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Chapter 2:

Customer Behavior inService Encounters

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Services projectsM1.ppt Services Projects

M2 .ppt

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09-I-101 Ms. Aastha Sharma

09-I-102 Mr. Abhey Verma

09-I-103 Mr. Abhishek Sharma Roll No 1-5 Presentation on September 3. 2010

09-I-104 Ms. Adiya Shah Group 109-I-105 Ms. Anjali Bisaria

09-I-106 Mr. Ankit Dua

09-I-107 Mr. Ankit Kapur Roll No 6 -10 Presentation on September 10, 2010

09-I-108 Mr. Ankit Narang Group 209-I-110 Mr. Arun Satyan

09-I-111 Mr. Ashutosh Sharma

09-I-112 Ms. Avantika Mathur

09-I-113 Mr. Benny Singh Roll No 11 -15 Presentation on September 17, 201009-I-114 Ms. Bhavna Chawla Group 309-I-115 Ms. Divya Sharma

09-I-116 Mr. Gaurav Sharma

09-I-117 Mr. Gaurav Singh

09-I-118 Mr. Gurdeep Singh Roll No 16 -20 Presentation on September 24, 2010

09-I-119 Mr. Harsh Bhatia Group 409-I-120 Mr. Hitesh Malhotra

09-I-121 Mr. Ishan Chopra

09-I-122 Mr. Jasvinder Singh

09-I-123 Ms. Kirti Sharma Roll No 21 -25 Presentation on October 1 2010

09-I-124 Ms. Maneka Khosla Group 509-I-125 Mr. Manhar Bhasin

09-I-126 Ms. Manju Bindra

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09-I-127 Ms. Mekhla Sharma

09-I-128 Ms. Neha Jaiswal Roll No 26 -30 Presentation on October 8

09-I-129 Ms. Neha Saxena Group 609-I-130 Ms. Niyati Seth

09-I-131 Mr. Pankaj

09-I-132 Mr. Pankaj Chaturvedi

09-I-133 Mr. Pankaj Taneja Roll No 31-35 Presentation on October 22

09-I-134 Ms. Parul Chopra Group 709-I-135 Mr. Parush Gupta

09-I-136 Mr. Pawan Gera

09-I-137 Ms. Pragya

09-I-138 Mr. Pranab Nath Roll No 36 -40 Presentation on October 29

09-I-139 Mr. Pranshur Aggarwal Group 809-I-140 Mr. Praveen Kumar

09-I-141 Ms. Rachan Singh

09-I-142 Mr. Ravi Shanker Pandey

09-I-143 Mr. Ravin A. Verma Roll No 41 -45 Presentation on November 12

09-I-144 Ms. Reema Samui Group 909-I-145 Ms. Richa Pathania

09-I-146 Ms. Ritika Khanwani

09-I-148 Ms. Saanya Malik

09-I-149 Mr. Sahil Bansal Roll No 46 -50 Presentation on November 19

09-I-150 Ms. Sandhya Yadav Group 1009-I-151 Mr. Saurabh Garg

09-I-152 Ms. Shriya Sharma

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09-I-153 Ms. Shweta Gupta

09-I-155 Mr. Siddharth Puri Roll No 51 -55 Presentation on November 26

09-I-156 Ms. Soumya Roy Group 1109-I-157 Mr. Abhishek Sharma

09-I-158 Mr. Tarun Sood

09-I-159 Dr. Vinita Vashist

09-I-160 Mr. Vivek Madan Roll No 56-60 Presentation on December 3

09-II-217 Mr. Gaurav Tyagi Group 12

09-II-235 Mr. Paryag Dabas

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WORK TO DO ACTIVITY Make a continuum1. Blue Jeans2. Business Suit3. Appendix Operation4. Car

5. Casual Clothing6. Car Brake Relining7. Dental Examination8. Condo9. Dress Shoes10. Meal at Nice Restaurant11. Couch12. Eyeglasses13. Golf Lessons14. Day Care

15. Furniture16. Haircut17. Dishwasher 18. Greeting Card19. Dry Cleaning20. Health Club Membership21. Houseplant22. Fast Food23. Legal Representation

24. Ice Cream Cone25. Flu Shot26. Novel27. Jewelry28. House Cleaner 29. Psychotherapy

30.

