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Consumer Behavior in Services-hm

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    CONSUMER BEHAVIOR IN

    SERVICES

    At the end of this module the learning

    outcomes are

    What are the various types of good and

    services

    What are the difficulties markers face in

    understanding consumer behavior in

    services What are the steps to be followed in

    understanding consumer behavior

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    CONSUMER BEHAVIOR IN

    SERVICES

    Services Marketing

    by

    Zeithmal and BitnerChapter 3

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    CONSUMER BEHAVIOR IN

    SERVICES

    Consumer Behavior

    What consumers buy?

    Where consumers buy?

    When consumers buy?

    How consumers buy?

    What consumers buy?

    We study these behaviors

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    CONSUMER BEHAVIOR IN

    SERVICES

    Consumers buying vegetables Most consumers

    Buy fresh vegetables

    Roadside vendors Freshness concept

    In touch with air

    It might have been washed with dirty water

    Do consumers buy Safal frozen vegetables fromMother Diary? Very few buy. A feeling that isnot FRESH

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    CONSUMER BEHAVIOR IN

    SERVICES

    COMPARED TO GOODS SERVICES

    ARE

    More difficult to choose More difficult to evaluate

    Intangibility

    Non-standardized

    Production and consumption together

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    CONSUMER BEHAVIOR IN

    SERVICES

    BENEFITSUNDERSTANDING

    CONSUMER BEHAVIOR

    Low chances of product failure

    Products acceptability higher

    Helps us to make right distribution

    strategies Right promotional strategies

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    CONSUMER BEHAVIOR IN

    SERVICES

    Three types of products

    Search qualities Experience qualities

    Credence qualities

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    CONSUMER BEHAVIOR IN

    SERVICES

    1. SEARCH QUALITIES Consumers can evaluate before purchasing a product

    Color, style, feel, smell, taste

    Example Automobiles

    Can determine attributes before purchase

    Go for test drive Get the entire feel

    Similarly clothing, soaps, soap.

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    CONSUMER BEHAVIOR IN

    SERVICES

    2. EXPERIENCE QUALITIES Consumers can evaluate after purchase or

    during consumption

    Difficult to evaluate than search qualitiesExample Vacations/Holiday package

    Stay at Delhi, want to visit Goa

    How do you evaluate? Visit Goa

    If satisfied, buy again

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    CONSUMER BEHAVIOR IN

    SERVICES

    3. CREDENCE QUALITIES Very difficult to evaluate even after purchase

    and consumption

    Consumers do not have sufficient knowledge

    Examples : SurgeryBypass Complicated

    Consumers have little knowledge

    Visits required after surgery Most difficult to Market

    Difficult for consumers to evaluate

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    CONSUMER BEHAVIOR IN

    SERVICES

    SERVICES

    Dominated by experience and credence

    qualities Consumers employ different evaluation

    processes

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    CONSUMER BEHAVIOR IN

    SERVICES

    Difficult to evaluate

    Easytoevaluate

    High in search

    qualities

    High in experience

    qualities

    High in credence

    qualities

    Most

    Goods

    Most

    Services

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    CONSUMER BEHAVIOR IN

    SERVICES

    1. Information Search In services

    Rely more on personal resources

    Example

    Legal services

    Not advertised on the mass media

    How to choose a lawyer? Speak to friends, relatives

    Word of mouth, relatives

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    CONSUMER BEHAVIOR IN

    SERVICES

    2. EVALUATION OF SERVICE ALTERNATIVES

    Lesser alternatives in services than goods

    For goods, you go to retail shops

    All brands are displayed Choose any one out of competing brands

    In services

    Fewer options

    Go to one bank at a time

    Very little display of simultaneous brands

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    CONSUMER BEHAVIOR IN

    SERVICES

    EMOTION AND MOOD

    Customer in bad mood

    Enters service establishment Service interpretation NEGATIVE

    Customer in good mood

    Service interpretation POSTIVE Behavior of other customers

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    CONSUMER BEHAVIOR IN

    SERVICES

    Example- AIRINDIA Traveling from Delhi to London

    Fellow companion passenger

    Misbehaving Though Air India Service is good

    What do you feel

    Bad experience

    A feeling that Air-India cannot controlmisbehavior of passengers

    May decide not to travel again

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    CONSUMER BEHAVIOR IN

    SERVICESSERVICE PURCHASE Conformance to script important

    Script

    Logical sequence of events expected by the customer

    Example Meeting reputed cardiologist at Apollo hospital

    Patient enters the hospital

    Observes other patients are waiting

    Cardiologist comes

    Talks to you

    Examines you

    Gives you feedback

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    CONSUMER BEHAVIOR IN

    SERVICES

    Example

    If the above script happens you are comfortable

    But if.

