CONSUMER BEHAVIOR IN

SERVICES
SERVICE MARKETING

CONSUMER NEEDS & EXPECTATIONS

Customers buy goods and

services to met specific needs,
and they evaluate the outcomes
of their purchases based on what
they expect to receive.

When people feel a need, they

are motivated to take action to
fulfil it.

CONSUMER NEEDS & EXPECTATIONS

Customer expectations embrace several different elements, including desired service, adequate
service, predicted service, and a zone of tolerance that falls between the desired and
adequate service levels.
Desired and adequate service levels- Desired service is the type of service customers hope to
receive. It is a wished-for level of service-a combination of what customers believe can be and
should be delivered in the context of their personal needs. However, most customers are
realistic and understand that companies cant always deliver the level of service they would
prefer; hence, they also have a threshold level of expectations, termed adequate service,
which is defined as the minimum level of service customers will accept without being
dissatisfied.
Predicted service -The level of service customers actually anticipate receiving is known as
predicted service and directly affects how they define adequate service on any given occasion. If
good service is predicted, the adequate level will be higher than if poorer service is predicted.
Customers predictions of service may be situation specific.

Consumer Needs & Expectations

Zone of tolerance
The inherent nature of services makes consistent service
delivery difficult across employees in the same company
and even by the same service employee from one day to
another. The extent to which customers are willing to
accept this variation is called the zone of tolerance.
A performance that falls below the adequate service
level will cause frustration and dissatisfaction,
whereas one that exceeds the desired service level
will both please and surprise customers, creating
what is sometimes referred to as customer delight.
Another way of looking at the zone of tolerance is to think of
it as the range of service within which customers dont pay
explicit attention to service performance. By contract, when
service falls outside the range, customers will react either
positively or negatively.

DECISION MAKING ROLES

In the buying decision process, at times, other people also influence the buying decision and
these people have a definite role to play. In the purchase of any particular service, six distinct
roles are played. These are:
Initiator. The person who requests that something be purchased.
Gatekeeper. The person responsible for the flow of information to the buying center. This could be
the secretary or the receptionist that screens calls and prevents salespeople from accessing users
or deciders. By having control over information, the gatekeeper has a major impact on the
purchasing process.
Purchaser or buyer. The person who makes the actual purchase.
Decider. The person who decides on product requirements, suppliers, or both.
Approver. The person who authorizes the proposed actions of the decider or the buyer.
Influencer. The person who influences the buying decision but does not necessarily use the
product or the service. The influencer may assist in the preparation of product or service
specifications, provide vendor ideas, and suggest criteria for evaluating vendors.
User. The person in a company who uses a product or takes advantage of a service.

CONSUMER BUYING ROLES

User

Buyer

Initiator

Key
Family
Decision
Roles

Decider

Influencer

FACTORS INFLUENCING CONSUMER BEHAVIOR

1. Situational factors
The situational factors influencing the buying behaviour are- the influence of time pressure in
service and brand choice, the atmosphere of the service outlet, occasion of purchase,
etc. For example, if you are traveling, then demand for lodging and boarding will obviously be
there.
2. Socio-cultural factors
Buyers or consumers do not take buying decisions or the decision not to buy, in a vacuum. Rather,
they are strongly influenced by cultural and social factors.
3. Cultural factors -Children acquire from their environment a set of beliefs values and customs
which constitute culture. These beliefs, values and customs go deeper and deeper as a person
grows. Therefore, it is sometimes said that culture is learned as a part of social experience. The
various sub-categories within a culture can be identified based on religion, age, gender,
occupation, social class, geographical location, etc.

