MRKT 55030 - Week 4 - Customer Expectations and Perceptions of Service Offerings

8/13/2019 MRKT 55030 - Week 4 - Customer Expectations and Perceptions of Service Offerings

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MRKT 55030: SERVICES

MARKETING

WEEK 4: Customer Expectations andPerceptions of Service Offerings

Dr. Okey Peter ONYIA


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TODAYS OUTLINE

The Customer (Service Consumer) Defined

Service Consumer BehaviorCustomer Expectations of Service

Types of Customer Expectations:

Desired Service Adequate Service

Zone of Tolerance

Customer Perceptions:

Perception of Risks Associated with Service

Perception of Service Performance and Service Quality

Customer Satisfaction

Next lecture pre-work.


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Intended Learning Outcomes (ILOs):

At the end of this session, you should be able to:

Demonstration a good understanding of ServiceConsumers Behavior.

Discuss the three main types of customer serviceexpectations

Evaluate customer perceptions of the risks associatedwith service purchase .

Analyze customers perceptions of serviceperformance and service quality .

Assess and discuss customer satisfaction and factorsthat influence customer satisfaction .


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The customer

The Service Customer/Consumeris . . .

anyone who receives, buys, or uses a

companys services , including: External customers service buyers/usersfrom outside the organization; business

customers, suppliers, partners, end consumers. Internal customers service buyers/usersinside the organization; e.g., other departments,fellow employees, etc.


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Need Arousal

Customer Satisfaction

Customer Loyalty

Information Search

Service Encounter

Alternatives Evaluation

Customer Perception

(of performance/quality)

Customer Expectations(of the Service)

Service Consumer Behavior


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Customer Expectationsof Services

Customer expectations - are customers desires and beliefs about

what the standards of service deliveredby the marketer should be.

- serve as the standards and reference pointsagainst which the service performance is judged.

- must be well-known by service marketersas their first and most critical step in deliveringquality service.

- are discovered through research of existingand potential customers.


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Levels of Customer Expectations

The levels of customer expectations canvary widely depending on the reference pointheld by the customer at a given point in time; i.e.,depending on the customers prevalentcircumstance at a given time.

Based on his/her situation, a customersexpectation may be high or low for a

specific service or for a specific service provider.

Also, customers hold different types ofperformance expectations for different types

of service marketers.


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Possible Levels of CustomerExpectations

S o u r c e : Zeithaml et al. (2013)


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Types ofCustomer Expectations

The Gaps Modelof Service Quality


Delights

Musts

Desirables


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Types of Customer Expectations

1. Desired Service Expectation is - the highest level of service the customer

desires and hopes to receive .

- the customers wished for level of serviceperformance.- a blend of what the customer believes the

service performance can be and shouldbe .

The customer will be delighted and mostsatisfied if the service performance meets or

surpasses this level of expectation.


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2. Zone of Tolerance Expectationis

- the customers recognition that services areheterogeneous , i.e., that performance may vary

across providers; across employees of the sameprovider; and even with the same service employeeat different times.

- the extent to which customers recognize and arewilling to accept this variation in serviceperformance .

Any level within this zone is desirable and thecustomer will be satisfied if the service

performance meets any level within the zone.


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3. Adequate Service Expectationis - the lowest level of service the customer will be

willing to receive with little or no complaint.

- the customers lowest level of tolerance .- The most minimum of what the customer believes

the service performance should be .

The customer will be barely satisfied if the service isperformed at this level of expectation.

Below this level, the customer will be dissatisfied orreject the service and seek alternative service

elsewhere.


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The Zone of Tolerance The various types of expectationsbetween the range of desired andadequate service

can be wide or narrow in range

can change over time

can vary among individuals

may vary with the type ofproduct/service being offered


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Factors That InfluenceDesired Service



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Factors That InfluenceAdequate Service



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Factors That InfluenceDesired and Predicted Service



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Group Discussions: In your small groups, read and discuss the following

articles in the textbook: Global Feature: Global Outsourcing of Personal Services . What are

customers expectations (Pages 54-55) . Technology Spotlight: Customer Expectations of Airport Services

Using Technology (Pages 60-61) .

Then, select a real service company of your choice, andassess how the company deals with its customer-

expectations by answering the following questions: What does this service marketer do if its customersexpectations are unrealistic? Should the company try to delight its customers? Why/how? How can this company exceed its customers serviceexpectations? Do customers service expectations continually escalate?

