1. 7/28/2010
Chapter Objectives
CHAPTER 2
Consumer Behavior in a Understand the three-stage model of
Services Context service consumption.
Know how customers evaluate services and
what determines their satisfaction.
Consumer Decision Making Pre-purchase Stage Overview (1)
Pre-purchase Stage • Customers seek solutions to
aroused needs
• The Three-Stage Model of Service • Evaluating a service may be
difficult
Consumption • Uncertainty about outcomes
Increases perceived risk
Pre-purchase Stage Service Encounter • What risk reduction strategies can
Stage service suppliers develop?
Service Encounter Stage • Understanding customers’ service
expectations
Post-purchase Stage • Components of customer
expectations
Post-purchase Stage • Making a service purchase
decision
Pre-purchase Stage Overview (2)
Pre-purchase Stage – Need Awareness
Need awareness • A service purchase is triggered by an
Information search underlying need (need arousal)
Evaluation of alternatives
Service attributes • Needs may be due to:
Perceived risk – People’s unconscious minds (e.g., aspirations)
Service expectations – Physical conditions (e.g., chronic back pain)
Purchase decision – External sources (e.g., marketing activities)
• When a need is recognized, people are
likely take action to resolve it
1

2. 7/28/2010
Pre-purchase Stage – Evaluation of
Pre-purchase Stage – Information Search
Alternatives (1)
• When a need is recognized, people will Service Attributes
search for solutions. • Search attributes help customers evaluate a product before
purchase
• Several alternatives may come to mind and – Style, color, texture, taste, sound
these form the evoked set.
• Experience attributes cannot be evaluated before purchase—
Evoked set = set of possible services or brands must “experience” product to know it
that a customer may consider in the decision – Vacations, sporting events, medical procedures
process
• When there is an evoked set, the different • Credence attributes are product characteristics that
customers find impossible to evaluate confidently even after
alternatives need to be evaluated before a purchase and consumption
final choice is made. – Quality of repair and maintenance work
Pre-purchase Stage – Evaluation of Pre-purchase Stage – Evaluation of
Alternatives (2) Alternatives (3)
Perceived Risks Perceived Risks - How Do Consumers Handle
Them?
• Functional – unsatisfactory performance outcomes • Seeking information from respected personal sources
• Financial – monetary loss, unexpected extra costs • Using Internet to compare service offerings and search for
• Temporal – wasted time, delays leading to problems independent reviews and ratings
• Physical – personal injury, damage to possessions • Relying on a firm that has a good reputation
• Psychological – fears and negative emotions • Looking for guarantees and warranties
• Social – how others may think and react • Visiting service facilities or trying aspects of service before
• Sensory – unwanted impact on any of five senses purchasing
• Asking knowledgeable employees about competing services
Perceived Risks – Strategies for Firms to Service Expectations
Manage Consume Perceptions of Risk • Customers evaluate service quality by
comparing what they expect against what
they perceive
Free trial (for services with high experience attributes)
Advertise (helps to visualize)
– Situational and personal factors also considered
Display credentials • Expectations of good service vary from one
Use evidence management (e.g., furnishing, equipment etc.) business to another, and differently
Offer guarantees positioned service providers in same industry
Encourage visit to service facilities • Expectations change over time
Give customers online access to information about order status
• Example:
– Parents wish to participate in decisions relating to
their children’s medical treatment for heart
problems
– Media coverage, education, Internet has made
this possible
2

