LECTURE 08 CONSUMER BEHAVIOUR IN SEVICES

CONCEPT
Consumer Behaviour refers to the behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. Study of CB is the study of how individuals make decisions to spend their available resources like time, money and effort on consumption related items. - Schiffman & Kanuck Process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services - Laudon Dellabita Actions of consumers in the market place and the underlying motives for those actions - Ostrow & Smith Study of Consumer Behaviour - Study of what they buy, why they buy, when they buy, where they buy, how often they buy it and how often they use it - Covers processes by which consumers recognize their consumption problem, search for information, evaluate alternatives available in the market, make a decision and choose a product, use and dispose the product for satisfaction and delight.

SEARCH, EXPERIENCE AND CREDENCE PROPERTIES

Search Qualities o Attributes that a consumer can determine before purchasing a product o Include colour, style, price, fit, feel, hardness and smell Experience Qualities o Attributes that can be discerned only after purchase or during consumption o Include taste and wearability Credence Qualities o Characteristics that the consumer may find difficult to evaluate even after purchase and consumption Continuum of Evaluation for Different Types of products

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STAGES IN CONSUMER DECISION MAKING AND EVALUATION OF SERVICES

CONSUMER CHOICE
Need Recognition Information search Evaluation of Alternatives Purchase

CONSUMER EXPERIENCE

POST EXPERIENCE EVALUATION

1. NEED RECOGNITION o Recognition that a need or want exists (need arousal) o Governed by buying motives: o Inherent and Learned Inherent Arise from the basic needs of the customers like hunger, comfort, safety, etc. Influence the customer maximum If unsatisfied Tension Strong and urgent Learned Learns from society/environment Like status, achievement, acceptance, fear etc.
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 Price is generally not a consideration o Internal and External Internal That originate in the minds of the people and are both physical and psychological in nature Can be rational or emotional External Influenced by environment Income, occupation, religion, culture, family, social environment, marketing activities, etc. o Emotional and Rational Emotional Affected by consumers feeling Heart dominates the mind Ego, prestige, pleasure, love & affection, status, ambition, appetite, recreation, etc. Rational Decision is based on logic and justifications, reasoning, consideration of economic consequences Before making any purchase, the consumer satisfies himself with the price, quality, durability, reliability & service 2. INFORMATION SEARCH o Extensive and formalized when service is important to the customer or represents a major investment o Use personal (friends, family, relatives, experts, etc.) and non-personal (mass/selective media, websites, etc.) sources o Way of reducing risk and helping customers feel more confident about their purchases o Perceived Risks o Functionalunsatisfactory performance outcomes o Financialmonetary loss, unexpected extra costs o Temporalwasted time, delays leading to problems o Physicalpersonal injury, damage to possessions o Psychologicalfears and negative emotions o Socialhow others may think and react o Sensoryunwanted impact on any of five senses o How customers handle perceived risk: o Seeking information from respected personal sources o Relying on a firm that has a good reputation o Looking for guarantees and warranties
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Visiting service facilities or trying aspects of service before purchasing Asking knowledgeable employees about competing services Examining tangible cues or other physical evidence Using the Internet to compare service offerings and search for independent reviews and ratings o Important for service firm to reduce perceived risk o Offer performance warranties, guarantees to protect against fears of monetary loss o For products where customers worry about performance, sensory risks: Offer previews, free trials (provides experience) Advertising (helps to visualize) o For products where customers perceive physical or psychological risks: Institute visible safety procedures Deliver automated messages about anticipated problems Websites offering FAQs and more detailed background Train staff members to be respectful and empathetic 3. EVALUATION OF ALTERNATIVES o Search attributes help customers evaluate a product before purchase o Style, color, texture, taste, sound o Experience attributes cannot be evaluated before purchasemust experience product to know it o Vacations, sporting events, medical procedures o Credence attributes are product characteristics that customers find impossible to evaluate confidently even after purchase and consumption o Quality of repair and maintenance work 4. SERVICE PURCHASE o Transition of Purchase Intention into Purchase Decision 5. CONSUMER EXPERIENCE o Service as processes Services are performances that typically involve a sequence of steps, actions and activities These may involve customer interactions with the service provider, steps performed by customers themselves and/or interactions and performances of third parties o Service provision as drama the metaphor of a theatre Service dramas unfold on a stagesettings may change as performance unfolds Many service dramas are tightly scripted, others improvised
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o o o o

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 participants Service roles and scripts Service Roles Roles are combinations of social cues that guide and direct behaviour in a given setting Success of any service performance depends in part on how well the role is performed by the service actor and how well the team of players the role set of both service employees and customers act out their roles Service employees need to perform their roles as per customer expectations Customers must be informed and educated about their roles (if they cooperate with the service provider in following the script, service provision is likely) Service Scripts The logical sequence of events expected by the customer, involving him either as a participant or observer Consist of sequences of actions associated with actors and objects that through repeated involvement define what the customer expects Compatibility of service customers Role of other customers in the service delivery Affects customer satisfaction particularly in case of high contact services Customer coproduction Specifically important in people processing and more specifically in metalstimulus services Emotion and mood Shape evaluation of services

6. POST-EXPERIENCE EVALUATION o Most important in predicting subsequent consumer behaviours and repurchase o Impacts word-of-mouth communications o Affected by customers attributions of dissatisfaction o Positive or negative bias o Brand loyalty o Impacted by: Cost of changing brands
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Availability of substitutes Social ties to the company Received risk associate with the purchase Satisfaction obtained in the past

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