Chapter 2

Consumer Behaviour
in Services
Where Does the Customer Fit in a
Service Organization? (Fig. 2.1)

Consumers rarely involved in manufacture of goods but often
participate in service creation and delivery
Challenge for service marketers is to understand how customers
interact with service operations
Flowcharting clarifies how customer involvement in service
encounters varies with type of process - see Fig. 2-1:
People processing (e.g., motel stay): customer is physically involved throughout
entire process
Possession processing (e.g., DVD repair): involvement may be limited to drop off
of physical item/description of problem and subsequent pick up
Mental stimulus processing (e.g., weather forecast): involvement is mental, not
physical; here customer simply receives output and acts on it
Information processing (e.g., health insurance): involvement is mental - specify
information upfront and later receive documentation of coverage
Four Categories of Services Employing Different
Underlying Processes
People Processing
Possession Processing
Mental Stimulus
Processing
Information Processing
(directed at intangible assets)
e.g., airlines, hospitals,
haircutting, restaurants hotels,
fitness centers
e.g., freight, repair,
cleaning, landscaping,
retailing, recycling
e.g., broadcasting, consulting,
education, psychotherapy
e.g., accounting, banking,
insurance, legal, research
TANGIBLE
ACTS
INTANGIBLE
ACTS
DIRECTED AT PEOPLE DIRECTED AT POSSESSIONS
What is the
Nature of the
Service Act?
Who or What is the Direct Recipient of the Service?
Intangible Attributes, Variability, and Quality Control
Problems Make Services Hard to Evaluate

Search attributes Tangible characteristics that allow customers
to evaluate a product before purchase
Experience attributes Characteristics that can be experienced
when actually using the service
Credence attributes Characteristics that are difficult to evaluate
confidently even after consumption
Goods tend to be higher in search attributes, services tend to be
higher in experience and credence attributes
Credence attributes force customers to trust that desired
benefits have been delivered
How Product Attributes Affect
Ease of Evaluation) (Fig. 2.5)
Source: Adapted from Zeithaml
Most Goods
High in search
attributes
High in experience
attributes
High in credence
attributes
Difficult
to evaluate
Easy
to evaluate
Most Services
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The Purchase Process for Services
(Adapted from Fig. 2-3)

Prepurchase Stage
Awareness of need
Information search
Evaluation of alternative service suppliers
Service Encounter Stage
Request service from chosen supplier
Service delivery
Postpurchase Stage
Evaluation of service performance
Future intentions
Figure 2-2
Categories in Consumer
Decision-Making and Evaluation of Services
Information
Search
Use of personal sources
Perceived risk
Perceived Risks in
Purchasing and Using Services (Table 2.1)

Functional unsatisfactory performance outcomes
Financial monetary loss, unexpected extra costs
Temporal wasted time, delays lead to problems
Physical personal injury, damage to possessions
Psychological fears and negative emotions
Social how others may think and react
Sensory unwanted impacts to any of five senses

Figure 2-2
Categories in Consumer
Decision-Making and Evaluation of Services
Information
Search
Evaluation of
Alternatives
Use of personal sources
Perceived risk
Evoked set
Emotion and mood
Figure 2-2
Categories in Consumer
Decision-Making and Evaluation of Services
Information
Search
Evaluation of
Alternatives
Purchase and
Consumption
Post-Purchase
Evaluation
Use of personal sources
Perceived risk
Evoked set
Emotion and mood
Service provision as drama
Service roles and scripts
Compatibility of customers
Attribution of dissatisfaction
Innovation diffusion
Brand loyalty
Service as Theater

All the worlds 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

The Dramaturgy of Service Delivery

Service dramas unfold on a stage--settings may change as
performance unfolds
Many service dramas are tightly scripted, others improvised
Front-stage personnel are like members of a cast
Like actors, employees have roles, may wear special costumes,
speak required lines, behave in specific ways
Support comes from a backstage production team
Customers are the audiencedepending on type of performance,
may be passive or active
Role and Script Theories

Role: A set of behavior patterns learned through experience and
communication
Role congruence: In service encounters, employees and
customers must act out defined roles for good outcomes
Script: A sequence of behavior to be followed by employees and
customers during service delivery
Some scripts (e.g. teeth cleaning) are routinized, others
flexible
Technology change may require a revised script
Managers should reexamine existing scripts to find ways to
improve delivery, increase productivity, enhance experiences
High-Contact and Low-Contact Services