FACTORS INFLUENCING CONSUMER BEHAVIOR

4. Reference groups -There are certain groups to which people look to guide their
behaviour. These reference groups may guide the choice of a product but not
necessarily the brand. Peer group and peer pressure has generally been observed to
play an important role in the purchase of credit cards, cell phones, etc. The knowledge
of reference group behaviour helps in not only offering substitutes but also in pricing
and positioning them.
5. Family-The family is another major influence on consumer behaviour. Family
consumption behaviour, to a large extent, depends on the family life cycle. The stages
in family life cycle include bachelorhood, newly married, parenthood with
growing or grown up children, post-parenthood and dissolution. Knowledge of
these stages helps greatly in knowing the buying process. Often family members play a
significant role in the purchase of a particular service.

6. PSYCHOLOGICAL FACTORS
Perception-It is the process by which buyers select, organize and interpret information
into a meaningful impression in their minds. Perception is also selective when only a small
part is perceived out of the total of what is perceptible. Buyers perception of a particular service
greatly influences buying behaviour.
Attitude -An attitude is a learned predisposition to respond in a consistently favourable
or unfavourable manner with respect to a market offer (i.e., a brand, a particular shop or
retail outlet, an advertisement, etc.). Attitude is a dispositional term indicating that attitudes
manifest themselves in behaviour only under certain conditions. Knowing a buyers attitude
towards a product without knowing the personal goals is not likely to give a clear prediction of his
behaviour.
Motivation - Motivation is the driving force within individuals that compels them to
action. This driving force is subconscious and the outcome of certain unfulfilled needs. Needs are
basically of two types- first, the innate needs are those needs with which an individual is born and
they are mainly physiological. They include all the factors required to sustain physical life e.g.,
food, water, shelter, clothing, etc. Secondly, the acquired needs are those which a person
acquires as he/she grows and these needs are mainly psychological, like love, fear, esteem,

7. PERSONAL FACTORS
Personality- Personality can be described as the psychological characteristics that determine
how an individual will react to his or her environment .
Life style - Life style as distinct from social class or personality is nothing but a persons
pattern of living and is generally expressed in his/ her activities, interests and opinions. Life style
suggests differences in the way people opt to spend on different products or services differently.
Demographic factors-Buyers demographic factors like age, gender, education, occupation, etc.,
also influence his/her purchase behaviour. In sum, knowledge on all such dimensions of the
consumer will help in understanding his needs and wants and also help in integrating all these
elements in service offer which the consumer wants.

A MODEL OF BUYER BEHAVIOUR

12

FACTORS INFLUENCING CONSUMER BEHAVIOUR

Psychological
Motivation
Perception
Learning (memory)
Beliefs & attitudes
Personality &
self-concept

Personal
Age & lifecycle stage
Occupation
Education
Economic situation

Marketing programs
Marketing objectives
Marketing strategy
Marketing mix
Environmental influences
Economic
Technological
Political

Social
Household type
Reference groups
Roles & status

Consumer
BUYER DECISION
PROCESS
Experiences
Lifestyle

Cultural
Culture
Subculture
Social Class

Buyers responses
Product service &
category selection
Brand selection
Reseller selection
Purchase timing &
repurchase intervals
Purchase amount

13

TYPES OF BUYING DECISIONS

High
Involvement

Low
Involvement

Significant
differences
between
brands

Complex
Buying
Behaviour

VarietySeeking
Behaviour

Few
differences
between
brands

DissonanceReducing Buying
Behaviour

Habitual
Buying
Behaviour

14

1. Complex buying behavior. This type of behavior involves a high degree of consumer
involvement in the buying process with the consumer seeing a great difference among brand
choices. The example of our consumer buying a car is an example of complex buying behavior.
2. Habitual buying behavior A typical consumer's involvement in the buying process is low
because the consumer doesn't see much difference between available brands in habitual buying
behavior. The purchase of a food commodity such as a sack of flour or sugar is a good example.
3. Dissonance-reducing buying behavior : Here, the consumer will have a high level of
involvement in the purchase but perceives very few differences among product choices. A classic
example is a parent buying a child a toy such as a stuffed teddy bear. While the child is deeply
involved in making the toy purchase, the frustrated parent doesn't see any real difference between
the stuffed bears on the shelf. Keep in mind that there may be differences, but the parent doesn't
perceive them. In order to end his frustration, the parent will just pick one based on price,
convenience, or random chance, thus ending the dissonance or discomfort in making a frustrating
decision.
4. Variety-seeking behavior. In this type of consumer behavior, there is a low degree of consumer
involvement in the purchasing process but a high degree of differences between brands. An example
of may be microbrew beer, where a consumer just picks a different microbrew each week for the
variety.