1. Lean Cuisine Dinner 2. Plumbing Repairs3. Soft Drink4. Running Shoes

5. Poster Framing6. Tailored Clothing7. TV Repair 8. Socks9. Typing Service10. Vacation Package11. Tax Consultant12. Xeroxing/Copying13. Entertainment parks14. Jewellery costume

15. Cds16. Inflight food17. Books on line18. Glasses19. Car 20. Ac repair 21. Bank accounts22. Laptops23. Cellphone

24. Visa assistance25. Loans from friend26. Education Institutes27. IT consultants28. Laundry Detergent29. Life Insurance30. Rental Car

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Canned

foods

Ready-

madeclothes

Auto-

mobiles

Draperies,

Carpets

Rest-

aurantmeals

Repairs:

auto, house,landscaping

Air

travel

Insurance,

Consulting,Teaching

MOSTLY GOODS MOSTLY SERVICES

The Goods-Services

Continuum

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Value Added by Physical, Intangible Elements Helps

Distinguish Goods and Services (Fig 1.6)

Physical

Elements

High

Low Intangible Elements High

Salt

Detergents

CD Player

Wine

Golf ClubsNew Car

Tailored clothing

Fast-Food RestaurantPlumbing Repair

Health Club

Airline FlightLandscape Maintenance

Consulting

Life Insurance

Internet Banking

Source; Adapted from Lynn Shostack

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How Product Attributes Affect Ease of Evaluation

Source:

Adapted from Zeithaml

Most Goods

High in searchattributes

High in experienceattributes

High in credenceattributes

Difficult

to evaluate*Easyto evaluate

Most Services

Clothing

Chair

Motor vehicle

Foods

Restaurant meals

Lawn fertilizer

Haircut

Entertainment

Computer repair

Education

Legal services

Complex surgery

*NOTE: Difficulty of evaluation tends to decrease with broad exposure

to a service categoryandfrequency of use of a specific supplier

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Chapter 2:

Customer Behavior inService Encounters

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Overview Of Chapter 2

w iffere e a ervi e ffe tC t er Behavi r

C t er e i i a i : The Three ta eel f ervi e C pti

rep r ha e ta eervi e ter ta e

t- ter ta e

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A Framework for Developing Effective Service

Marketing Strategies

Understanding Customer Needs, Decision Making,

and ehavior in Service EncountersChapter 2

uilding the Service ModelPart II: Chapters 3-7

Managing the Customer Interface

Part III:C

hapters 8-11

Implementing Profitable Service StrategiesPart IV: Chapters 12-15

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A Framework for Developing Effective Service

Marketing Strategies

wo Key hemes in Part I of the

Services Marketing Strategy Framework:

1. Differences among Services AffectCustomer Behavior

1.T

hree-Stage Model of Service Consumption

Prepurchase Stage: Search,

evaluation of alternatives,

decision

Service Encounter Stage:

Role in high-contact vs. low-

contact delivery

Post-Encounter Stage:Evaluation against

expectations, future

intentions

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How Differences among Services

Affect Customer Behavior

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Differences among Services Affect Customer Behavior

Consumers are rarely involved in the manufactureof goods but often participate in service creationand delivery

Challenge for service marketers is to understandhow customers interact with service operations

ased on differences in nature of service act(tangible/intangible) and who or what is directrecipient of service (people/possessions), thereare four categories of services:

People processingPossession processing

Mental stimulus processing

Information processing

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Four Categories Of Services (Fig 2.1)

Information processing

(services directed at

intangible assets):

Accounting

anking

Nature of the Service Act People Possessions

Tangible Actions People processing


peoples bodies):

Barbers

Health care

Who orWhatIs the Direct Recipient of the Service?

