CHAPTER 2 – CONSUMER BEHAVIOUR IN SERVICES

2.1 INTRODUCTION
Consumer orientation lies at the heart of the marketing concept.
As marketers; we are required to understand our consumers and to build our
organizations around them. As Jeff Bezos of Amazon.com puts it, “We see our
customers as invited guests to a party, and we are the hosts. It’s our job every day to
make every important aspect of the customer experience a little bit better.”2
Understanding consumers and improving the experience is particularly important for
services, which in many instances still tend to be operations-dominated rather than
customer-oriented. them, and how they evaluate these services once they have
received them.

Throughout the three primary stages of the consumer decision making—pre-purchase,

consumption and post purchase evaluation—the consumer must be using a process or
model to make his or her decision. Although a variety of models has been developed
and is discussed in this chapter, it is important to point out that no model is wholly
accurate. The consumer’s mind is still closed to us; it is a “black box” that remains
sealed. We can observe inputs to the box and the decisions made as a result, but we
can never know how the act of processing inputs (information) truly happens.

2.2 THE CONSUMER DECISION PROCESS: AN OVERVIEW

To market services effectively, marketing managers need to understand the thought
processes used by consumers during each of the three stages of the consumer
decision process: the prepurchase choice among alternatives, the consumer’s
reaction during consumption, and the post purchase evaluation of satisfaction (see
Figure 4.1).

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2.2.1 The Prepurchase Stage: The Stimulus
The prepurchase stage of the consumer decision process refers to all consumer
activities occurring before the acquisition of the service. This stage begins when an
individual receives a stimulus that incites a consumer to consider a purchase. The
stimulus may be a commercial cue, a social cue, or a physical cue. Commercial cues
are the result of promotional efforts. Similarly, social cues are obtained from the
individual’s peer group or from significant others. the stimulus may also be the result of
a physical cue such as thirst, hunger, or various other biological cues.

2.2.2 The Prepurchase Stage: Problem Awareness

Problem awareness occurs when consumers realize that they need to do something to
get back to a normal state of comfort. During the problem awareness phase of
consumer decision making, the consumer examines whether a need or want truly exists
for the product category. Ultimately, needs are unsatisfactory conditions of the
consumer that prompt him or her to an action that will make the condition better. In
contrast, wants are desires to obtain more satisfaction than is absolutely necessary to
improve an unsatisfactory condition. Accordingly, problem awareness may be based on
a shortage (a need) or on an unfulfilled desire (a want).

2.2.3 The Prepurchase Stage: Information Search

The awareness of a problem demands a solution from the individual, and usually
implies that a potential purchase will ensue. The individual searches for alternatives
during the information search phase of the prepurchase stage. Alternatives that the

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consumer actually remembers at the time of decision making are referred to as the
evoked set. Of the brands in the evoked set, those considered unfit (e.g., too
expensive, too far away, etc.) are eliminated right away. The remaining alternatives are
termed the consideration set. An internal search accesses the consumer’s own
memories about possible alternative colleges. The internal search may be followed by
an external search.

2.2.4 The Prepurchase Stage: Evaluation of Alternatives

Once relevant information has been collected from both internal and external sources,
the consumer arrives at a consideration set of alternative solutions to resolve the
recognized problem. The possible solutions are considered in the evaluation of
alternatives phase of the consumer decision process. This phase may consist of a
nonsystematic evaluation of alternatives, such as the use of intuition—simply
choosing an alternative by relying on a “gut-level feeling”—or it may involve a
systematic evaluation technique, such as a multi-attribute choice model. Such
systematic models utilize a set of formalized steps to arrive at a decision.

Another type of multi-attribute approach that has been suggested is the lexicographic
approach. This approach describes so-called “lazy decision makers” who try to
minimize the effort involved. They look at each attribute in turn, starting with the most
important, and try to make a decision.

2.2.5 The Consumption Stage: Choice

During this consumption stage, the consumer may make a store choice—deciding to
purchase from a particular outlet, or a nonstore choice—deciding to purchase from a
catalog, the Internet, or a variety of mail-order possibilities. This decision is
accompanied by a set of expectations about the performance of the product to be
purchased. In the case of goods, the consumer then uses the product and disposes of
any solid waste remaining. The activities of buying, using, and disposing are grouped
together and labeled the consumption process.

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2.2.6 The Post purchase Stage: Postpurhase Evaluation
Once a purchase has been made and as the product, whether a service or a good is
being consumed, post purchase evaluation takes place. During this stage, consumers
may experience varying levels of cognitive dissonance—doubt that the correct
purchase decision has been made. Marketers often attempt to minimize the consumer’s
cognitive dissonance by reassuring the customer that the correct decision has been
made.

2.3 SPECIAL CONSIDERATIONS PERTAINING TO SERVICES

Although the consumer decision process model applies to both goods and services,
unique considerations arise with respect to service purchases. Many of these special
considerations can be directly attributed to the unique service characteristics of
intangibility, inseparability, heterogeneity and perishability.

2.3.1 Prepurchase Stage Considerations: Perceived Risk

In contrast to consumers when purchasing goods, consumers of services tend to
perceive a higher level of risk during the prepurchase decision stage.

Consequently, perceived risk is proposed to consist of two dimensions:

• Consequence, the degree of importance and/or danger of the outcomes derived from
any consumer decision.
• Uncertainty, the subjective possibility of the occurrence of these outcomes.

Types of Risk As the idea of consumer perceived risk developed, five types of
perceived risk were identified that were common in many purchase situations, based on
five different kinds of outcomes: financial, performance, physical, social, and
psychological.

Risk and Standardization Much of the heightened level of perceived risk can be
attributed to the difficulty in producing a standardized service product. Perceived risk,

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therefore, tends to be higher for purchasing services in contrast to the purchase of
goods.

