Understanding

Consumer Behaviour
In Service Marketing
Consumer Behaviour is the process and activities people engage in
when searching for, selecting, purchasing, using, evaluating and
disposing of products and services so as to satisfy their needs and
services - Belch and Belch
Goods are high on search attributes eg: goods can be seen, touched
and felt or evaluate their physical properties
In Services experience is needed before evaluating them. Customers
cannot be sure of attributes hence they need experience in service.
Credence attributes not sure even after experience – Virgin Olive Oil
Tangible attributes help in evaluation of goods and determine before
purchase Physical goods tend to emphasize search attributes Style,
colour, texture, taste, test drive, clothing, furniture, cars electronic
equipments are high in search attributes
Services are experience based which is different for different
consumers and is impossible to evaluate even after purchase and
consumption After the experience the consumer thinks that the
service has been delivered 
Holidays, live entertainment performances scuba diving A Trip on a ship
A Carribean experience, trekking.

Customer expectations are beliefs about service delivery that serve as

standards or reference points against which performance is judged.

Knowing what the customer expects is most critical step in delivering

good quality service
Evaluating customer expectations

• Types of expectation standards customers hold about services

• Factors that influence the formation of these expectations
• Role of these factors in changing expectations
• How does a service company meet/exceed customer expectations
Desired Service Expectations It is the level of service customer hopes to receive. They are
further classified into two types
1) Ideal Expectations: This is highest degree of service Customer wants to adjust their
expectations to. ‘Everyone says this airline is as good as Etihad I want to book a good flight for
my parents travel.’
2)Normative Expectations: At this level the customer has a pre-decided mindset that the
service should be beyond or at par with respect to a particular expected level. ‘This airline
being as expensive, it ought to offer excellent service.’
Adequate Service Expectations: It is the expectation which has the minimum threshold level
acceptable to the customer. This expectation could be much below the desired level by
customer ‘I expect this airlines to serve my parents sensitively.’ It is classified into two:
1) Experience based expectations: ‘Service of this airlines is generally very good, but during
vacation period it is slow.’
2) Minimum Tolerable expectations ‘I didn’t book my parents on this flight as I expect its
service not to be good because of its low prices’.
This the boundary line of lowest degree expectation of less standards of service since price is
low
The Zone of Tolerance
The zone of tolerance is usually defined as the range of customer perception of
a service between desired and minimum acceptable standards
It is the difference between desired service and the level of service considered
adequate. The larger that gap, the more likely the customer will be dissatisfied.
The range of expectations between desired and adequate service can be wide or narrow
- can change over time - can vary among individuals - may vary with the type of service

Services are heterogeneous so performance vary across providers and employees. The
service provider must understand the extent to which customers are willing to accept
the variation between the desired and adequate service.
If service drops below adequate service, the customers will be frustrated. If Service
performance is higher than the top level of expectation customers will be
pleased/delighted
Example waiting time at a shopping mall/departmental store Different customers pose
different zones of tolerance
 Consumer Perception
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 service 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
• PhysicalRisk – 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.
 THE THREE-STAGE MODEL OF SERVICE CONSUMPTION
The Pre-Purchase Stage –
• Information Search
• Evaluation of Alternative Services
The Service Encounter Stage - Purchase
• Frontline Employees and Customer Interactions - consumers’
interactions with frontline personnel are a significant determinant of
their satisfaction or dissatisfaction with the service firm. Customer
interactions with courteous, knowledgeable and efficient frontline
employees lead to an enhanced corporate image
• Customer-Service Environment Interactions - Service environments
are composed of design and details that must work together to
create the desired service environment. These elements affect
• Consumer to Consumer Interactions - The presence of other
consumers in the same service environment can affect the service
experience of a consumer in a negative or positive way. When
consumers receive social support from other consumers, it might
enhance their service experience, build loyalty, and therefore
increase the profits of the service firm. Conversations between
consumers in the same service environment stabilize their
expectations and perceptions of the service experience, which in
turn reduce their dissatisfaction
• Low-Contact Service Encounters - Many high-contact and medium-
contact services are becoming low-contact services as part of a fast-
growing trend whereby convenience plays an increasingly important
role in consumer choice
Voice-to-Voice Encounters - Are increasingly used as the platform
through which transactions are conducted (e.g., placing an order), and
are used as a channel for after-sales service and recovery processes. It
helps in developing, sustaining and managing consumer relationships
and enhancing satisfaction

Self-Service Encounters - Perceived usefulness, ease of use, reliability

and fun have been identified as key drivers of consumer attitudes
toward SSEs. Self-service encounters not only benefit consumers, but
also frequently benefit service providers by providing them with direct
and immediate feedback from their consumers
Post-Encounter Stage - Evaluation of Service
Customer Satisfaction with Services:
The Expectancy-Disconfirmation Paradigm - Confirmation or
disconfirmation of consumers’ expectations is the key determinant of
satisfaction. Consumers evaluate the service performance they have
experienced and compared to their prior expectations
The Attribute-Based Approach to Satisfaction - The attribute-based
approach considers the evaluation of different attributes of a service as
a requirement of overall satisfaction. Eg. efficiency, ease of use and
convenience are considered as the main attributes determining
consumer satisfaction from Self Service Encounters.
Modeling Consumer Choice — A Student’s Multi-Attribute Model for Choosing a Dry Cleaner

Current Dry Campus Dry New Dry Importance

Cleaner Cleaner Cleaner Weight
Quality of Dry 9 10 10 30%
Cleaning
Convenience of 10 8 9 25%
Location
Price 8 10 8 20%
Friendliness of 2 8 8 5%
Staff
Design of Shop 2 7 8 5%
Service Failure and Behavior of Dissatisfied Customers - Service failures
might result due to various reasons such as poor transaction quality
due to long waits overbooking in excess of service capacity
• Consumer Complaining Behavior - The range of purposes for which
complaints are made include
To change a not acceptable attribute
Inform a service provider of a harmful experience
Request compensation.
• Consumer Switching Behavior - Dissatisfied customers are likely to
switch service providers. Switching intentions increase when
consumers perceive they are not obtaining value for money or
believe the price they paid for a service is unfair.
The Role of Service Quality and Service Value - Perceptions of a firm’s
overall service quality will influence consumers behaviour expressed as
positive word of mouth and recommendation of the service.

Consumer Responses to Service Recovery - To transform dissatisfied

consumers into satisfied advocates of their services, firms respond to
complaints by adopting service recovery tactics. Service recovery refers
to all the “actions of a service provider to mitigate and/or repair the
damage to a customer that results from the provider’s failure to deliver
the service as designed.