Topic 3

Consumer Behavior in Services

In this chapter we discuss consumer decision
process issues as they relate to the purchase
of services.
 Objective of this topic
1. Appreciate the value of models that attempt to
explain how consumers process information.
2. Discuss the six steps that comprise the consumer
decision process model.
3. Understand the special considerations of service
purchases as they pertain to the pre-purchase,
consumption, and post-purchase stages of the
consumer decision process model.
4. Describe three theories that attempt to explain the
consumer’s post-purchase evaluation with regards
to customer satisfaction.
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 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 pre-purchase choice among
alternatives, the consumer’s reaction during
consumption, and the post-purchase
evaluation of satisfaction.
 Consumer Decision Process Model

PREPURCHASE CONSUMPTION POSTPURCHASE

STAGE STAGE STAGE

Stimulus Problem Information Evaluation of Choice Postpurchase

awareness search alternatives evaluation

• Commercial cue • Internal • Buying

• Evaluation
• Physical cue • External • Using
of satisfaction
• Social cue • Disposing
• Multiattribute
• Shortage (a need)
Models
• Unfulfilled desire (a want)

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The Pre-purchase Stage: The Stimulus
The pre-purchase 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.
1. Commercial cue: An event or motivation that
provides a stimulus to the consumer and is a
promotional effort on the part of the
company.
2. Physical cue: A motivation, such as thirst,
hunger, or another biological cue that
provides a stimulus to the consumer.
3. Social cue: An event or motivation that
provides a stimulus to the consumer,
obtained from the individual’s peer group or
from significant others.
 The Pre-purchase 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.
• Problem awareness may be based on a shortage
(a need) or on an unfulfilled desire (a want).
 The Pre-purchase Stage:
Information Search
• During the information search phase, the
consumer collects information regarding
possible alternatives that will ultimately
resolve the consumer’s problem.
– The awareness set—the set of alternatives of
which a consumer is aware.
– Alternatives that the consumer actually
remembers at the time of decision making are
referred to as the evoked set.
• Internal search: A passive approach to
gathering information in which the
consumer’s own memory is the main source
of information about a product.
• External search A proactive approach to
gathering information in which the consumer
collects new information from sources outside
the consumer’s own experience.
 The Pre-purchase Stage:
Evaluation of Alternatives
• Evaluation of alternatives: The phase of the
pre-purchase stage in which the consumer
places a value or “rank” on each alternative.
– Nonsystematic evaluation: Choosing among
alternatives in a random fashion or by a “gut-level
feeling” approach.
– Systematic evaluation: Choosing among
alternatives by using a set of formalized steps to
arrive at a decision.
– Linear compensatory approach: A systematic
model that proposes that the consumer creates a
global score for each brand by multiplying the
rating of the brand on each attribute by the
importance attached to the attribute and adding
the scores together.
 Multi-attribute Choice Model for
Evaluating Alternative Universities
• Lexicographic approach: A systematic model
that proposes that the consumer make a
decision by examining each attribute, starting
with the most important, to rule out
alternatives.
Analyzing consumer multi-attribute models
provides five valuable information:
1. A list of alternatives that are included in the
consideration set.
2. The lists of attributes that consumers consider
when making purchase decisions.
3. The importance weights attached to each
attribute.
4. Performance beliefs, reflected by ratings,
associated with a particular firm.
5. Performance beliefs, reflective by ratings,
associated with the competition.
 The Consumption Stage: Choice
• Consumption process: The activities of
buying, using, and disposing of a product.
 The Post-purchase Stage:
Post-purhase Evaluation
• Cognitive dissonance: Doubt in the
consumer’s mind regarding the correctness of
the purchase decision.
University Selection: A Post Purchase
Evaluation for OSU
Special Considerations Pertaining
to Services
 CONSUMER DECISION-MAKING PROCESS IN SERVICES

Information Search Evaluation of Alternatives

• Perceived risk • Evoked set

•Use of personal sources • Emotion and mood

Postpurchase Evaluation Purchase & Consumption

• Attribution of dissatisfaction • Service provision as drama
• Innovation diffusion • Service roles & scripts
• Brand loyalty • Compatibility of customers

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 1. Information Search

• Use of Personal Sources

1: Consumers seek and rely more on information from personal
sources than from non-personal sources when evaluating services
before purchase.
2: Consumers engage in greater postpurchase evaluation &
information-seeking with services than with good.
3: Consumers engage in more postpurchase evaluation than
prepurchase evaluation when selecting & consuming services.
• Perceived Risk
4: Consumers perceive greater risks when buying services than when
buying goods.