Co-Producer Risk The involvement of the consumer in the “production process of

services” is another source of increased perceived risk. Co-producer risk is directly
related to the concept of inseparability. Dental services provide a great example of the
consumer’s involvement in the production process.

Risk and Information Others have argued that the higher levels of risk associated with
service purchases are due to the limited information that is readily available before the
consumer makes the purchase decision. For example, the economics literature
suggests that goods and services possess three different types of attributes:

• Search attributes—attributes that can be determined prior to purchase.

• Experience attributes—attributes that can be evaluated only during and after the
production process.

Credence attributes—attributes that cannot be evaluated confidently, even

immediately after receipt of the good or service.
Search attributes typically consist of tangibles that can be evaluated prior to purchases.

A large proportion of the properties possessed by services (e.g., the friendliness of the
flight attendants of a particular airline or the skill level of a hairstylist) can be discovered
by consumers only during and after the consumption of the service; these are referred
to as experience attributes.

Risk and Brand Loyalty If we start with the premise that consumers do not like taking
risks, it would seem obvious that they will try, whenever possible, to reduce risk during
the purchase process. One strategy is to be brand- or store-loyal.

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2.3.2 Prepurchase Stage Considerations: The Importance of Personal Sources of
Information
Another special consideration during the prepurchase stage is the importance of
personal sources of information. Research has shown that in the area of
communications, personal forms such as word-of-mouth references and information
from opinion leaders are often given more importance than company-controlled
communications, such as mass advertising. A reference from a friend becomes more
important when the purchase to be made has a greater risk.

2.3.3 Prepurchase Stage Considerations: Fewer Alternatives to Consider

In comparison with goods, another difference for service marketers to consider is that
consumers of services tend to evaluate a smaller number of alternative sources of
supply during the prepurchase stage. This situation occurs for a variety of reasons.
First, each service provider tends to offer only one brand. For example, Geico Insurance
sells only one brand of insurance—Geico. Similarly, your dentist provides only one
brand of dental care. In contrast, consumers shopping for a blender generally have
many brands to consider at each retail location.

The second reason the consideration set tends to be smaller pertains to the number of
establishments providing the same service. Services tend to have a smaller number of
outlets providing the same service.

2.3.4 Prepurchase Stage Considerations: Self-Service as a Viable Alternative

The final, but important, difference between goods and services in the prepurchase
choice stage of the consumer decision process is that self-provision often becomes a
viable alternative for such services as lawn care, fence installation, housekeeping,
painting, and a number of other services. In comparison, consumers rarely consider
building a refrigerator over purchasing one from a local retailer. Consequently, many
service providers must consider the customer’s own self-provision as a viable
competitor in the marketplace.

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2.3.5 Consumption Stage Considerations
The consumption of goods can be divided into three activities: buying, using, and
disposing.
This scenario does not apply to the consumption of services, however. First of all, no
clear-cut boundary or definite sequence exists between the acquisition and the use of
services because there is no transfer of ownership. Because of the prolonged
interactions between the customer and the service provider, the production, acquisition,
and use of services become entangled and appear to be a single process. Furthermore,
the concept of disposal is irrelevant because of the intangibility and experiential nature
of services.

2.3.6 Post choice Considerations

The post purchase evaluation of services is a complex process. It begins soon after the
customer makes the choice of the service firm he or she will be using and continues
throughout the consumption and post consumption stages. The evaluation is influenced
by the unavoidable interaction of a substantial number of social, psychological, and
situational variables. Service satisfaction relies not only on the properties of the four
elements of the servuction system—contact personnel, inanimate environment, other
customers, and internal organization systems—but also on the synchronization of these
elements in the service production/consumption process.

Post choice Models: The Expectancy Disconfirmation Theory

How does service satisfaction arise during the consumption and post purchase stages?
A number of approaches have been suggested, but perhaps the simplest and most
powerful is the expectancy disconfirmation theory. The basic concept behind this
explanation is straightforward. Consumers evaluate services by comparing expectations
with perceptions. If the perceived service is better than or equal to the expected service,
then consumers are satisfied.
Hence, ultimately customer satisfaction is achieved through the effective management
of customer perceptions and expectations.

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Post choice Models: The Perceived-Control Perspective
Another explanation that assists in describing the post purchase stage is the perceived-
control perspective. Over the years, the concept of control has drawn considerable
attention from psychologists.

The basic premise of this perspective is that during the service experience, the higher
the level of control over the situation perceived by consumers, the higher their
satisfaction with the service will be. A similar positive relationship is proposed between
service providers’ experience of control and their job satisfaction.

Thus, when consumers perceive that they are in control, or at least that what is
happening to them is predictable, the effect can be the same as that achieved by
behavioral control. In other words, it is the perception of control, not the reality that is
most important.
It is equally important to an airline that delays a flight after passengers have boarded
but fails to let them know what is happening or how long the delay will be. In both
situations, customers will feel that they have lost control over the situation, which
eventually tends to result in customer dissatisfaction.
Post choice Models: The Script Perspective—All the World’s a Stage and All the
People Players
A number of theories in psychology and sociology can be brought together in the ideas
of a script. The script perspective proposes that rules, mostly determined by social
and cultural variables, exist to facilitate interactions in daily repetitive events, including a
variety of service experiences. These rules shape the participants’ expectations in these
types of interactions.

The given chapter contents are compiled from the given source. [ CITATION Hof11 \l 1033 ]
Works Cited
Hoffman, K. D., & Bateson, J. E. (2011). Services Marketing Concepts, Strategies & Cases. Mason, OH:
South-Western Cengage Learning

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