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Chapter 2
Consumer Behavior in
Service Encounters
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Where Does the Customer Fit in aService Organization?
Consumers rarely involved in manufacture of goods butoften participate in service creation and delivery
Challenge for service marketers is to understand howcustomers interact with service operations
Flowcharting clarifies how customer involvement in serviceencounters varies with type of process - People pro cessin g (e.g., motel stay): customer is physically involved
throughout entire process
Poss ession p roc essing (e.g., DVD repair): involvement may be limited to
drop off of physical item/description of problem and subsequent pick up Mental st imulus proc essing (e.g. , weather forecast): involvement is
mental, not physical; here customer simply receives output and acts on it
Inform at ion p rocessin g (e.g. , health ins urance): involvement is mental -specify information upfront and later receive documentation of coverage
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High-Contact and Low-Contact Services
High Contact Services
Customers visit service facility and remainthroughoutservice 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 arms length through electronic orphysical distribution channels
New technologies (e.g. Web) help reduce contact levels
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Levels of Customer Contact with ServiceOrganizations
Emphasizes encounters
with service personnel
Emphasizes encounters
with equipment
High
Low
ManagementConsulting
CarRepair
InsuranceMotel
FastFood
NursingHome
AirlineTravel(Econ.)
CableTV
TelephoneBanking
HairCut
GoodRestaurant
4-StarHotel
DryCleaning
RetailBanking
Mail Based Repairs
Internet-basedServices
Movie Theater
Internet Banking
Subway
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Managing Service Encounters--1
Service encounter:A period of time during which customersinteract directly with a service
Moments of truth:Definingpoints in service delivery wherecustomers interact with employees or equipment
Critical incidents: specific encounters that result inespecially satisfying/dissatisfying outcomes for eithercustomers or service employees
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Managing Service Encounters--2
Service success often rests on performance of juniorcontact personnel
Must train, coach, role model desired behavior
Thoughtless or badly behaved customers can causeproblems for service personnel (and other customers)
Must educate customers, clarify what is expected, managebehavior
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Perceived Risks inPurchasing and Using Services
Funct ionalunsatisfactory performance outcomes
Financialmonetary loss, unexpected extra costs
Temporalwasted time, delays lead to problems
Physicalpersonal injury, damage to possessions
Psychologicalfears and negative emotions
Socialhow others may think and react
Sensoryunwanted impacts to any of five senses
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Factors that InfluenceCustomer Expectations of Services
Predicted Service
Explicit & ImplicitService Promises
Word-of-Mouth
Past ExperienceDesired Service
ZONEOF
TOLERANCE
Adequate Service
Personal Needs
Beliefs aboutWhat Is Possible
Perceived ServiceAlterations
Situational Factors
Source: Adapted from Zeithaml, Parasuraman & Berry
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Components of Customer Expectations
Desired Service Level: wished-for level of service qualitythat customer believes can and should be delivered
Adequate Service Level: minimum acceptable level ofservice
Predicted Service Level: service level that customerbelieves firm will actually deliver
Zone of Tolerance:range within which customers arewilling to accept variations in service delivery
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Intangible Attributes, Variability, and QualityControl Problems Make Services Hard to Evaluate
Search attr ibutes Tangible characteristics that allowcustomers to evaluate a product before purchase
Experience attr ibu tes Characteristics that can beexperienced when actually using the service
Credence attr ibu tes Characteristics that are difficult toevaluate confidently even after consumption
Goods tend to be higher in search attributes, services tendto be higher in experience and credence attributes
Credence attributes force customers to trust that desiredbenefits have been delivered
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How Product Attributes AffectEase of Evaluation)
Source: Adapted from Zeithaml
Most Goods
High in searchattributes
High in experienceattributes
High in credenceattributes
Difficultto evaluate
Easyto evaluate
Most Services
Clothing
Chair
Motorvehicle
Foods
Restau
rantmeals
Law
nfertilizer
Haircut
Ente
rtainment
Comp
uterrepair
Legalservices
Complexsurgery
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Customer Satisfaction is Central to theMarketing Concept
Satisfaction defined as attitude-like judgment following aservice purchase or series of service interactions
Customers have expectations prior to consumption, observeservice performance, compare it to expectations
Satisfaction judgments are based on this comparison Positive disconfirmation if better than expected
Confirmation if same as expected
Negative disconfirmation if worse than expected
Satisfaction reflects perceived service quality, price/qualitytradeoffs, personal and situational factors
Research shows links between customer satisfaction and afirms financial performance
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Customer Delight:Going Beyond Satisfaction
Research shows that delight is a function of 3 components
Unexpectedly high levels of performance
Arousal (e.g., surprise, excitement)
Positive affect (e.g., pleasure, joy, or happiness)
Is it possible for customers to be delighted by verymundane services?
Progressive Insurance has found ways to positively surprisecustomers with customer-friendly innovations andextraordinary customer service
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A Service Business is a System ComprisingThree Overlapping Subsystems
Service Operations (front stage and backstage)Where inputs are processed and service elements created. Includes facilities, equipment, and personnel
Service Delivery (front stage)
Where final assembly of service elements takes placeand service is delivered to customers
Includes customer interactions with operations and othercustomers
Service Marketing (front stage)
Includes service delivery (as above) and all other contactsbetween service firm and customers
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Service Marketing System:(1) High Contact Service--e.g., Hotel
TheCustomer
TechnicalCore
Interior & ExteriorFacilitiesEquipment
Service People
OtherCustomers
OtherCustomers
AdvertisingSales CallsMarket ResearchSurveysBilling / StatementsMiscellaneous Mail,
Phone Calls, Faxes, etc.Random Exposure toFacilities / VehiclesChance Encounters
with Service PersonnelWord of Mouth
Service Operations System
Backstage(invisible) Front Stage(visible)
Service Delivery System Other Contact PointsService Marketing System
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Service Marketing System:(2) Low Contact Service--e.g., Credit Card
TechnicalCore
MailSelf ServiceEquipmentPhone, Fax,Web site etc.
TheCustomer
Service Operations SystemService Delivery System Other Contact Points
Backstage(invisible)
Front Stage(visible)
AdvertisingMarket ResearchSurveysRandom ExposuresFacilities, PersonnelWord of Mouth
Service Marketing System
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The Dramaturgy of Service Delivery
Service dramas unfold on a stage--settings may change asperformance unfolds
Many service dramas are tightly scripted, others improvised
Front-stage personnel are like members of a cast
Like actors, employees have roles, may wear specialcostumes, speak required lines, behave in specific ways
Support comes from a backstage production team
Customers are the audiencedepending on type ofperformance, may be passive or active
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Role and Script Theories
Role: A set of behavior patterns learned throughexperience and communication
Role congruence:In service encounters, employees and
customers must act out defined roles for good outcomes
Script:A sequence of behavior to be followed by employeesand customers during service delivery
Some scripts (e.g. teeth cleaning) are routinized, others flexible
Technology change may require a revised script
Managers should reexamine existing scripts to find ways to improvedelivery, increase productivity, enhance experiences