Advanced Services Marketing MARK 5065

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Advanced Services Marketing (MARK 5065)

• Study Period 3, 2007

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Lecture 3

• FOCUS ON THE CUSTOMERS
• BEHAVIOUR, EXPECTATIONS PERCEPTION

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Objectives

• how consumers choose and evaluate services,
  through focusing on factors that are particularly
  relevant for services.
• the elements of consumer behavior that a services
  marketer must understand choice behavior,
  consumer experiences, and post experience
  evaluation.
• what influences customer perceptions of service
  and the relationships among customer
  satisfaction, service quality, and individual
  service encounters.
• service quality and its five key dimensions
  reliability, responsiveness, empathy, assurance,
  and tangibles.

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Consumer Behavior in Services

• Search, Experience, and Credence Properties
• Consumer Choice
• Consumer Experience
• Post experience Evaluation
• Understanding Differences Among Consumers

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Consumer Evaluation Processes for Services

• Search Qualities
• attributes a consumer can determine prior to
  purchase of a product
• Experience Qualities
• attributes a consumer can determine after
  purchase (or during consumption) of a product
• Credence Qualities
• characteristics that may be impossible to
  evaluate even after purchase and consumption

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Figure 3.2Continuum of Evaluation for
Different Types of Products
Clothing Jewelry Furniture Houses Automobiles Rest
aurant meals Vacations Haircuts Child
care Television repair Legal services Root
canals Auto repair Medical diagnosis
Most Services
Most Goods
Easy to evaluate
Difficult to evaluate
High in search qualities
High in experience qualities
High in credence qualities
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Figure 3.3Stages in Consumer Decision Making and
Evaluation of Services
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Issues to Consider in Examining the Consumers
Service Experience

• Services as processes
• Service provision as drama
• Service roles and scripts
• The compatibility of service customers
• Customer coproduction
• Emotion and mood

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Global FeatureDifferences in the Service
Experience in the U.S. and Japan

• Authenticity
• Caring
• Control
• Courtesy
• Formality
• Friendliness
• Personalization
• Promptness

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Chap. 4 - Customer Expectations of Service

• Factors that Influence Customer Expectations of
  Service
• Issues Involving Customer Service Expectations

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Figure 4.5Zones of Tolerance for
DifferentService Dimensions
Desired Service
Level of Expectation
Desired Service
Zone of Tolerance
Adequate Service
Reliability
Tangibles
Source L. L. Berry, A. Parasuraman, and V. A.
Zeithaml, Ten Lessons for Improving Service
Quality, Marketing Science Institute, Report No.
93-104 (May 1993).
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Figure 4.6 Factors That Influence Desired
Service
Lasting Service Intensifiers
Desired Service
Personal Needs
Zone of Tolerance
Adequate Service
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Figure 4.7 Factors That Influence Adequate
Service
Temporary Service Intensifiers
Desired Service
Perceived Service Alternatives
Zone of Tolerance
Self-Perceived Service Role
Predicted Service
Adequate Service
Situational Factors
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Customer Perceptions of Service

• Customer Perceptions
• Customer Satisfaction
• Service Quality
• Service Encounters The Building Blocks for
  Customer Perceptions

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Factors Influencing Customer Satisfaction

• Product/service quality
• Specific product or service features
• Consumer emotions
• Attributions for service success or failure
• Perceptions of equity or fairness
• Other consumers, family members, and coworkers
• Price
• Personal factors
• the customers mood or emotional state
• situational factors

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Outcomes of Customer Satisfaction

• Increased customer retention
• Positive word-of-mouth communications
• Increased revenues

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Service Quality

• The customers judgment of overall excellence of
  the service provided in relation to the quality
  that was expected.
• Service quality assessments are formed on
  judgments of
• outcome quality
• interaction quality
• physical environment quality

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The Five Dimensions of Service Quality
Reliability

• Ability to perform the promised service
  dependably and accurately.
• Knowledge and courtesy of employees and their
  ability to inspire trust and confidence.
• Physical facilities, equipment, and appearance of
  personnel.
• Caring, individualized attention the firm
  provides its customers.
• Willingness to help customers and provide prompt
  service.

Assurance
Tangibles
Empathy
Responsiveness
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SERVQUAL Attributes
RELIABILITY
EMPATHY

• Giving customers individual attention
• Employees who deal with customers in a caring
  fashion
• Having the customers best interest at heart
• Employees who understand the needs of their
  customers
• Convenient business hours

• Providing service as promised
• Dependability in handling customers service
  problems
• Performing services right the first time
• Providing services at the promised time
• Maintaining error-free records

RESPONSIVENESS
TANGIBLES

• Keeping customers informed as to when services
  will be performed
• Prompt service to customers
• Willingness to help customers
• Readiness to respond to customers requests

• Modern equipment
• Visually appealing facilities
• Employees who have a neat, professional
  appearance
• Visually appealing materials associated with the
  service

ASSURANCE

• Employees who instill confidence in customers
• Making customers feel safe in their transactions
• Employees who are consistently courteous
• Employees who have the knowledge to answer
  customer questions

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The Service Encounter

• is the moment of truth
• occurs any time the customer interacts with the
  firm
• can potentially be critical in determining
  customer satisfaction and loyalty
• types of encounters
• remote encounters, phone encounters, face-to-face
  encounters
• is an opportunity to
• build trust
• reinforce quality
• build brand identity
• increase loyalty

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Common Themes in Critical Service Encounters
Research
Recovery
Adaptability
employee response to service delivery system
failure
employee response to customer needs and requests
Spontaneity
Coping
unprompted and unsolicited employee actions and
attitudes
employee response to problem customers
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Recovery
DO
DONT

• Acknowledge problem
• Explain causes
• Apologize
• Compensate/upgrade
• Lay out options
• Take responsibility

• Ignore customer
• Blame customer
• Leave customer to fend for him/herself
• Downgrade
• Act as if nothing is wrong
• Pass the buck

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Adaptability
DO
DONT

• Recognize the seriousness of the need
• Acknowledge
• Anticipate
• Attempt to accommodate
• Adjust the system
• Explain rules/policies
• Take responsibility

• Ignore
• Promise, but fail to follow through
• Show unwillingness to try
• Embarrass the customer
• Laugh at the customer
• Avoid responsibility
• Pass the buck

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Spontaneity
DO
DONT

• Take time
• Be attentive
• Anticipate needs
• Listen
• Provide information
• Show empathy

• Exhibit impatience
• Ignore
• Yell/laugh/swear
• Steal from customers
• Discriminate

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Coping
DO
DONT

• Listen
• Try to accommodate
• Explain
• Let go of the customer

• Take customers dissatisfaction personally
• Let customers dissatisfaction affect others

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Figure 5.7 - Evidence of Service from the
Customers Point of View

• Contact employees
• Customer him/herself
• Other customers

• Operational flow of activities
• Steps in process
• Flexibility vs. standard
• Technology vs. human

People
Physical Evidence

• Tangible communication
• Servicescape
• Guarantees
• Technology
• Website

Process
Source From Managing the Evidence of Service
by M. J. Bitner from The Service Quality
Handbook, eds. E. E. Scheuing and W. F.
Christopher (1993), pp. 358-70.
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Critical Service Encounters Research

• GOAL
• understanding actual events and behaviors that
  cause customer dis/satisfaction in service
  encounters
• METHOD
• Critical Incident Technique
• DATA
• stories from customers and employees
• OUTPUT
• identification of themes underlying satisfaction
  and dissatisfaction with service encounters

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• Questions???