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 arms length through electronic or physical
distribution channels
New technologies (e.g. Web) help reduce contact levels
Levels of Customer Contact with
Service Organizations (Fig. 2.2)
Emphasizes encounters
with service personnel
Emphasizes encounters
with equipment
High
Low
M a n a g e m e n t C o n s u l t i n g
C a r R e p a i r
I n s u r a n c e
M o t e l
F a s t F o o d
N u r s i n g H o m e
A i r l i n e T r a v e l ( E c o n . )

C a b l e T V
T e l e p h o n e B a n k i n g
H a i r C u t
G o o d R e s t a u r a n t
4 - S t a r H o t e l

D r y C l e a n i n g
R e t a i l B a n k i n g
Mail Based Repairs
Internet-based
Services
Movie Theater
Internet Banking
Subway
Figure 2-2
Categories in Consumer
Decision-Making and Evaluation of Services
Information
Search
Evaluation of
Alternatives
Post-Purchase
Evaluation
Use of personal sources
Perceived risk
Evoked set
Emotion and mood
Attribution of dissatisfaction
Innovation diffusion
Brand loyalty
Figure 2-2
Categories in Consumer
Decision-Making and Evaluation of Services
Information
Search
Evaluation of
Alternatives
Purchase and
Consumption
Post-Purchase
Evaluation
Use of personal sources
Perceived risk
Evoked set
Emotion and mood
Service provision as drama
Service roles and scripts
Compatibility of customers
Attribution of dissatisfaction
Innovation diffusion
Brand loyalty
Culture
Values and attitudes
Manners and customs
Material culture
Aesthetics
Educational and social
institutions

Managing Service Encounters--1

Service encounter: A period of time during which customers
interact directly with a service
Moments of truth: Defining points in service delivery where
customers interact with employees or equipment
Critical incidents: specific encounters that result in especially
satisfying/dissatisfying outcomes for either customers or service
employees
Managing Service Encounters--2

Service success often rests on performance of junior contact
personnel
Must train, coach, role model desired behavior
Thoughtless or badly behaved customers can cause problems
for service personnel (and other customers)
Must educate customers, clarify what is expected, manage
behavior

Factors that Influence
Customer Expectations of Services (Fig. 2.4)
Predicted Service
Explicit & Implicit
Service Promises
Word-of-Mouth
Past Experience
Desired Service


ZONE
OF
TOLERANCE



Adequate Service
Personal Needs



Beliefs about
What Is Possible



Perceived Service
Alterations



Situational Factors
Source: Adapted from Zeithaml, Parasuraman & Berry
Components of Customer 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: range within which customers are willing to
accept variations in service delivery

Customer Satisfaction is Central to the
Marketing Concept
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
Satisfaction reflects perceived service quality, price/quality
tradeoffs, personal and situational factors
Research shows links between customer satisfaction and a firms
financial performance
Customer Delight:
Going Beyond Satisfaction

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)
Is it possible for customers to be delighted by very
mundane services?

Progressive Insurance has found ways to positively surprise
customers with customer-friendly innovations and
extraordinary customer service
A Service Business is a System Comprising Three
Overlapping Subsystems
Service Operations (front stage and backstage)
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
Service Marketing (front stage)
Includes service delivery (as above) and all other contacts
between service firm and customers
Service Marketing System:
(1) High Contact Service--e.g., Hotel (Fig. 2.7)
The
Customer
Technical
Core
Interior & Exterior
Facilities
Equipment
Service People
Other
Customers
Other
Customers
Advertising
Sales Calls
Market Research
Surveys
Billing / Statements
Miscellaneous Mail,
Phone Calls, Faxes, etc.
Random Exposure to
Facilities / Vehicles
Chance Encounters
with Service Personnel
Word of Mouth
Service Operations System
Backstage
(invisible)
Front Stage
(visible)
Service Delivery System
Other Contact Points
Service Marketing System
Service Marketing System:
(2) Low Contact Service--e.g., Credit
Card (Fig. 2.8)
Technical
Core
Mail
Self Service
Equipment
Phone, Fax,
Web site etc.
The
Customer
Service Operations System

Service Delivery System Other Contact Points
Backstage
(invisible)
Front Stage
(visible)
Advertising
Market Research
Surveys
Random Exposures
Facilities, Personnel
Word of Mouth
Service Marketing System
What is a service experience?
Sum of all encounters between a customer and a service
provider
While buying/using a service
Feelings about such encounters immediately after the event
and sometimes
Recollections about the event after a period of time
Moments of Truth
Jan Carlzon, CEO, Scandinavian Airlines

Servuction Model
Bateson
2 components on service providers end
Visible (People)
Invisible (inanimate environment)