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UNIT.2 Service Consumer

Behavior
Understanding Consumer Behavior,
Customer expectations & perception,
managing & exceeding customer
service expectations, Strategic for
influencing customer perception.
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What is the consumer
Behavior?
Consumer Behavior is defined as the
actions or beliefs that guide a person to
purchase & consume a product or service.
The purchase decision of consumer
are not made in isolation, but rather, they
are influenced by environmental factor
such as culture, social class, family &
other institutional factors.
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The service sector
The services sector has been growing at a
rate of 8% per annum in recent years
More than half of our GDP is accounted
for from the services sector
This sector dominates with the best jobs,
best talent and best incomes
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There are no such thing as
service industries.There are only
industries whose service
components are greater or less
than those of other industries.
Everybody is in service.
-Theodore Levitt-
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What is services?
It is the part of the product or the
full product for which the customer
is willing to see value and pay for
it.
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Difference between physical
goods and services
Physical goods Services
tangible intangible
homogeneous heterogeneous
Production and distribution are
separated from consumption
Production, distribution and
consumption are simultaneous
processes
A thing An activity or process
Core value processed in factory Core value produced in the buyer-
seller interaction
Customers do not participate in the
production process
Customers participate in production
Can be kept in stock Cannot be kept in stock
Transfer of ownership No transfer of ownership
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Qualities of services
Search qualities
Experience qualities
Credence qualities
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Search Qualities:-
A search qualities that can be estimated
before the purchase or consumption of a
product.
search qualities for goods include
attributes such as color, design, style,
price, fit, etc.
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Experience qualities
Experience qualities include those
attributes of a good or a services, which
can be assessed by a customer only after
its purchase & utilization.
Ex. As the passenger
traveling bus or others.
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Credence Qualities
The qualities of product or a service that are
difficult to asses even after its purchase &
consumption/utilization are referred to as
credence qualities.
for Ex. Service offered by Doctor
& Consultants are high in credence qualities
because the people who can deliver these
service require specialized knowledge & most
often these services are accepted on faith.
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Search
qualities
Experience
qualities
Credence
qualities
Tangibility Access Competence
Credibility Courtesy Security
Reliability
Responsivene
ss
Understanding
the customer
Communicatio
ns
Dimensions of SEC qualities
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Consumer Decision making
Process
Need perception.
Search for information.
Evaluation of alternatives.
Purchase & consumption.
Post-purchase evaluation.

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Consumer decision making process
Environmental factors:
-Culture
-Subculture
-Social class
-Reference
Groups
-Family
Need Perception
Search information
Evaluation Alternatives
Purchase decision
Post-purchase evaluation
External Source;
a) Personal source
b) Commercial sources
c) Public sources
d) Experiential sources
Internal sources
Market activities
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Understanding Customer
Requirement
Customer satisfaction is dependent on the
extent to which the service provider is able
to meet customer expectation.
Customer dissatisfaction occurs
when there is a difference between what
the customer desire & what the service
provider delivers.
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Customer Expectations
Customer Expectation are based on
customers on customers experience with
the product & service ; feedback received
from friends. Colleagues & relatives; or
may be based on their present needs.
for ex. Instance, insurance customer
often find that most of their requirement
are not met by insurance policies due to
exclusion clauses.
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Customer service expectation can be measured
along five dimensions of service quality.
Assurance:- this refers to the ability of the
service provider & his employees to use
their knowledge & courteous behavior to
instill trust & confidence in customers
regarding the service.
Empathy:-this refers to the service
providers ability to show concern for
customers & devote individual attention to
each customer.


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Reliability:- This refers to the ability of the
service provider to accurately perform the
promised service.
Responsiveness:- it refers to the willingness of
the service provider & his staff to provide
assistance & prompt service to customers.
Tangibles: This dimension of service quality
refers to those element, which provide tangibility
to the service & include physical facilities,
equipment of the service provider, dress &
appearance of the service personal.
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Types of service Expectation
1.Desired Service: it is defined as the service that
a customer desires & to received. in other
words, the desired service expectation of a
customer are a combination of what she/he feels
that a service provider can offer & should offer.
2. Adequate Service: Adequate service is the
minimal level of service that a customer is willing
to accept from a service provider & is based on
the customers perception of what level of
service is acceptable to him.


