Understanding

Service Consumers
 Learning Objectives

 Understand the three-stage model

of service consumption.

 Use the multi-attribute model to

understand how consumers
evaluate and choose between
alternative service offerings.

 Learn why consumers often have

difficulties evaluating services,
especially those with many
experience and credence
attributes.
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 Learning Objectives

 Know the perceived risks

customers face in purchasing
services and the strategies firms
can use to reduce consumer risk
perceptions.

 Understand how customers form

service expectations and the
components of these expectations.

 Know the moment-of-truth

metaphor.
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 Learning Objectives

 Contrast how customers

experience and evaluate high-
versus low-contact services.

 Be familiar with the servuction

model and understand the
interactions that together create
the service experience.

 Obtain insights from viewing the

service encounter as a form of
theater.
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 Learning Objectives

 Know how role, script and perceived

control theories contribute to a better
understanding of service encounters.

 Describe how customers evaluate

services and what determines their
satisfaction.

 Understand service quality, its

dimensions and measurement, and
how quality relates to customer
loyalty.

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 Three Stage Model
Stages of Service Consumption Key Concepts
Awareness of need Need arousal
• Information search Evoked set
• Clarify needs Consideration set
• Explore solutions
• Identify alternative service products and suppliers
Pre-purchase Stage Evaluation of alternatives (solutions and suppliers) Multi-attribute model
• Review supplier information Search, experience, and credence attributes
(e.g. advertising, brochures, websites) Perceived risk
• Review information from third parties
(e.g. published reviews, ratings, comments on web, blogs,
complaints to public agencies, satisfaction ratings, awards)
• Discuss options with service personnel
• Get advice and feedback from third-party advisors and
other customers
Make decisions on service purchase and often make Formation of expectations: desired service level, predicted
reservations service level, adequate service level, zone of tolerance
Request service from a chosen supplier or initiate self- Moments of truth
service (payment may be upfront or billed later) Service encounters
Service Encounter

Servuction system
Service delivery by personnel or self-service Theater as a metaphor
Role and script theories
Stage

Perceived control theory

Evaluation of service performance Confirmation/ Disconfirmation of expectations

Dissatisfaction, satisfaction and delight
st-encounter

Future intentions Service Quality

Word-of-mouth
Stage

Repurchase
Loyalty 6
(#1 of The Three Stage
Model)

Pre-purchase Stage
Need Arousal
 Decision to buy or use a service is triggered by need arousal

 Triggers of need:

Unconscious minds (e.g., personal identity and aspirations)

Physical conditions (e.g., hunger )

External sources (e.g., a service firm’s marketing activities)

 Consumers are then motivated to find a solution for their need

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Information Search
 Need arousal leads to attempts to find a solution

 Evoked set – a set of products and brands that a consumer considers

during the decision-making process – that is derived from past
experiences or external sources

 Alternatives then need to be evaluated before a final decision is made

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 Evaluating Alternatives –
Service Attributes
 Search attributes help customers evaluate a product before
purchase
E.g., type of food, location, type of restaurant and price

 Experience attributes cannot be evaluated before purchase

The consumer will not know how much they will enjoy the food, the service, and the
atmosphere until the actual experience

 Credence attributes are those that customers find impossible

to evaluate confidently even after purchase and consumption
E.g., hygiene conditions of the kitchen and the healthiness of the cooking ingredients

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How Product Characteristics Affect Ease Of
Evaluation

Adapted from Valarie A. Zeithaml, “How Consumer Evaluation Processes Differ Between Goods and Services,” in J. H.
Donnelly and W. R. George, Marketing of Services (Chicago: American Marketing Association, 1981).
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Multi-Attribute Model
Current Dry Campus Dry New Dry Importance
Cleaner Cleaner Cleaner Weight
Quality of Dry 9 10 10 30%
Cleaning
Convenience of 10 8 9 25%
Location
Price 8 10 8 20%
Opening Hours 6 10 9 10%
Reliability of 2 9 9 5%
On-time Delivery
Friendliness of 2 8 8 5%
Staff
Design of Shop 2 7 8 5%
Total Score 7.7 9.2 9.0 100%

Table 2.1 Modeling Consumer Choice – Susan Munro’s

Multiattribute Model for Choosing a Dry Cleaner

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Perceived Risks of Purchasing and Using
Services

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How Might Consumers Handle Perceived
Risk?
 Seeking information from trusted and respected personal sources such as
family, friends and peers.

 Using the Internet to compare service offerings, to search for independent

reviews and ratings, and to explore discussions on social media.

 Relying on a firm that has a good reputation.

 Looking for guarantees and warranties.

 Visiting service facilities or trying aspects of the service before purchasing,

and examining tangible cues or other physical evidence.

 Asking knowledgeable employees about competing services to learn about

what to look out for when making this decision.

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Strategic Responses to Managing Customer
Perceptions of Risk (1 of 2)

 Encourage prospective customers to preview the service through

their company websites and videos.

 Encourage prospective customers to visit the service facilities

before purchase.

 Offer free trials suitable for services with high experience

attributes.

