mkt 346: marketing of services dr. houston
DESCRIPTION
MKT 346: Marketing of Services Dr. Houston. Chapter 2: Consumer Behavior In a Services Context. Consumer Decision Making: The Three Stage Model. Pre- Purchase Stage. Service Encounter Stage. Post-Purchase Stage. Pre-Purchase Stage. Customers seek solutions to needs - PowerPoint PPT PresentationTRANSCRIPT
MKT 346: Marketing of ServicesDr. Houston
Chapter 2:Consumer BehaviorIn a Services Context
Consumer Decision Making: The Three Stage Model
Pre-
Purchase
Stage
Service
Encounter
Stage
Post-Purchase
Stage
Pre-Purchase Stage
Service Encounter Stage
Post-Purchase Stage
Pre-Purchase Stage
● Customers seek solutions to needs
● Uncertainty increases perceived risk
● Service providers must: Develop risk reduction
strategies
Understand service expectations
Service purchase decision process
Pre-Purchase Stage
Pre-Purchase Stage:Need Awareness
●We recognize that we have a need
●Possible sources of needs:
People’s unconscious mindsPhysical conditionsExternal sources
●Need triggers search for a service solution
Pre-Purchase Stage:Information Search
●A need triggers a search for a solution
●Search ends with selection of evoked set
Pre-Purchase Stage:Evaluation of Alternatives
●Consumer evaluates alternatives based upon:
Service attributes
Perceived risks
Service expectations
Pre-Purchase Phase:Evaluation of Alternatives
Service Attributes
● Search attributes
● Experience attributes
● Credence attributes
Pre-Purchase Stage:Evaluation of Alternatives
Perceived Risks
● Functional
● Financial
● Temporal
● Physical
● Psychological
● Social
● Sensory
Risk Reduction Strategies Used By Consumers
● Patronize firms with good service
● Visit service locations before purchase
● Look for guarantees and warranties
● Seek personal sources of information
● Seek impersonal sources of information
Risk Reduction StrategiesUsed By Service Providers
● Certification● Quality control standards● Safety standards● Marketing communications● Branding● Trial purchases and sampling● Promotional incentives● Guarantees● Instruction
Pre-Purchase Stage Evaluation of Alternatives
Service Expectations – Factors Influencing Consumer Expectations of Service (Fig. 2.15)
Source: Adapted from Valarie A. Zeithaml, Leonard A. Berry, and A. Parasuraman, “The Nature and Determinants of Customer Expectations of Service,” Journal of the Academy of Marketing Science 21, no. 1 (1993): 1-12
Pre-Purchase Stage:Evaluation of Alternatives
●Consumer evaluates alternatives based upon:
Service attributes
Perceived risks
Service expectations
●Consumer makes trade-offs and selects best alternative for purchase
Service Encounter Stage
Pre-Purchase Stage
Service Encounter Stage
Post-Purchase Stage
● High- to low-contact service encounters
● The servuction system
● Theater as a metaphor for service deliveryService facilitiesPersonnelRole and script theories
High-Contact to Low-Contact Service Encounters (Fig 2.20)
The Servuction System (Fig 2.22)
Servuction System:Service Production and Delivery
● Servuction SystemVisible front stage Invisible backstage
● Service OperationsTechnical core Includes facilities, equipment, and personnel
● Service DeliveryFinal assembly of serviceDelivery of service
● Other contact points
Theater as a Metaphor for Service Delivery
“All the world’s a stage and all the men and women merely players. They have their exits and their entrances and each man in his time plays many parts”
William Shakespeare
“As You Like It”
Theater as a Metaphor
● Service delivery is a performance
● Service facilities are the stage
● Service employeesActors/cast (front stage)Production team (back stage)
● Roles
● Scripts
Post-Purchase Stage
Pre-Purchase Stage
Service Encounter Stage
Post-Purchase Stage
Evaluation of service performance
Future intentions
Customer Satisfaction Is Central to the Marketing Concept
● Customer satisfaction is complex
expectations prior to consumption
observe/experience service performance
compare it to prior expectations
Customer Satisfaction Is Central to the Marketing Concept
● Comparison results in satisfaction judgments
Positive disconfirmation (better than expected)
Confirmation (same as expected)
Negative disconfirmation (worse than expected)
Customer Delight:Going Beyond Satisfaction
● Customer delight has three components:
Unexpectedly high levels of performanceArousal (e.g., surprise, excitement)Positive affect (e.g., pleasure, joy, or happiness)
● Customer delight raises expectations
● Difficult to “delight” customers in future
● Example: Progressive Insurance
Post-Purchase Stage:Future Intentions
● Satisfied Customers Repeat purchases Firm loyalty Positive word-of-mouth communications (1:3)
● Dissatisfied Customers Only 1 out of 25 complain Firm-switching behavior Negative word-of-mouth communications (1:10) High cost to service organization
MKT 346 Key Concepts: Chapter 2
● Consumer decision making: pre-purchase stage, service encounter stage, post-purchase stage
● Pre-purchase stage: need awareness, information search, evaluation of alternatives, purchase decision
● Evaluation of alternatives: service attributes, perceived risks, service expectations
● Service encounter stage: servuction system, theater as a metaphor
● Post-purchase stage: customer satisfaction, future intentions