Possession processing


physical possessions):

Refueling

Disposal/recycling

Mental stimulus

processing

(services directed atpeoples minds):

Education

Advertising/PR

Intangible Actions

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Four Categories Of Services

People Processing

Customers must:

Physically enter the service

factory

Co-operate actively with the

service operation

Managers should think

about process and output

from customersperspective

o identify benefits created

and non-financial costs:

ime, mental, physical effort

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People Processing

Eg

Barbers/ beautitions/

Health Care

Education

ourisim

Experiences/

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Possession Processing

Possession Processing

Customers are lessphysically involved

compared to peopleprocessing services

Involvement is limited

Production andconsumption areseparable

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Mental Stimulus Processing

Mental Stimulus Processing

Ethical standards requiredwhen customers whodepend on such services

can potentially bemanipulated by suppliers

Physical presence ofrecipients not required

Core content of services isinformation-based

Can be inventoried

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Information Processing

Information Processing

Information is the mostintangible form of service

output

But may be transformedinto enduring forms ofservice output

Line between informationprocessing and mentalstimulus processing maybe blurred.

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Customer Decision Making:Three-Stage Model of Service

Consumption

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The Purchase Process for Services

Pre purchase Stage

Service Encounter Stage

Post-Encounter Stage

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Prepurchase Stage

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Prepurchase Stage



Prepurchase Stage: Overview

usto ers see solutions toarouse nee s

Evaluating a service a eifficult

ncertaint a out outco esincreases perceive ris

What ris re uction strategies canservice suppliers evelop?

n erstan ing custo ers servicee pectations

o ponents of custo ere pectations

a ing a service purchase ecision

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Customers Seek Solutions to Aroused Needs

People buy goods and

services to meet specific

needs/wants

External sources may

stimulate the awareness ofa need

Companies may seek

opportunities by monitoring

consumer attitudes andbehavior

Fi r .4

r ti l Fi i l rti i ti l t

t i ki t r tir t

Court

yof M

t

rfil

Co

rpor

tion

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Evaluating a Service May Be Difficult

Search attributes help customers evaluate aproduct before purchase

Style, color, texture, taste, sound

Experience attributes cannot be evaluated

before purchasemust experience product to

know it

Vacations, sporting events, medical procedures

Credence attributes are product characteristicsthat customers find impossible to evaluate

confidently even after purchase & consumption

Quality of repair and maintenance wor

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How Product Attributes Affect Ease of Evaluation

Source:

Adapted from Zeithaml

Most Goods

High in searchattributes

High in experienceattributes

High in credenceattributes

Difficult

to evaluate*Easyto evaluate

Most Services

Clothing

Chair

Motor vehicle

Foods

Restaurant meals

Lawn fertilizer

Haircut

Entertainment

Computer repair

Education

Legal services

Complex surgery

*NOTE: Difficulty of evaluation tends to decrease with broad exposureto a service categoryandfrequency of use of a specific supplier

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Perceived Risks in Purchasing and Using

ServicesFunctionalunsatisfactory

performance outcomes

Financialmonetary loss, unexpected

extra costs

Temporalwasted time, delays

leading to problems

Physicalpersonal injury, damage to

possessions

Psychologicalfears and negative

emotions

Socialhow others may think and

react

Sensoryunwanted impact on any of

five senses

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How Might Consumers Handle Perceived Risk?

Seeking information from respected personalsources

Relying on a firm that has a good reputation

Looking for guarantees and warranties

Visiting service facilities or trying aspects of service

before purchasing

Asking knowledgeable employees about competingservices

Examining tangible cues or other physical evidence

Using the Internet to compare service offerings andsearch for independent reviews and ratings

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Strategic Responses to Managing Customer

Perceptions of Risk

Offer performance warranties, guarantees to protectagainst fears of monetary loss

For products where customers worry about

performance, sensory risks:Offer previews, free trials (provides experience)

Advertising (helps to visualize)

For products where customers perceive physical orpsychological risks:

Institute visible safety proceduresDeliver automated messages about anticipated problemsWebsites offeringFAQs and more detailed bac groundTrain staff members to be respectful and empathetic

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AOL Offers Free Trial Software to

Attract Prospective Customers (Fig 2.6)

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Understanding Customers Service Expectations

Customers evaluate service quality by comparingwhat they expect against what they perceive

Situational and personal factors also considered

Expectations of good service vary from one

business to another, and among differentlypositioned service providers in the same industry

Expectations change over time

Example: Service Perspectives 2.1

Parents wish to participate in decisions relating to theirchildrens medical treatment for heart problemsMedia coverage, education, the Internet has made this

possible

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Factors Influencing Customer Expectations Service(Fig 2.8)

Predicted Service

Explicit & Implicit

Service Promises

ord-of-Mouth

Past ExperienceDesired Service

ZONE

OF

OLERANCE

Adequate Service

Personal Needs

Beliefs about

hat Is Possible

Perceived Service

Alterations

Situational Factors

Source: Adapted from Valarie A. Zeithaml, Leonard A. Berry, and A. Parasuraman, The Nature and Determinants of

Customer Expectations of Service, J

ournal of the Academy of Marketing Science 21, no. 1 (1993): pp 1

12.