    - no patients in hospital- Cardiologist sends his junior to examine you

    - Refuses to meet you due to lack of time

    You feel that service is not up to theexpectations

    Dont change the expected script

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    CONSUMER BEHAVIOR IN

    SERVICES

    CUSTOMER COMPATIBILITY When you are visiting hospital, airlines,

    restaurant or a bank

    How do you feel when there isovercrowding

    Misbehavior of neighboring customers

    Dissatisfied

    Compatibilty of customers is critical

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    CONSUMER BEHAVIOR IN

    SERVICES

    CUSTOMER COMPATIBILITY CRITICAL

    Singapore Airlines

    Seating plan

    Vegetarian customers

    Sit together

    Smokers sit together

    Customers with similar taste and preferencesare made to sit together

    Affects customer satisfaction

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    CONSUMER BEHAVIOR IN

    SERVICES

    4. POST-PURCHASE EVALUATION

    You go for haircut

    Not up to your expectations

    Reasons

    Poor skills of hairstylist

    Blame yourself for choosing wrong hairstylist

    Not communicating what you wanted

    Quality of services depends on customer feedback

    A doctors diagnosis depends on customer feedback

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    CONSUMER BEHAVIOR IN

    SERVICESA. Diffusion of innovation As services are intangible

    Sometimes impossible to test, taste before purchase

    Difficult to introduce innovations

    Example

    Blocked heart arteries Bypass surgery is the traditional diagnosis

    Now Stents

    Resist such innovations

    Not sure of the outcome

    Resist innovation

    Consumers adopt innovations in services more slowly than theyadopt innovations in goods

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    CONSUMER BEHAVIOR IN

    SERVICESB. BRAND LOYALTY Brand switching is less frequent in services than goods

    When you change brands

    Risk, uncertainty

    Costs may be associated

    It is higher in services

    Example

    Changing your Family doctor

    If you choose a new cardiologist

    Insist on new tests

    New medical reports

    Switching cost are high. If perceived risks are high, consumers areunlikely to change brands.

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    CONSUMER BEHAVIOR IN

    SERVICESIMPLICATIONS FOR SERVICE MARKETERS StanChart Credit card division

    Convincing Citibank credit card customers to switch toStanchart credit cards.

    How? Membership fees waived off

    Lower interest rate on outstanding/overdue payments

    Free saving bank account in StanChart Bank

    Stan Chart trying to making switching cost lower

    Marketers need to lower switching costs toshift brand loyalty

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    CONSUMER BEHAVIOR IN

    SERVICES

    VOICE MAIL Benefits

    When you call somebody

    If not available

    Leave message in a data/voice box

    Not dependent on others and reliable

    Confidentiality maintained

    Criticism Not sure whether received Customers feel they are interacting with machine. Do

    not like this

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    CONSUMER BEHAVIOR IN

    SERVICES

    VOICE MAIL IN HOTELS Voice mail tested

    Ordered for guests

    Five star hotels

    Multicultural guests

    More acceptance

    Increasing use

    Why

    Complaint of foreign guests

    Receive distorted messages

    Fairly rapid acceptance

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    INTRODUCTION OF ATMs Introduced in 80s

    Customers resisted

    Didnt want to interact with a machine Not sure of outcomes

    Banks trying to make ATM customer friendly

    One bank

    Introduced ATM Allowed customers to insert cards halfway

    Hold the other half of card by hand

    CONSUMER BEHAVIOR IN

    SERVICES

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    CONSUMER BEHAVIOR IN

    SERVICESINTRODUCTION OF ATMs

    Do transactions

    Customers became more friendly and comfortable to automation

    What else was done

    1.Advertisement campaign. Celebrities using ATMs

    2.Installed Mirrors at ATMs

    . Mood of the customers improve when they use the ATM

    Broken initial resistance

    Customers became comfortable with ATM

    Switched over to fully automated ATMsSuccessful launch of a product by studying consumer

    behavior


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