How can the company stay ahead of competition in meetingcustomer expectations? (20 minutes)


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Perception is the identification,configuration , and interpretation of sensoryinformation from an experience, in order to

show understanding and form an opinion aboutthe experience.

In the case of Customer Perception , itenables and reflects customers feelings ,observations , and view-points about therisks associated with a service or the servicethey have just encountered or experienced.

Customer Perceptionsof Services


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Risks Perceived in Purchasingand Using Services

unctional unsatisfactory performance outcomes

inancial monetary loss; unexpected extra costs

Temporal wasted time and delays leading toother problems.

Physical personal injury; damage to possessions

Psychological fears and negative emotions

Social how others may think and react to outcome

Sensory unwanted impact on any of the fivesenses


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How Consumers Might HandlePerceived Risks in Service Encounters

Seek information from respected personal sources

Compare alternative service offerings and search forindependent reviews and ratings via the Internet

Rely and patronize only firms with good reputation

Seek and ask for guarantees and warranties

Visit service facilities, go for trials, and examinetangible cues or other physical evidence beforepurchase.

Ask knowledgeable employees about competingservices


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Strategic Management of(and Responses to)

Customer Perceptions of Risk

Free trial (forservices with

high experienceattributes)

Advertise

(It helps tovisualize offer) Display

credentials

Use evidence

management(e.g., furnishing,equipment, etc.)

Offerguarantees

Encouragevisit to servicefacilitiesGive customers

online access toorder status


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Customer Perceptions of ServiceQuality and Customer Satisfaction



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Customer Satisfaction withService Experience

Satisfaction is

A customer's judgmental attitude and state of mindabout a service encounter or series of service

interactions that he or she has just experienced.Customers usually have expectations of products andservices prior to consumption; encounter theproduct/service performance ; and then compare it to

their expectations .The state of mind that results from the outcome of acustomers comparison of service performance tohis/her expectations is his/her satisfaction or

dissatisfaction with the service.


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Customer Satisfaction withService Experience

Satisfaction judgments are based on the comparison of serviceperformance and customer expectation after

the service encounter.

There are 3 judgmental states of mind that may resultfrom the comparison:

Positive service disconfirmation - when the serviceperformance is better than the customers expectation.Service confirmation - when the serviceperformance is the same as the customers expectation.Negative service disconfirmation - when theservice performance is worse than the customersexpectation.


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Product qualityService qualityPriceSpecific product or service featuresConsumer emotions

Attributions for service success or failurePerceptions of equity or fairness

Other consumers, family members,friends, and co-workersPersonal factors

Situational factors

Factors InfluencingCustomer Satisfaction

d


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In your small groups, read and discussCase 1 in the textbook, titled:

Zappos.com 2009: Clothing, Customer Service, and

Company Culture

( Pages 495 - 514 ).

Discuss the case and generate 1 customer-expectation and 1 customer-satisfaction question from

the case for the other groups.

Also, be ready to answer the 2 questions from theother groups too.

(25 minutes)

Case Study GroupDiscussions:

American Customer Satisfaction Index


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http://www.theacsi.org/acsi-results/benchmarks-by-industry

American Customer Satisfaction Index(ACSI) and Market Value Added
http://www.theacsi.org/acsi-results/benchmarks-by-industryhttp://www.theacsi.org/acsi-results/benchmarks-by-industryhttp://www.theacsi.org/acsi-results/benchmarks-by-industryhttp://www.theacsi.org/acsi-results/benchmarks-by-industryhttp://www.theacsi.org/acsi-results/benchmarks-by-industryhttp://www.theacsi.org/acsi-results/benchmarks-by-industryhttp://www.theacsi.org/acsi-results/benchmarks-by-industryhttp://www.theacsi.org/acsi-results/benchmarks-by-industry


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Outcomes of Customer Satisfactionand Dissatisfaction

Satisfaction:Increased customerloyalty

Positive word-of-mouth communication

Increased marketshare

Higher revenues

Increased returns on

investments

Dissatisfaction:Lower customerloyalty

Negative word-of-mouth communication

Lower market share

Lower revenuesLower returns oninvestments.

d


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Competitive Industries CustomerSatisfaction and Loyalty Relationship:



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Next class pre-work:

Topic: Delivering and Performing Service the Roles of the additional 3Psof Marketing (People, Processand Physical Evidence) inService Offerings.

Read up all of: chapters 9, 10, and 13 of the

textbook.

MRKT 55030 - Week 4 - Customer Expectations and Perceptions of Service Offerings

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