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Components of Customer Expectations

Desired Service Level:

Wished-for level of service quality thatcustomer believes can and should bedelivered

Adequate Service Level:Minimum acceptable level of service

Predicted Service Level:

Service level that customer believes firmwill actually deliver

Zone of olerance:Range within which customers are willingto accept variations in service delivery

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Prepurchase Stage



Service Encounter Stage: Overview

Service encounters range fromhigh- to low-contact

Understanding the servuctionsystem

Service marketing systems: high-

contact and low-contact

Role and script theories

Theater as a metaphor for servicedelivery: An integrative

perspective

Implications for customerparticipation in service creationand delivery

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Service Encounters Range from

High-Contact to Low-Contact

Figure 2.9

Levels ofCustomerContact with

Service Organizations

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Distinctions :High-Contact &Low-Contact Services

High-Contact ServicesCustomers visit service facility and remain throughoutservice delivery

Active contact between customers and service personnel

Includes most people-processing services

Low-Contact ServicesLittle or no physical contact with service personnelContact usually at arms length through electronic or

physical distribution channels

New technologies (e.g. the Web) help reduce contact

levelsMedium-Contact Services

Lie in between These Two

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The Servuction System: Service Production and Delivery

Service Operations (front stage and backstage)Where inputs areprocessedand service elementscreatedIncludes facilities, equipment, and personnel

Service Delivery (front stage)Where final assembly of service elements ta esplace and service is delivered to customersIncludes customer interactions with operations andother customers

Service Marketing (front stage)Includes service delivery(as above) and allothercontacts between service firm and customers

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Service Marketing System for a High-Contact Srvc(Fig 2.10)

The

CustomerTechnical

Core

Interior & Exterior

Facilities

Equipment

Service People

Other

Customers

Advertising

Sales Calls

Market Research Surveys

Billing/Statements

Misc. Mail, Phone Calls,E-mails, Faxes, etc.

Website

Random Exposure toFacilities/Vehicles

Chance Encounters withService Personnel

Word of Mouth

Service Delivery System Other Contact Points

Service Operations System

Backstage

(invisible)Front Stage

(visible)Other

Customers

SERVICE MARKETING SYSTEM

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Service Marketing System for Low-Contact Srvice (Fig2.11)

The

Customer

Backstage(invisible)

Front Stage(visible)

Advertising

Market ResearchSurveys

Billing/Statements

Random Exposure to

Facilities/Vehicles

Word of Mouth

Phone, Fax,Web- site,etc.

SelfServiceEquipment

Mail

TechnicalCore

Other Contact PointsService Delivery System

Service Operations

SystemSERVICE MARKETINGSYSTEM

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Theater as a Metaphor for

Service Delivery

All the worlds a stage and all

the men and women merelyplayers. They have their exits

and their entrances and each

man in his time plays many

parts

William Shakespeare

As You Like It

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Theatrical Metaphor: An Integrative Perspective

Service dramas unfold on a stagesettings maychange as performance unfolds

Many service dramas are tightly scripted, othersimprovised

Front-stage personnel are like members of a castLike actors, employees have roles, may wear specialcostumes, speak required lines, behave in specificways

Support comes from a backstage production teamCustomers are the audiencedepending on type ofperformance, may be passive or active participants

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Implications of Customer Participation in Service

Delivery

Greater need forinformation/training to helpcustomers to perform well,get desired results

Customers should begiven a realistic servicepreview in advance ofservice delivery, so they

have a clear picture oftheir expected role

Figure 2.13: Tourists Appreciate Easy-to-

Understand Instructions When Traveling

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Prepurchase Stage



Post-Encounter Stage: Overview

Evaluation of

serviceperformance

Future

intentions

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Customer Satisfaction Is Central to the Marketing

