Chapter 2:
Consumer Behavior
In a Services Context
MKT 346: Marketing of Services
Dr. Houston
Consumer Decision Making: The Three Stage Model
Pre-
Service
Post-Purchase
Purchase
Encounter
Stage
Stage
Stage
Pre-Purchase Stage
Pre-Purchase Stage
● Customers seek
solutions to needs
● Uncertainty increases
perceived risk
Service Encounter Stage
● Service providers must:
 Develop risk reduction
strategies
 Understand service
expectations
Post-Purchase Stage
 Service purchase
decision process
Pre-Purchase Stage
Need Awareness
Information Search
Evaluation of Alternatives
Purchase Decision
Pre-Purchase Stage:
Need Awareness
● We recognize that we have a need
● Possible sources of needs:
People’s unconscious minds
Physical conditions
External 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 Strategies
Used 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
● High- to low-contact
service encounters
● The servuction system
Service
Encounter Stage
● Theater as a metaphor
for service delivery
Service facilities
Personnel
Role and script theories
Post-Purchase Stage
High-Contact to Low-Contact
Service Encounters (Fig 2.20)
The Servuction System
(Fig 2.22)
Servuction System:
Service Production and Delivery
● Servuction System
Visible front stage
Invisible backstage
● Service Operations
Technical core
Includes facilities, equipment, and personnel
● Service Delivery
Final assembly of service
Delivery 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 employees
Actors/cast (front stage)
Production team (back stage)
● Roles
● Scripts
Post-Purchase Stage
Pre-Purchase Stage
 Evaluation of
service
performance
Service Encounter Stage
 Future intentions
Post-Purchase Stage
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 performance
Arousal (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