HOW CUSTOMERS EVALUATE SERVICE

PERFORMANCES
Its Difficult to Evaluate Services in comparison to products, as in case of products you have the
option to return the product if you are not satisfied with the product but in case of services you
dont have any such options.
One of the basic differences between goods and services is that services are harder for
customers to evaluate. All products can be placed on a continuum ranging from easy to
evaluate to difficult to evaluate depending on whether they are high in search attributes,
experiential attributes, or credence attributes. These three attribute categories provide a useful
framework for understanding how consumers evaluate different types of market offerings.
Search attributes- Physical goods tend to emphasize those attributes that allow customers to
evaluate a product before purchasing it. Features such as style, color , texture, taste, and sound
allow prospective consumers to try out, taste-test, or test-drive the product prior to purchase. These
tangible attributes help customers understand and evaluate what they will get in exchange for their
money and reduces the sense of uncertainty or risk associated with the purchase occasion. Goods
such as clothing, furniture, cars, electronic equipment, and foods are high in search
attributes.

CONTINUUM OF EVALUATION FOR DIFFERENT TYPES

OF PRODUCTS
Most
Services

Most
Goods
Easy to evaluate

High in search
qualities

Medical diagnosis

Auto repair

Root canals

Legal services

Television repair

Child care

Haircuts

Vacations

Restaurant meals

Automobiles

Houses

Furniture

Jewelry

Clothing

Difficult to evaluate

High in experience High in credence

qualities
qualities

Experience attributes -These are properties that cant be evaluated prior to purchase.
Customers must experience these features to know what they are getting. Holidays, live
entertainment performances, sporting events, and restaurants fall into this category.
For Example , you probably walked into the theatre with high expectations, you would have felt
disappointed after viewing the film if it did not live up to your expectations. Different people may
interpret or respond to the same stimuli in different ways.
Credence attributes- Product characteristics that customers find impossible to evaluate
confidently even after purchase and consumption are known as credence attributes
because the customer is forced to trust that certain benefits have been delivered even though it
may be hard to document them. For example, relatively few people possess enough knowledge
about financial markets to assess whether their stock broker got the best possible returns on their
invested funds. Patients cant usually evaluate how well their dentists have performed complex
dental procedures. And most college students must simply have faith that their professors are
providing them with a worthwhile educational experience

SERVICE DECISION MAKING PROCESS

Consumer decision-making process have Five main categories:
1.
2.
3.
4.

Need Recognition
Information Search
Evaluation of Service Alternatives
Service Purchase

Need Recognition : The Process of buying a Service

begins with the recognition that a need or want exists ,
Based on Maslow's Hierarchy of needs services are
capable of satisfying from lower level needs to higher
level needs, however they become increasingly
important for higher level social , ego , and selfactualization needs.
1. Physiological needs : Biological Needs such as food,
water & sleep (Restaurants)
2. Safety & Security Needs : Includes Shelter ,
Protection & Security (Real Estate)
3. Social Needs : Affection, Friendship & Acceptance
(Social Networking)
4. Ego Needs : Prestige, Success, Accomplishment , &
Self- Esteem (Personal Services Such as Spa, Plastic
Surgery)
5. Self Actualization : Involves Self- Fulfillment &

Use
of
personal
&
Non
Personal
resources- Consumers obtain information
about products and services from personal
sources (e.g., friends or experts) and from
non-personal sources (e.g., mass or
selective media). When purchasing goods
consumers make generous use of both
personal and non-personal sources because
both effectively convey information about
search qualities. When purchasing services,
on the other hand, consumers seek and
rely to a greater extent on personal
sources.