Concept

Satisfaction defined as attitude-like judgment following aservice purchase or series of service interactions

Customers have expectations prior to consumption,

observe service performance, compare it to expectations

Satisfaction judgments are based on this comparisonPositive disconfirmation ifbetterthan expected

Confirmation ifsame as expected

Negative disconfirmation ifworse than expected

Satisfaction reflects perceived service quality,

price/quality tradeoffs, personal & situational factors

Research shows links between customer satisfaction

and a firms financial performance

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Customer Delight: Going Beyond Satisfaction

Research shows that delight is a function ofthree components:

Unexpectedly high levels of performance

Arousal (e.g., surprise, excitement)

Positive affect (e.g., pleasure, joy, orhappiness)

Is it possible for customers to be delighted by

very mundane services

Strategic links exist between customersatisfaction and corporate performance.

Getting feedback during service delivery helpto boost customer loyalty

Progressive Insurance seeks to delightcustomers through exceptional customerservice (Best Practice in Action 2.1)

Other examples

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Summary of Chapter 2:

Customer Behavior in Service Encounters (1)

Four broad categories of services1. People processing,

2. Possession processing,

3. Mental stimulus processing

4. Information processing

Categories based on differences in:

Nature of Service Act (tangible or intangible), &

ho is direct recipient of service(people or possessions)

Each poses distinctive service management challenges

Three-Stage Model of Service Consumptionhelps us to understand and better manage customer behavior

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Prepurchase StageCustomers seek solutions to aroused needs

Evaluation alternatives are more difficult when a serviceinvolves experience and credence attributes

Customers face a variety of perceived risks in selecting,purchasing and using services

Steps taken to reduce customers risk perceptions,include: (1) guarantees and warranties, (2) previews ofservice and visits to service facilities, (3) employeetraining, (4) instituting visible safety procedures, (5) easyaccess to information, and (6) advance notice of

problems or delaysCustomer expectations of service range from desiredto adequate with a zone of tolerance in between; ifactual service is perceived as less than adequate,customers will be dissatisfied

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Service encounter stageService encounters range from high contact to low contact

Servuction system differs by level of contact:

High-contact services: Most parts of operations, service delivery, andmarketing systems are exposed to customers

Low-contact services: Some parts of systems are invisible to customers

Role and script theories help us understand and manage customerbehavior during encounters

Theatrical view of service delivery offers insights for design, stage-managing performances, and relationships with customer audience

Post-encounter stageIn evaluating service performance, customers can have expectationspositively disconfirmed, confirmed, or negatively disconfirmed

Unexpectedly high levels of performance, arousal and positive affect arelikely to lead to delight

WORK TO DO ACTIVITY M k ti

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WORK TO DO ACTIVITY Make a continuum1. Blue Jeans

2. Business Suit

3. Appendix Operation

4. Car

5. Casual Clothing6. Car Brake Relining

7. Dental Examination

8. Condo

9. Dress Shoes

10. Meal at Nice Restaurant

11. Couch

12. Eyeglasses

13. Golf Lessons14. Day Care

15. Furniture

16. Haircut

17. Dishwasher

18. Greeting Card

19. Dry Cleaning

20. Health Club Membership

21. Houseplant22. Fast Food

23. Legal Representation

24. Ice Cream Cone

25. Flu Shot

26. Novel

27. Jewelry

28. House Cleaner

29 Psychotherapy

1. Lean Cuisine Dinner

2. Plumbing Repairs

3. Soft Drink

4. Running Shoes

5. Poster Framing6. Tailored Clothing

7. TV Repair

8. Socks

9. Typing Service

10. Vacation Package

11. Tax Consultant

12. Xeroxing/Copying

13. Entertainment parks14. Jewellery costume

15. Cds

16. Inflight food

17. Books on line

18. Glasses

19. Car

20. Ac repair

21. Bank accounts22. Laptops

23. Cellphone

24. Visa assistance

25. Loans from friend

26. Education Institutes

27. IT consultants

28. Laundry Detergent

29 Life Insurance

day2 services ws, 2010[1]

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