Consumer Behavior in Services

Objective :

To Learn Customer expectation of service

Buying situations faced by the consumer Customer perception of service Understanding customer expectation and perception through market research

Introduction :
The customer is the main reason for the existence of the service firm. They form the basis for all marketing strategies like segmenting, targeting and positioning. In the face of increasing competition, without an understanding of the customers it would be impossible for the marketer to deliver the offer.

The buying behavior of the consumer is studied, because the consumers mind is like a Black Box.

Introduction :
External stimuli and stimulation Process acting on the consumer

Continue.

A. Company Controlled: Service Offer Price Advertising Promotions Distribution Outlets

BUY
RESPONSE CUSTOMERS MIND

B. Social Forces:

Words of Mouth Reference Groups

NO BUY

Customer Expectation of Service:

Expectations can pose a major challenge because they can shift constantly and easily. How satisfied or dissatisfied the customers are is determined by these expectations and service performance in meeting them.

Service performance Customer Satisfaction = Customer Expectation

It is very hard to calculate the satisfaction by merely a formula as it is influenced by complex factors. But this calculation serves as a reminder that customers level of satisfaction can be affected by changes in either their expectations or service performance.

Always watch for the changes:

If the customers satisfaction level is changing, find out if something has happened either at their end or at the service providers end. If satisfaction is rising, find out what youre doing right, so you can keep doing it. if satisfaction is slipping downward, figure out how to reverse the situation before it falls off the chart.

What does the customer Buy ?

The customer mostly buys goods, services, people, places, events, ideas, information and experiences. These can be : High Involvement Offers. Low Involvement Offers/ Impulse offers. High involvement service product have the following characteristics: Complexity of Features High Price

High Perceived Risks

Large Differences in Features Large Number of Users Enduring Products

Reflects self concept of the Buyer

Low involvement service products have the following features: 1. Low price 2. Less Difference in Features 3. Simple Features in the Service Product 4. Does Not Reflect a Consumers Personality 5. The Products are of Mostly Daily Needs 6. Low Brand loyalty

Impulse Purchases: A customer goes through such purchases without any premeditated Plans made at the beginning of the day. It is triggered by five senses

Buying situations faced by the Consumer:

Customer find themselves in different buying situations, from purchase to purchase and service transaction to service transaction. The second buying situation would differ greatly from the first if one or more of the following factors are absent:

The customer is aware of the service product category and service brands.
The customer has definite decision-making criteria about the purchase of the service offer.

The customer is competent enough to evaluate the service offer and also has definite evaluation criteria.

The three buying situations as elaborated by Howard and Sheth are.

Straight Re-buy or Reutilized response behavior Modified Re-buy or Limited problem solving Extensive problem solving or critical problem solving or new task.

Customer Perception of Service

Perception: It involves the way we view the world around us. It adds meaning to information gathered via five senses of touch, smell, hearing, vision and taste.

Service quality

Situational factors

Product quality

Customer satisfaction

Customer loyalty

Price

Personal factors

Perception is the meaning that consumers ascribe to what they see around them. The meaning that is given is influenced by: Past experience or learning

preconceived notations, Prejudice and assumption

Expectations and personality Family background, values, belief and others social factors and Genuine knowledge and awareness

The meaning and interpretation to what customers see finally become a great influencer in the decision-making process of any service offer consumption Example: 1. Jet Airways, to differentiate, set a dress code for its airhostesses and female stewards. Three woman of a family spanning three generations, they would all view the image that the airhostess presents differently. Based on their individual perceptions, the three women might have different behavior in their service consumption process, which the marketer would be quite keen to know.

2. If toy company brings out their newest version of Barbie dressed in white, they might get two types of reactions in the retail stores. The people in the west would perceive that Barbie was getting married. While the other in east may perceive Barbie to be a widow.

The perception of the service firm or its offers consists of factors both internal and external to the customer and is greatly affected by the following: The external communication made by the service firm. The quality of experience the customer undergoes in the service encounter The post purchase feeling Internal factors are most of the time psychological and personal elements like motives and expectations that are unique to customers that affect attention and perception. The marketer cannot control them and they limit the effectiveness of service strategy. External factors are either the nature of the offer or its marketing mixes, which can be controlled by the firm.

External Factors Size Position Movement Repetition Intensity Contrast Color Directionality Isolation Novelty Learned attention Attractive spokesperson Scene changes

Internal Factors Selective attention Selective exposure Selective Reception, Comprehension and retention Subliminal perception Selective destortion perceptual vigilance or defense Expectation Mood Involvement Experience

Customer Perception

THANK YOU