3. 7/28/2010
Service Expectations – Factors Influencing Service Expectations – Components of
Consumer Expectations of Service Custom Expectations
(Fig. 2.15)
• Desired Service Level:
– Wished-for level of service quality that customer believes can and
should be delivered
• Adequate Service Level:
– Minimum acceptable level of service
• Predicted Service Level:
– Service level that customer believes firm will actually deliver
• Zone of Tolerance:
– Range within which customers are willing to accept variations in
service delivery
Source:Adapted from Valarie A. Zeithaml, Leonard A. Berry, and A. Parasuraman, “The Nature and Determinants of
Customer Expectations of Service,” Journal of the Academy of Marketing Science 21, no. 1 (1993): 1-12
Service Encounter Stage – Overview (1)
Pre-purchase Stage – Purchase Decision
Pre-purchase Stage • Service encounters range from
• When possible alternatives have been compared and high- to low-contact
evaluated, the best option is selected • Understanding the servuction
• Can be quite simple if perceived risks are low and alternatives system
are clear Service Encounter • Theater as a metaphor for
Stage service delivery: An integrative
• Very often, trade-offs are involved. The more complex the
perspective
decision, the more trade-offs need to be made
Service facilities
• Price is often a key factor in the purchase decision
Personnel
Post-purchase Stage
Role and script theories
Service Encounters Range from • High-contact Services
High-contact to Low-contact (Fig 2.20) –Customers visit service facility and remain
throughout service delivery
–Active contact between customers and service
personnel
–Includes most people-processing services
• Low-contact Services
–Little or no physical contact with service
personnel
–Contact usually at arm’s length through
electronic or physical distribution channels
–New technologies (e.g. Web) help reduce contact
levels
• Medium-contact Services Lie in between
These Two
3

4. 7/28/2010
The Servuction System (Fig 2.22) Servuction System:
Service Production and Delivery
• Servuction System – visible front stage and invisible backstage
• Service Operations (front stage and backstage)
– Technical core where inputs are processed and service elements created
– Includes facilities, equipment, and personnel
• Service Delivery (front stage)
– Where “final assembly” of service elements takes place and service is
delivered to customers
– Includes customer interactions with operations and other customers
• Other contact points
– Includes customer contacts with other customers
Theater as a Metaphor for
• Good metaphor as service delivery is a series of events that customers experience
Service Delivery as a performance
• Service facilities
– Stage on which drama unfolds
– This may change from one act to another
“All the world’s a stage and all the • Personnel
men and women merely players.
They have their exits and their – Front stage personnel are like members of a cast
entrances and each man in his time – Backstage personnel are support production team
plays many parts”
• Roles
– Like actors, employees have roles to play and behave in specific ways
William Shakespeare • Scripts
As You Like It – Specifies the sequences of behavior for customers and employees
Post-encounter Stage - Overview • Satisfaction defined as attitude-like
judgment following a service purchase or
series of service interactions
Pre-purchase Stage
• Customers have expectations prior to
Evaluation of service consumption, observe service performance,
Service Encounter
performance compare it to expectations
Stage Future intentions
• Satisfaction judgments are based on this
comparison
Positive disconfirmation if better than expected
Post-purchase Stage
Confirmation if same as expected
Negative disconfirmation if worse than
expected
4

5. 7/28/2010
Customer Delight:
Going Beyond Satisfaction Summary of Chapter 2:
• Research shows that delight is a function • Three-stage Model of service consumption helps us to understand and better manage
of 3 components customer behavior
• Pre-purchase stage
– Unexpectedly high levels of
– Customers seek solutions to arouse (stimulate) needs
performance
– Evaluation alternatives is more difficult when a service involves experience and
– Arousal (e.g., surprise, credence attributes
excitement) – Customers face perceived a variety of perceived risks in selecting, purchasing and using
services
– Positive affect (e.g., pleasure, – Customers can use a variety of ways to reduce perceived risk and firms can also manage
joy, or happiness) risk perceptions
• Once customers are delighted, their – Customer expectations of service range from “desired” to “adequate” with a zone of
expectations are raised tolerance in between; if actual service is perceived as less than adequate, customers
will be dissatisfied
• If service levels return to previous levels, – A purchase decision has to be made
this may lead to dissatisfaction and it will
be more difficult to “delight” customers
in future
Summary of Chapter 2 (cont.):
• Service encounter stage
– Service encounters range from high contact to low contact
– Servuction system consists of two parts:
• Service operations system
• Service delivery system
– Role and script theories help us understand, manage customer behavior during
encounters
– Theatrical view of service delivery offers insights for design, stage-managing
performances, and relationships with customer “audience”
• Post-purchase stage
– In evaluating service performance, customers can have expectations positively
disconfirmed, confirmed, or negatively disconfirmed
– Unexpectedly high levels of performance, arousal and positive affect are likely
to lead to delight
5