceived service alternative: Bank loans, small
airport in a city
 Customer self perceived role: Interior design
 Situational factors: Recent hurricanes Chennai
and floods in delhi
 Predicted service expectations: services during
vacations

10. 10
Factors that influence Desired & Predicted Expectations
 Explicit service promises : VLCC
 Implicit service promises
 Word-of-mouth publicity
 Past experience: Each stays at hotel.

11. 11
Factors that Influence Desired & Predicted Expectations
• Criteria to evaluate a service based on customer’s
service expectations
 Speed
 Certainty
 Ease
 Personal recognition

12. 12
Managing Customer Service Expectations
 Managing promises
 Reliability- ”Getting it right the first Time”
 Effective communication

13. 13
Exceeding Customer Service Expectations
To exceed customer expectations, companies
need to know the customer expectations.
The Process dimension of service gives service
providers an opportunity to exceed their
customer’s expectations and surprise them with
their competence, courtesy, and commitment.

14. Customer Perceptions
Perception is the process of making meaningful
picture by selectively organizing a set of stimuli.
Perception can be defined as a customer’s judgment
about the service experience and pertains to the
aspects of value of service delivery, service quality
and customer satisfaction.

15. 15
Factors that Influence Customer Perceptions
Service Evidence
• Service personnel Ex. Mc Donalds
• Physical environment
• Shaping the first impression of the customer. Ex. Tourist
Package
• Managing the trust of the customer. Kitchen in 5 Star hotels
• Facilitating quality service. Ex. Spectacles for Harry Potter.
• Providing a sensory stimulation to customers. Ex. Amusement
Park
• Changing the image of service organizations. Mc Donald’s
Image in India

16. 16
Factors that Influence Customer Perceptions
Contd..
• Image: The Image of service provider definitely
gives a clue of service quality to the customers.
• Price: Price also give the picture of quality of service
provided by service provider

17. Service Encounters
Remote encounter : ATM, Internet, Mails…
Phone encounter(Customer service, general enquiry
or order taking functions.
Face to face to encounter : Both verbal & non verbal
behaviors are important.
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18. Sources of pleasure & displeasure in
service Encounters
• Recovery: Employee response to service delivery
system failures
• Adaptability : Employee response to customer needs
& requests
• Spontaneity : Unprompted & unsolicited employee
Actions
• Coping : Employee response to problem customers
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19. Customer Satisfaction
• Satisfaction is the consumer’s fulfillment
response.
• It’s a judgment that a product or service
feature, or the product or service itself,
provides a pleasurable level of consumption-
related fulfillment.
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20. Determinants of Customer Satisfaction
• Product & service features(Focus Groups)
• Consumer Emotions.
• Attributions for service success or failure.
-Perceived causes of events
-Customer take atleast partial responsibility.
• Perceptions of Equity or Fairness
• Other Consumers, Family members, & Co-workers
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21. Service Quality
• Outcome, Interaction, & Physical Environment
quality.
• Service Quality Dimensions
 Assurance : Knowledge & courteous-instill trust & confidence
 Empathy : Concern & individual attention
 Reliability : Accurate performance of duties(Delivery of promises)
 Responsiveness : Willingness to provide assistance & prompt service
 Tangibles: Representing the service physically
 ::
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22. 22
Strategies for Influencing Customer Perceptions
Enhance customer satisfaction through services
Reflect evidence of service
Communicate and create a realistic image
Enhance customer perceptions of quality and value
through pricing

23. Ad Agencies & their clients
• Ogilvy & mathar Ltd: Pantaloons, TVS, HUL, Hero Honda etc
• MCS Communication Ltd: BAJAJ bikes, HDFC bank..
• Mc Cann Erickson India Ltd: CoCo cola, Nestle & Khaitan.
• Mudra Communications: MTNL, LIC, Dabur….
• Chaithra leo burnette ltd: ICICI, Toyota…
• Hindustan Thompson Associates: Apollo hospital, Pepsi foods,
ESPN, Madura Garments..
• Saatchi & Saatchi Pvt Ltd: Maruthi udyog, BPC, VISA, P&G..
• Triton Communication: Samsung, LG…
• Lintas India Ltd: ITC, J&J, United india assurance, BHEL,
ELF gas..
• Marketing Consultants & Agencies Ltd: KSDL, KSIC,
KSHDC…
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