 For services with high credence qualities and high customer

involvement, advertising helps to communicate the benefits, usage
and how consumers can enjoy the best results.
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 Strategic Responses to Managing Customer
Perceptions of Risk (2 of 2)
 Display credentials

 Use evidence management, an organized approach where customers are

presented with coherent evidence of the company’s targeted image and
its value proposition

 Have visible safety procedures that build confidence and trust

 Give customers access to online information about the status of an order

or procedure.

 Offer service guarantees such as money-back guarantees and

performance warranties

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Factors Influencing Customer Expectations of Service

Adapted from Valarie A. Zeithaml, Leonard A. Berry, and A. Parasuraman (1993),

“The Nature and Determinants of Customer Expectations of Service,” Journal of the
Academy of Marketing Science, Vol. 21, No. 1, pp. 1–12.
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Components of Customer Expectations
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
• Acceptable range of variations in service delivery

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Purchase Decision

 Purchase Decision:
Possible alternatives are compared and evaluated, whereby
the best option is selected
Simple if perceived risks are low and alternatives are clear

Complex when trade-offs increase

 Trade-offs are often involved

 After making a decision, the consumer moves into the

service encounter stage 19
(#2 of The Three Stage
Model)

Service
Encounter Stage
Service Encounter Stage (2 of 2)
 Service encounter – a period of time during which a customer interacts directly with the service
provider

Might be brief or extend over a period of time (e.g., a phone call or visit to the hospital)

 Models and frameworks:

1.“Moments of Truth” – importance of managing touch points

2.High/low contact model – extent and nature of contact points

3.Servuction model – variations of interactions

4.Theater metaphor – “staging” service performances

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 Moments of Truth
[W]e could say that the perceived quality is realized
at the moment of truth, when the service provider
and the service customer confront one another in
the arena. At that moment they are very much on
their own… It is the skill, the motivation, and the
tools employed by the firm’s representative and the
expectations and behavior of the client which
together will create the service delivery process.

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Distinctions between High-Contact and Low-Contact
Services

 High-Contact Services  Low-Contact Services

Customers visit service facility and Little or no physical contact
remain throughout service delivery Contact usually at arm’s length
Active contact through electronic or physical

Includes most people-processing distribution channels

services Facilitated by new technologies

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The Servuction System (1 of 2)

Adapted and expanded from an original concept by Eric Langeard and Pierre Eiglier

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The Servuction System
 French researchers Pierre Eiglier and Eric Langeard were the first to conceptualize the service
business as a system that integrates marketing, operations, and customers.

 They coined the term servuction system (combining the terms “service” and “production”),
which is part of the service organization’s physical environment visible to and experienced by
customers.

 Customers interact with the service environment, service employees, and even other customers
present during the service encounter.

 Each type of interaction can create value (e.g., a pleasant environment, friendly and competent
employees, or other customers who are interesting to observe) or destroy value (e.g., another
customer blocking your view in a movie theater). Firms have to “engineer” all interactions to
make sure their customers get the service experience they came for. 25
The Servuction System (2 of 2)
THE SERVUCTION SYSTEM
CONSISTS OF:
• Technical core — where inputs are
processed and service elements created
• Service delivery system—where the final
“assembly” takes place and the product is
delivered to the customer.

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Theatrical Metaphor:
An Integrative Perspective

Service facilities Personnel

• Stage on which drama • Front stage personnel are like
unfolds members of a cast
• Backstage personnel are support
• This may change from one
production team
act to another

Roles Scripts
• Like actors, employees • Specifies the sequences of
have roles to play and behavior for customers and
behave in specific ways employees

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(#3 of The Three Stage
Model)

Post-Encounter
Stage
Post-Encounter Stage (2 of 2)

The last stage of service consumption is the

post-encounter stage which involves
consumers’ attitudinal and behavioral
responses to the service experience

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Customer Satisfaction
In the post-encounter stage, customers evaluate the service performance they have
experienced and compare it with their prior expectations.

Satisfaction is a judgment following a series of

consumer product interactions.

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Are Expectations Always the Right Comparison
Standard?

 Comparing performance to expectations works well

in reasonably competitive markets

 In uncompetitive markets or in situations in which

customers do not have free , there are risks to
defining customer satisfaction relative to their prior
expectations.

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How is Customer Delight Different from Satisfaction?
 Research shows that delight is a function of three components
Unexpectedly high levels of performance

Arousal (e.g., surprise, excitement)

Positive affect (e.g., pleasure, joy, or happiness)

 Achieving a customer’s delight requires focusing on what is currently

unexpected.

 Once a customer is delighted, it has a strong impact on a customer’s loyalty

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Customer Loyalty
 Loyalty is a customer’s willingness to continue patronizing a firm
over the long-term

 Customer loyalty extends beyond behavior and includes preference,

liking, and future intentions.

 Loyalty is an important outcome of satisfied customers who believe

that the firm delivers great service.

 The opposite of loyalty is defection, which is used to describe

customers who drop off a company's radar screen and transfer their
loyalty to another supplier

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Thank you

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