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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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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
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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