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3. Predicted Service:- it is the service level
between the desired & adequate service
level of a customer & lies in the Zone of
tolerance.
Zone of Tolerance:- it is the gap between
a customers desired service expectations
& the adequate service expectation.
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Managing Service quality
Gap between management perceptions and
consumer expectations
Gap between management perceptions and
service quality specifications
Gap between service quality specifications and
service delivery
Gap between service delivery and external
communication
Gap between expected service and perceived
service
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Determinants of service quality
Reliability delivering on promises
Responsiveness willing to help
Assurance inspiring trust and confidence
Empathy individualising customers
Tangibles- physical representation

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Moments of truth
It is the customer service encounter
Every positive or negative experience of
the consumer would have fall-out on the
overall service experience
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In services, the last
experience remains
uppermost in your mind.
Therefore, it is not enough to
be good, you have to be
consistently good
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Services Monitoring
Continuous auditing of competitor service
levels versus own company
Importance - performance analysis
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Importance Performance
Analysis

Concentrate
here

Keep up the
good work

Low priority

Possible overkill
I
M
P
O
R
T
A
C
E
P E R F O R M A N C E
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Service quality is directly
proportional to employee
satisfaction
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When customers visit a service
establishment
Their satisfaction will be influenced by
Encounters with service personnel
Appearance and features of service
facilities exterior and interior
Interactions with self service equipment
Characteristics and behaviour of other
customers
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Customer Service Expectations
Desired Service the wished for service
Adequate Service the service that would
be acceptable
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Zone of Tolerance
Difference between the desired
service and the adequate service
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Service Encounter Themes
Recovery
Adaptability
Spontaneity
Coping
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Recovery
Dont
Ignore customer
Blame customer
Leave customer to
fend for himself
Downgrade
Act as if nothing is
wrong
pass the buck


Do
Acknowledge
problem
Explain causes
Apologise
Compensate/upgrade
Lay out options
Take responsibility
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Adaptability
Dont
Promise and fail to
keep them
Show unwillingness to
try
Embarrass the
customer
Laugh at the
customer
Avoid responsibility
Do
Recognise the
seriousness
Acknowledge
Anticipate
Accommodate
Adjust
Explain rules/policies

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Spontaneity
Dont
Exhibit impatience
Yell/laugh/swear
Steal from customers
Discriminate
Ignore



Do
Take time
Be attentive
Anticipate needs
Listen
Provide information
Show empathy


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Coping
Dont
Take customers
dissatisfaction
personally
Let customers
dissatisfaction affect
others

Do
Listen
Try to accommodate
Explain
Let go of the
customer
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Types of complainers
Passives
Voicers
Irates
Activists

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Customer complaints
It pays to resolve customer complaints
On an average only 5 % dissatisfied customers
complain. Others simply go over to the
competitor
A satisfied consumer speaks to an average of 3
people on his her experience
A dissatisfied consumer gripes to on an average
11 persons about his/her unpleasant experience
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Companies that pay importance to
resolving customer complaints
Pay attention to quality and training of
manpower recruited
Have clear benchmarks on service quality and
communicate to employees
Take remedial steps to improve customer
satisfaction and prevent repeats of customer
dissatisfaction
Have a data base on customer complaints that is
periodically analysed and policies adjusted
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Satisfied employees will
produce satisfied customers
Morale
Motivation
Mood

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Managing Service Productivity
Giving quality service is an expensive business
Not every consumer is willing to pay extra for
service quality
Service providers would have to find their
optimum service quality/cost ratios
Can technology substitute part of the labour
content?
Can customers substitute part of the labour
content?
Making services obsolete by product innovations
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