Service Marketing

1. Chapter- 1.5
Customer Expectations and Perceptions of
Market Research

2. Objectives of Chapter:
Listening to Customers through Research
 Present the types of and guidelines for marketing research in services.
 Show how marketing research information can and should be used for services.
 Describe the strategies by which companies can facilitate interaction and
communication between management and customers.
 Present ways that companies can and do facilitate interaction between contact people
and management.

3. Marketing research is a function that links the consumer, customer ,and public
to the marketer through information – information used to identify and
define marketing opportunities and problems ; generate, refine ,and evaluate
marketing actions; monitor marketing performance ; and improve
understanding of marketing as a process. Marketing research specifies the
information required to address these issues, designs the method of collecting
information ,manages and implements the data collecting process ,and
analyses and communicates the findings and their implications.

4. Part 3
UNDERSTANDING
CUSTOMER
REQUIREMENTS

5.  Using Marketing Research to Understand Customer
Expectations
 Elements in an Effective Services Marketing Research
Program
 Analyzing and Interpreting Marketing Research Findings
 Model Services Marketing Research Programs
 Using Marketing Research Information
 Upward Communication

6. Common Research Objectives for Services
 To discover customer requirements or expectations for service.
 To monitor and track service performance.
 To assess overall company performance compared with that of competition.
 To assess gaps between customer expectations and perceptions.
 To identify dissatisfied customers, so that service recovery can be attempted.
 To gauge effectiveness of changes in service delivery.
 To appraise the service performance of individuals and teams for evaluation,
recognition, and rewards.
 To determine customer expectations for a new service.
 To monitor changing customer expectations in an industry.
 To forecast future expectations of customers.

7. CRITERIA FOR AN EFFECTIVE SERVICES
RESEARCH PROGRAMME
 A Services Research Programme can be defined as the
composite of separate studies and types needed to address
research objectives and execute an overall measurement
strategy.
 Myriad types of research could be considered in a research
programme but certain criteria must be met if the programme
is to be effective and efficient.
 Understanding these criteria will help a company evaluate
different types of research and chose the ones most
appropriate to its research objectives.

8. Criteria for an Effective
Service Research Program
 Includes both qualitative and quantitative research
 Includes both expectations and perceptions of customers
 Balances the cost of the research and the value of the
information
 Includes statistical validity when necessary
 Measures priorities or importance of attributes
 Occurs with appropriate frequency
 Includes measures of loyalty, behavioral intentions, or
actual behavior

9. CRITERIA FOR EFFECTIVE SERVICES RESEARCH
Research
Objectives
Includes
Perceptions
and
Expectations
of
Customers
Includes
Measures
of
Loyalty or
Behavioral
Intentions
Includes
Statistical
Validity
When Necessary
Measures
Priorities
or
Importance
Occurs
with
Appropriate
Frequency

10. Stages in the (Marketing) Research Process
Define
Problem
and Research
Objectives
Develop
Services
Measurement
Strategy
Implement
Research
Program
Interpret
and
Analyze
Findings
Report
Findings
Collect
and
Tabulate
Data
STAGE
1:
STAGE
2:
STAGE
4:
STAGE
3:
STAGE
5:
STAGE
6:

11. Portfolio of Services Research:
Research Is NOT Just Surveys!
 Customer Complaint Solicitation
 “Relationship” Surveys
 Post-Transaction Surveys
 Customer Focus Groups
 “Mystery Shopping” of Service Providers
 Employee Surveys
 Lost Customer Research
 Critical Service Encounters Research

12. 12
Common means for answering questions
 Ask customers directly
 mail, phone, face-to-face, online
 one-on-one, in groups, formal/informal
 Observing customers
 anthropological tools, qualitative depth
 Get information from employees and front line service providers
 Database marketing research
 use customer information files
 “capture” behavior through data analysis

13. A Selection of Services Research Techniques (i)
Customer Complaint Solicitation
“Relationship” Surveys
Post-Transaction Surveys
Customer Focus Groups
Identify dissatisfied customers to attempt
recovery; identify most common categories
of service failure for remedial action
Obtain customer feedback while service
experience is still fresh; act on feedback quickly if
negative patterns develop
Use as input for quantitative surveys; provide
a forum for customers to suggest service-
improvement ideas
Assess company’s service performance compared
to competitors; identify service-improvement
priorities; track service improvement over time
Primary Research Objective Type of Research

14. Future Expectations Research
To forecast future expectations of
customers to develop and test new service
ideas
Determine the reasons why
customers defect
Measure internal service quality; identify
employee perceived obstacles to
improve service; Track employee morale
and attitudes
Measure individual employee service
behaviors for use in coaching, training,
performance evaluation, recognition and
rewards; Identify systemic strengths and
weaknesses in service
Lost Customer Research.
Employee Surveys.
“Mystery Shopping” of
Service Providers.
A Selection of Services Research Techniques (ii)

15. Tracking of Customer Expectations and
Perceptions of Service Reliability

16. Service Quality Perceptions
Relative to Zones of Tolerance

17. Computer Manufacturer
10
8
6
4
2
0 Reliability Responsiveness Assurance Empathy Tangibles
O
O O O
O
= Zone of Tolerance = S.Q. Perception
O
Service Quality Perceptions
Relative to Zones of Tolerance

18. Importance/Performance Matrix

19. Critical Service Encounters Research
 Goal:
 understanding actual events and behaviors that cause
customer dis/satisfaction in service encounters
 Method:
 Critical Incident Technique
 Data:
 stories from customers and employees
 Output:
 identification of themes underlying satisfaction and
dissatisfaction with service encounters

20. Sample Questions for Critical Incidents
Technique Study
 Think of a time when, as a customer, you had a particularly
satisfying (dissatisfying) interaction with an employee of X.
 When did the incident happen?
 What specific circumstances led up to this situation?
 Exactly what was said and done?
 What resulted that made you feel the interaction was
satisfying (dissatisfying)?