Information search
Perceived risk -While some degree of perceived
risk
probably
accompanies
all
purchase
transactions, more risk would appear to be
involved in the purchase of services than in he
purchase of goods because services are intangible,
non-standardized, and usually sold without
guarantees or warranties.
First, the intangible nature of services and
their high level of experience qualities imply
that services generally must be selected on
the basis of less pre-purchase information
than is the case for products. Second, because
services are non-standardized, there will always be
uncertainty about the outcome and consequences
each time a service is purchased. Third, service
purchases may involve more perceived risk than
product purchases because, with few exceptions,
services are not accompanies by warranties or
guarantees. The dissatisfied service purchaser can
rarely return a service; he or she has already

Evaluation of service alternatives

Smaller Evoked set - The evoked set refers to the number
of alternatives (group of products) a consumer considers
acceptable options.
Evoked set is likely to be smaller with services than with goods. One
reason involves differences in retailing between goods and services.
To purchase goods, consumers generally shop in retail stores that
display competing products in close proximity, clearly demonstrating
the possible alternatives. To purchase services, on the other hand,
the consumer visits an establishment (e.g., a bank, a dry cleaner, or
a hair salon) that almost always offers only a single brand for sale.
A second reason for the smaller evoked set is that consumers are
unlikely to find more than one or two businesses providing the same
services in a given geographic area, whereas they may find
numerous retail stores carrying the identical manufacturers product.
A third reason for a smaller evoked set is the difficulty of obtaining
adequate pre-purchase information about services.

Emotion and mood

Emotion and mood are feeling states that influence
peoples (and therefore customers) perceptions
and evaluations of their experiences. Moods are
distinguished from emotions in that moods
refer to transient feeling states that occur at
specific times and in specific situations,
whereas emotions are more intense, stable,
and pervasive.
Because services are experiences, moods and emotions are critical factors that shape the perceived
effectiveness of service encounters. If a service customer is in a bad mood when he enters a service
establishment, service provision will likely be interpreted more negatively than if he were in a buoyant,
positive mood. Similarly, if a service provider is irritable or sullen; his interaction with customers will
likely be colored by that mood.
Furthermore, when another customer in a service establishment is cranky or frustrated, whether from
problems with the service or from existing emotions unrelated to the service, his or her mood affects
the provisions of service for all customers who sense the negative mood. In sum, any service
characterized by human interaction is strongly dependent on the moods and emotions of the service
provider, the service customer and other customers receiving the service at the same time.

Service purchase and consumption

Service provision as drama- Researchers and
managers of service businesses have compared service
provision with drama, observing that both aim to
create and maintain a desirable impression before
an audience, and both recognize that the way to
accomplish this is by carefully managing the actors and
the physical setting of their behaviour. In fact the service
marketer must play many drama-related roles (including
director, choreographer, and writer) to be sure the
performances of the actors are pleasing to the audience.
The skill of the service actors in performing their
routines, the way they appear, and their commitment to
the show are all pivotal to service delivery. While
service actors are present in most service performances,
their importance increases when the degree of direct
personal contact increases (such as in a hospital, resort,
or restaurant), when the services involve repeat contact,
and when the contact personnel as actors have discretion
in determining the nature of the service and how it is
delivered (as in education, medical services, and legal

Services roles and scripts -If we think of service performances as drama, we can view each
players as having a role to perform. Roles have been defined as combinations of social cues
that guide ad direct behaviour in a given setting. The success of any service performance
depends in part on how well the role set or players- both service employees and customers- act
out their roles. Service employees need to perform their roles according to expectations of the
customer; if they do not, the customer may be frustrated and disappointed.
One of the factors that most influences the effectiveness of role performance is a script- a
coherent sequence of events expected by the individual, involving them either as a
participant or as an observer. Service scripts consist of a set of ordered actions, actors, and
objects that, through repeated involvement, define what the customer expects. Conformance to
scripts is satisfying to the customer, while deviations from the script lead to confusion and
dissatisfaction.

