Customer Behavior and Customer Handling

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Objective of this chapter

This chapter provides information about the manner in which purchasing decisions are made by involving fully in the process and how to handle post purchase behaviour. It also points out how customer service can be a decisive factor in gaining competitive advantage. In addition, it provided frequently asked questions by customers getting a home loan.

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Purchase Decisions and Consumer Involvement

• Marketers are interested in how consumers make choices about the products and services they buy.

• Two of the factors determining these purchase decisions are the complexity of the customer’s decision making process and the nature of the product or service being considered. For example, a decision about a small, frequently purchased item may involve very little thought, whereas a large, complex or expensive item such as a house will usually involve a great deal of deliberation.

• The more a person becomes involved in a purchase because of its financial or personal importance, the more information that person will seek about the product and the longer he/she will take to evaluate the alternatives and reach a decision.

• Consumers require information to reduce their perceived level of risk.

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Purchase Decisions and Consumer Involvement

• These risks include: – The product not working to expectation– The possibility of losing money– Paying too much, i.e., a competitor may offer a lower price– Opportunity risk, i.e., spending the money on one product means

that opportunities to spend the money in another way might be foregone.

• To reduce these risks, consumer read newspaper articles and advertisements, discuss their proposed purchase with family and friends, and talk to salesperson to ask questions and request more information.

• The implication of this process is that when consumers are involved in the purchase decision, they may be more responsive to complex advertising messages and listening to the product’s competitive benefits.

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Post Purchase Behaviour

• Marketing has achieved its goal of customer satisfaction if expectations have been met or exceeded and the decision process is complete.

• However, sometimes customers remain dissatisfied and will seek reassurance that they have made the right decision.

• In the time following a purchase, particularly a significant purchase, the customer may experience uneasiness and concern and may ask questions such as ‘Should I have gone with the fixed-rate loan? It looks like interest rates are going to fall further’.

• This feeling of ‘post-purchase’ discomfort in psychological terms is called ‘cognitive dissonance’.

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Post Purchase Behaviour

• It relates to the negative feelings a person may experience following a purchase commitment and results from the fact that the people do not like to hold two or more conflicting beliefs or ideas at the same time. Because they understand that purchases can leave customers feeling dissatisfied, effective marketers support their customers’ choices by,

• For example, following up the sale, providing additional services and toll free hotlines. Keeping in contact with customers is also an excellent way to discover problems they may be experiencing, solving them, and building customer loyalty.

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Customer Service

• Focus on customer service• Good service is profitable

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Focus on customer service

• Customer service is viewed by an increasing number of organizations as one of the most important ways of establishing competitive advantage.

• Customer service can be one of the few differentiating factors in markets where there is a great deal of similarity between products and services.

• Customers who do not receive good service from one organization have many other competitors to choose from.

• Close attention to customer feedback, prompt responses to complaints and provision of services such as help-lines and internet sites are organizational responses to the challenge of providing high quality customer service.

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Good service is profitable

• Studies have repeatedly shown that good service leads to higher profits. • For an organization to have a customer service focus, it must emphasize

the importance of customer interactions whenever they occur. The periods during which the customer interacts with the service provider are sometimes called service encounters. Some of the criteria used by customers to determine the quality of service are:– Convenience – ease of access to the service– Communication – customer understands the service and how much it

costs– Competence – the service provider is suitably qualified– Courtesy – service representatives are friendly and helpful– Reliability – the service is performed consistently and the staff are

dependable– Credibility – the service provider is trustworthy and believable

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Summary

• Marketers are interested in how consumers make choices about the products and services they buy.

• Marketing has achieved its goal of customer satisfaction if expectations have been met or exceeded and the decision process is complete. However, sometimes customers remain dissatisfied and will seek reassurance that they have made the right decision.

• Customer service can be one of the few differentiating factors in markets where there is a great deal of similarity between products and services.

• Studies have repeatedly shown that good service leads to higher profits.

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Assignments

1. What measures would you take to ensure good service quality?

2. Prepare answers to all the frequently asked questions. What other questions can you expect from the customers?

3. Prepare a list of activities you would indulge in to ensure that your service meets the six criteria of a good quality service.

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Thank You