21. McDonald’s Creates Health-Conscious Panel to
Do Research and Pass it On
 Mom's Quality Consultants at
McDonalds
 Women, especially moms, tend to get
information and form opinions by talking
with others
 Selected 6 moms to bring “fully inside
the company”—to visit restaurants,
processing plants, orchards, and test
kitchens
 Will keep an online journal for 3 months

22. Best Buy’s Customer Centric “Lab” Stores
 Soccer mom:
 These stores feature brightly colored signage, play areas for children, educational toys, and
in-wall appliance displays, and provide personal shopping assistants.
 Swinging single:
 These stores place greater emphasis on higher-end and more cutting edge consumer
electronics, and feature separate rooms with full home entertainment vignettes and
enhanced A/V assistance.
 Cherry picker:
 Aimed at technophiles on a budget, these stores offer the most promotions and incentives,
and the best financing packages.
 Gadgeteer:
 Geared toward teens and twenty-some things, these stores emphasize cell phones, music
and movies, home theater, gaming, and mobile audio.
 Small business:
 Signed "Best Buy for Business," these stores have an expanded computer section and Geek
Squad presence, plus central help islands staffed by associates wearing blue collared (vs.
knitted golf) shirts.

23. 1. Complaint Solicitation-
Good service organizations take complaints seriously. Not only do they listen to
complaints- they also seek complaints as communications about what can be done to
improve their service and their service employees .
2. Critical Incidents Studies or techniques (CIT)-
A qualitative interview procedure in which customers are asked to provide verbatim
stories about satisfying and dissatisfying service encounters they have experienced

24. 3. Requirements Research-
It involves identifying the benefits and attributes that customers expect in a service. This
type of a research is very basic and essential because it determines the type of questions
that will be asked in surveys and ultimately the improvements that will be attempted by
the firm. e.g.
4. structured brainstorming
– a technique developed by researchers in IBM’s advance business systems unit. In this
technique a sample of customers and potential customers is assembled .A facilitator leads
the group through a series of exercises on creativity and then asks the customers to
describe the ideal service.
Another approach is to examine existing research in similar service industry

25. 5. Trailer calls or post transaction Survey-
Customers are asked a short list of questions immediately after a particular
transaction ( hence the name trailer calls)about their satisfaction with the transaction
and contact personnel with whom they interacted. Because the surveys are
administered continuously to a broad spectrum of customers , they are more effective
than compliant solicitation ( Where the information comes only from dissatisfied
customers). e.g. Rent-a- car
This method also serves as an incentive for employees to provide better services
because they understand how they are being evaluated.

26. 6. Service Expectation Meetings and Reviews-
It is conducted generally in B2Bsituations where large accounts are involved ,in this
method the senior members of the account team meet the customers and listen to their
expectations regarding the service. It is done usually at a specified time in a year and
then a follow up is done so as to determine whether the expectations were fulfilled.
After getting the inputs the account team members prepare a plan and discuss the plan
with the customer.

27. Process checkpoint evaluations-
When services are provided over a long period (e.g. consulting ,construction and
architecture) and there are not obvious ways or times to collect customer information.
Waiting until the entire project is complete is undesirable because during the delivery of
the service unresolvable problems could have occurred. In these situations , the smart
service provider defines a process for delivering the servicesand then structures the
feedback around the process, checking in at frequent points to ensure that the clients
expectations are being met.

28. Mystery shopping-
In this form of research , which is unique to services. Companies hire outside research
organizations to send people in to service establishments and experience the service as if
they were the customers.
These “Mystery Shoppers” are trained in the criteria important to customers of the
establishment . They deliver objective assessments about service performances by
completing questionnaires about service standards. Questionnaires contain items that
represent important quality or service issues to customers.
Mystery shoppers keep the employees on their toes because they know they may be
evaluated at anytime.
Mystery shopping can be a very effective way of reinforcing service standards

29. 7. Customer panels-
These are on going groups of customers assembled to provide attitudes and perceptions about a
service over time. They offer a company regular and timely customer information- virtually a pulse
on the market. Firms can use customer panels to represent large segments of end customers.
Customer panels are used in the entertainment industry to screen movies before they are released
to the public.
8. Lost customer research –
This type of research involves deliberately seeking customers who have dropped the company's
service to inquire about their reasons for leaving .Some lost customer research is similar to exit
interviews with employees in that it asks open – ended in-depth questions to explore the reasons
for defection and the particular events that lead to dissatisfaction.
One benefit of this type of research is that it identifies failure points and common problems in the
service and can help establish a early warning system for future

30. Future expectations research-
It is new and includes different types.
First,
features research involves environmental scanning and querying of customers about
desirable features of possible services .
Second,
lead user research brings in customers who are opinion leaders/innovators and ask
them what requirements are not currently being met by existing services

31. Objective of upward communication
 Gaining firsthand knowledge about
customers
 Improving internal service quality
 Gaining firsthand knowledge of
employees
 Obtaining ideas for service improvement
UPWARD COMMUNICATION
Research for upward communication
 Executive visits to customers
 Executive or management listening to
customers
 Research on intermediate customers
 Research on internal customers

32. ELEMENTS IN AN EFFECTIVE SERVICES
MARKETING RESEARCH PROGRAMME
 A good services marketing research programme includes
multiple types of research studies.
 The composite of studies and types of research will differ by
company, and the particular portfolio for any company will
match company resources and the particular services marketing
issues being addressed.
 All service organisations require a rich, multifaceted flow of
information to operate successfully.

33. Thank- you