Services Consumer Behavior Chapter 4 Services Consumer Behavior

Chapter Objectives Appreciate how consumer process models explain the manner in which consumers process information to make decisions. Discuss the six steps that comprise the consumer decision model. Understand the special considerations of service purchases as they pertain to the prepuchase, consumption, and postpurchase stages of the consumer decision process model. Describe three theories that attempt to explain the consumer’s postpurchase evaluation with regard to customer satisfaction. © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Opening Vignette: Planet Fitness The gym actively supports a “Judgement Free Zone” and a “No Lunks” policy Membership prices typically range from $10 to $15 a month It does not employ salespeople and offers few extra amenities that drive up costs It offers a clean, stylish facility with popular brand-name cardio and strength equipment Planet Fitness has successfully promoted itself as the gym for the common person © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 4.1: Consumer Decision Process Model © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Prepurchase Stage: The Stimulus Commercial Cues Stimulus the thought, action, or motivation that incites a person to consider a service Social Cues Physical Cues © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Prepurchase Stage: Problem Awareness Shortage (a need) The Prepurchase Stage: Problem Awareness Unfulfilled Desire (a want) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Prepurchase Stage: Information Search Internal Search External Search A passive approach to gathering information in which the consumer’s own memory is the main source of information about a product A proactive approach to gathering information in which the consumer collects new information from sources outside the consumer’s own experience © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 4.2: Multi-Attribute Choice Model for Evaluating Alternative Universities © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Prepurchase Stage: Evaluation of Alternatives Nonsystematic evaluation Such as the use of intuition—simply choosing by relying on a “gut-level feeling” Systematic evaluation Such as a multi- attribute choice model Linear compensatory approach Lexicographic approach © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Consumption Stage: Choice Consumption process Buying the product Store vs. nonchoice choice Using the product Disposing of the product © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Postpurchase Stage: Postpurchase Evaluation Strategies to minimize the consumer’s cognitive dissonance include: After-sale contact with the customer Providing a reassuring letter in the packing of the product Providing warranties and guarantees Reinforcing the consumer’s decision through the firm’s advertising © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Prepurchase Stage Considerations: Perceived Risk Consumers tend to perceive a higher level of risk during the prepurchase decision stage Actions are associated with higher levels of consequences and uncertainty Consequences—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 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Prepurchase Stage Considerations: Perceived Risk Five types of perceived risk Financial risk Performance risk Physical risk Social risk Psychological risk © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Prepurchase Stage Considerations: Perceived Risk Reasons for perceptions of increased risk Risk and standardization (heterogeneity) Co-producer risk (inseparability) Risk and Information Search attributes Experience attributes Credence attributes © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Prepurchase Stage Considerations: Perceived Risk Service consumers are more brand loyal Reduces the perceived risk associated with a purchase Limited number of choices are available Switching costs are higher Search costs Transaction costs Learning costs Loyal consumer discounts Customer habit Emotional costs Cognitive costs © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Mass advertising is less effective Word-of-mouth references rule Prepurchase Stage Considerations: The Importance of Personal Sources of Information Mass advertising is less effective Word-of-mouth references rule Target opinion leaders Nonpersonal sources may not be available Professional restrictions Small firms may lack the resources or knowledge to advertise effectively © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Prepurchase Stage Considerations: Fewer Alternatives to Consider Each service provider tends to offer only one brand A small number of outlets providing the same service Lack of prepurchase information © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Prepurchase Stage Considerations: Self-Service as a Viable Alternative Many service providers must consider the customer’s own self-provision as a viable competitor in the marketplace © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 4.4: The Consumer Decision Process: Special Considerations Pertaining to the Prepurchase Stage © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumption Stage Considerations Consumption sequence differs Goods: Production-Acquisition-Use-Disposal Services: Production-Acquisition-Use Stages are entangled and disposal is irrelevant Evaluation occurs during and after consumptions © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 4.5: The Consumer Decision Process: Special Considerations Pertaining to the Consumption Stage © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Postpurchase Considerations Postpurchase models The expectancy disconfirmation theory Proposes that consumers evaluate services by comparing expectations with perceptions The perceived control perspective Consumers evaluate services by the amount of control they have over the perceived situation The script perspective Argues that rules, mostly determined by social and cultural variables, exist to facilitate interactions in daily repetitive events, including a variety of service experiences © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Postpurchase Models: The Expectancy Disconfirmation Theory The simplest and most powerful model Customer satisfaction is achieved through the effective management of customer perceptions and expectations Customer satisfaction = Perceptions > Expectations Customer perceptions define reality © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Postpurchase Models: The Perceived-Control Perspective The basic premise 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 Consumers give up cash and control in exchange for benefits The concept of control consists of two types of control: Behavioral control Cognitive control © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Postpurchase Models: The Script Perspective “All the world’s a stage and all the people players” Customers’ satisfaction is a function of script congruence © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.