Post purchase evaluation

Attribution of dissatisfaction - When consumers are disappointed
with purchases-because the products did not fulfill the intended needs,
did not perform satisfactorily, or were not worth their price- they may
attribute their dissatisfaction to a number of different sources, among
them the producers, the retailers, or themselves. Because consumers
participate to a greater extent in the definition and production
of services, they may feel more responsible for their
dissatisfaction when they purchase services than when they
purchase goods. As an example, consider a female consumer
purchasing a haircut; receiving the cut the desires depends in part upon
her clear specifications of her needs to the stylist. If disappointed, she
may blame either the stylist (for lack of skill) or herself (for choosing the
wrong stylist or for not communicating her own needs clearly).
Innovation diffusion- The rate of diffusion of an innovation depends on consumers
perceptions of the innovation with regard to five characteristics: relative advantage,
compatibility, communicability, divisibility, and complexity. An offering that has a
relative advantage over existing or competing products; that is compatible with existing
norms, values, and behaviours; that is communicable; and that is divisible (i.e., that can be
tried or tested on a limited basis) diffuses more quickly than others. An offering that is
complex, that is, difficult to understand or use, diffuses more slowly than others.

Brand loyalty
The degree to which consumers are committed to
particular brands of goods or services depends on a
number of factors: the cost of changing brands
(switching cost), the availability of substitutes, the
perceived risk associated with the purchase, and the
degree to which they have obtained satisfaction in the past.
Because it may be more costly to change brands of
services, because they may have more difficulty being
aware of the availability of substitutes, and because higher
risks may accompany services, consumers are more likely
to remain customers of particular companies with services
than with goods.
Greater search costs and monetary costs may be
involved in changing brands of services than in
changing brands of goods. Because of the difficulty of
obtaining information about services, consumers may be
unaware of alternatives or substitutes for their brands, or
may be uncertain about the ability of alternatives to
increase satisfaction over present brands

PURCHASE PROCESS FOR

SERVICES
This process has three separate stages-the pre-purchase stage, the service encounter stage, and
post-purchase stage.

Pre-purchase stage
The decision to buy and use a service is made in the prepurchase stage. Individual needs and expectations are
very important here because they influence what
alternatives customers will consider. If the purchase is
routine and relatively low risk, customers may move
quickly to selecting and using a specific service provider.
But when more is at stake or a service is about to be used
for the first time, they may conduct an intensive
information search. The next step is to identify potential
suppliers and then weigh the benefits and risks of each
option before making a final decision.

Service encounter stage

After deciding to purchase a specific service, customers
experience one or more contacts with their chosen
service provider. Contacts may take the form of
personal exchanges between customers and service
employees or impersonal interactions with machines or
computers.
In
high-contact
services,
such
as
restaurants,
health
care,
hotels,
and
public
transportation, customers may experience a variety of
elements during service delivery, each of which has the
potential to provide clues to service quality.
Service environments include all of the tangible
characteristics to which customers are exposed. The
appearance of building exteriors and interiors; the
nature of furnishings and equipment; the presence or
absence of dirt, odor, or noise; and the appearance and
behaviour of other customers can all serve to shape
expectations and perceptions of service quality.

Post-purchase stage
During the post-purchase stage, customers continue a
process they began in the service encounter stageevaluating service quality and their satisfaction or
dissatisfaction with the
service experience. The
outcome of this process will affect their future intentions,
such as whether to remain loyal to the provider that
delivered service and whether to pass on positive or
negative recommendations to family members and other
associates.
Customers evaluate service quality by comparing what
they expected with what they perceive they received. If
their expectations are met or exceeded, they believe
they have received high-quality service. If the pricequality relationship is acceptable and other situational
and personal factors are positive, then these customers
are likely to be satisfied. As a result, they are more likely
to make repeat purchases and become loyal customers.
However, if the service experience does not meet
customers expectations, they may complain about poor
service quality, suffer in silence, or switch providers in
the future.

Thank You