Customer Behavior in Service Encounters

Chapter 2: Lovelock

Effective Service Marketing Strategies

Three-Stage Model of Service Consumption

Prepurchase Stage: Search, evaluation of alternatives, decision

Service Encounter Stage: Role in high-contact vs. low-contact delivery

Post-Encounter Stage: Evaluation against expectations, future intentions

Differences among Services Affect Customer Behavior

Consumers are rarely involved in the manufacture of goods but often participate in service creation and delivery There are four categories of services:
People processing Possession processing Mental stimulus processing Information processing

Four Categories Of Services

Who or What Is the Direct Recipient of the Service? Nature of the Service Act People Possessions

Tangible Actions

People processing
(services directed at peoples bodies):

Possession processing
(services directed at physical possessions):

Intangible Actions

Barbers Health care

Refueling Disposal/recycling

Mental stimulus processing

(services directed at peoples minds):

Information processing
(services directed at intangible assets):

Education Advertising/PR

Accounting

Banking

People Processing -Services Directed at Peoples Bodies

People Processing -Services Directed at Peoples Bodies

Customers must:
Physically enter the service factory
Co-operate actively with the service operation Expect some degree of variability

Managers should think about process and output from customers perspective
To identify benefits created and non-financial costs: Time, mental, physical effort

Possession Processing

-Services Directed at Physical Possessions

Possession Processing

-Services Directed at Physical Possessions

Customers are less physically involved compared to people processing services Involvement is limited Production and consumption are separable In each instance, the output should be a satisfactory solution.

Mental Stimulus Processing

-Services Directed at Peoples Minds

Mental Stimulus Processing

Has the power to shape attitude and influence behaviour Ethical standards required when customers who depend on such services can potentially be manipulated by suppliers Physical presence of recipients not required Mode of delivery can vary Core content of services is information-based

-Services Directed at Peoples Minds

Can be inventoried

Information Processing

-Services Directed at Intangible Assets

Information Processing
Information Processing Information is the most intangible form of service output But may be transformed into enduring forms of service output Line between information processing and mental stimulus processing may be blurred.

-Services Directed at Intangible Assets

Mental Stimulus services and Information Processing services are combined under the umbrella, information-based services.

The Purchase Process for Services

Prepurchase Stage

Service Encounter Stage

Post-Encounter Stage

Evaluating a Service May Be Difficult

Search attributes:
Physical Evidence
Sampling

Experience attributes
Must experience product to know it
Vacations, movies, medical procedures

Credence attributes
Quality of repair and maintenance work of elevator Dental Surgery Legal matters

How Product Attributes Affect Ease of Evaluation

Most Goods Most Services

Easy to evaluate
Clothing Chair Motor vehicle Restaurant meals Lawn fertilizer Education

Difficult to evaluate*
Computer repair

Haircut
Entertainment

Legal services
Complex surgery

Foods

High in search attributes

High in experience High in credence attributes attributes

Source: Adapted from Zeithaml

*NOTE: Difficulty of evaluation tends to decrease with broad exposure

to a service category and frequency of use of a specific supplier

Perceived Risks in Purchasing and Using Services

Functionalunsatisfactory performance outcomes Financialmonetary loss, unexpected extra costs Temporalwasted time, delays leading to problems Physicalpersonal injury, damage to possessions

Psychologicalfears and negative emotions

Socialhow others may think and react Sensoryunwanted impact on any of five senses

Refer to Table 2.1

Service Encounter

The moment of Truth.

'A service business's performance is made
up of the sum of its countless interactions with its clients

A moment of truth is when an interaction occurs between a customer and the service provider that can leave a lasting positive or negative impression on a customer.

Distinctions between High-Contact and Low-Contact Services

High Contact
Customers visit service remain throughout Contact is physical Contact is tangible

Low Contact
Little or no physical contact with service personnel Trend of Self Service

Medium Contact

Active contact between customers and service personnel

Contact usually at arms length through electronic or physical distribution channels

Medium-Contact Services Lie in between These Two

Includes most peopleprocessing services

New technologies (e.g. the Web) help reduce contact levels

The Servuction System: Service Production and Delivery

Service Operations (front stage and backstage) Where inputs are processed and service elements created Service Delivery (front stage) Service Marketing (front stage)

Where final assembly of service elements takes place and service is delivered to customers Includes customer interactions with operations and other customers

Includes service delivery (as above) and all other contacts between service firm and customers

Includes facilities, equipment, and personnel

Service Marketing System for a High-Contact Service

SERVICE MARKETING SYSTEM
Service Delivery System
Service Operations System
Interior & Exterior Facilities Other Customers

Other Contact Points

Advertising Sales Calls Market Research Surveys Billing/Statements

Technical Core

Equipment

The Customer

Misc. Mail, Phone Calls, E-mails, Faxes, etc. Website

Service People

Random Exposure to Facilities/Vehicles Other Customers Chance Encounters with Service Personnel Word of Mouth

Backstage (invisible)

Front Stage (visible)

Service Marketing System for a Low-Contact Service

Service Operations System SERVICE MARKETING SYSTEM Service Delivery System Other Contact Points Advertising Market Research Surveys Billing/Statements Random Exposure to Facilities/Vehicles Word of Mouth

Mail

Technical Core

Self Service Equipment Phone, Fax, Website, etc.

The

Customer

Backstage (invisible)

Front Stage (visible)

Theater as a Metaphor for Service Delivery

All the worlds 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