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 Types of Risk
1. Financial risk: The possibility of a monetary
loss if the purchase goes wrong or fails to
operate correctly.
2. Performance risk: The possibility that the
item or service purchased will not perform
the task for which it was purchased.
3. Physical risk: The possibility that if something
does go wrong, injury could be inflicted on
the purchaser.
4. Social risk: The possibility of a loss in personal
social status associated with a particular
purchase.
5. Psychological risk: The possibility that a
purchase will affect an individual’s self- esteem.
6. Risk and Standardization: Variability
7. Co-Producer Risk: Inseparability
8. Risk and Information: 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.
 SERVICES:
SEARCH, EXPERIENCE & CREDENCE PROPERTIES

Most
Most
goods
services

Difficult to
Easy to evaluate evaluate

Auto repair
Medical diagnosis
Root canal
Television repair
Clothing

Restaurant meals

Child care
Vacation

High in search High in experience High in credence

qualities qualities qualities
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10. Risk and Brand Loyalty
• Search costs—the time costs associated with seeking out new
alternatives.
• Transaction costs—the monetary costs associated with first-time
visits, such as new x-rays when changing dentists.
• Learning costs—costs such as time and money that are associated
with learning new systems, such as new versions of software
packages.
• Loyal customer discounts—discounts that are given for maintaining
the same service over time, such as accident-free auto insurance
rates. Such discounts are sacrificed when switching from one
supplier to the next.
• Customer habit—costs associated with changing established
behavior patterns.
• Emotional costs—the emotional turmoil that one may experience
when severing a long-term relationship with a provider. Emotional
costs are particularly high when a personal relationship has
developed between the client and the provider.
• Cognitive costs—costs in terms of the time it takes simply thinking
about making a change in service providers.
 2. Evaluation of Service Alternatives
• Evoked Set
5: The consumer’s evoked set of alternatives is smaller with services than
with goods.
6: For many nonprofessional services, the consumer’s evoked set frequently
includes self-provision of the service.
• Emotion and Mood
7: Positive (negative) moods & emotions enhance (decrease) the likelihood
of performance of behaviors with positive expected outcomes.
8: Mood & emotion bias the customer’s evaluation of service encounters in
“mood-congruent” directions.
9: The mood of the customer influences the way impressions of a service are
encoded, retained, and retrieved by the customer.
10: The greater the human interaction in the service encounter, the more
likely the consumer’s evaluation of the service will be influenced by
moods & emotion.

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 3. Service Purchase & Consumption
• Service Provision as Drama
11: The delivery of service can be conceived as drama where: service
personnel are the “actors,” service customers are the “audience,” physical
evidence of the service is the “setting,” and the process of service
assembly is the performance.
• Service Roles & Scripts
12: Service encounters can be viewed as role performance.
13: Negative departures from the customer’s expected script will detract
from service performance.
14: Departures from the customer’s expected script, including provision of
more of an attribute than expected, may detract from or add to the
service experience.
• The Compatibility of Service Customers
15: Customer compatibility is a factor that influences customer satisfaction,
particularly in high contact services.

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 4. Post-Purchase Evaluation

• Attribution of Dissatisfaction
16. Consumers attribute some of their dissatisfaction with services to their
own inability to specify of perform their part of the service.
17. Consumers may complain less frequently about services than about
goods due to their belief they themselves are partly responsible for their
dissatisfaction.
18. Consumers adopt innovation in services more slowly than they adopt
innovations in goods
• Brand Loyalty
19. Brand switching is less frequent with services than with products

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 Post-choice Considerations
1. Post-choice Models: The Expectancy Disconfirmation
Theory
The theory proposing that consumers evaluate services
by comparing expectations with perceptions.
• 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.
2. Post-choice Models: The Perceived-Control
Perspective
A model in which consumers evaluate services
by the amount of control they have over the
perceived situation.
• 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.
Thank You