Consumer Expectations of Services Donna J. Hill, Ph.D. Mtg Fall 2000

Consumer Expectations l Pre-trial beliefs about a service that function as standards against which performance is judged.

Types of Expectations l Desired service -- the level of service the customer hopes to receive l Adequate service -- the level of service the customer will accept

Figure 3-1 Dual Customer Expectation Levels Adequate Service Desired Service Zone of Tolerance

The Zone of Tolerance The Zone of Tolerance--- The extent to which customers recognize and are willing to accept variation in service performance Adequate Service Desired Service Zone of Tolerance

Figure 3-3 Zones of Tolerance for Zones of Tolerance for Different Service Dimensions Most Important FactorsLeast Important Factors Level of Expectation Source: Berry, Parasuraman, and Zeithaml (1993) Adequate Service Desired Service Zone of Tolerance Desired Service Adequate Service Zone of Tolerance Desired Service Adequate Service

Zone of Tolerance and Importance of Service Dimensions l as a service dimension becomes more important zone of tolerance will narrow and desired and adequate levels will increase

Figure 3-4 Zones of Tolerance for Zones of Tolerance for First-Time and Recovery Service First-Time Service Outcome Process Outcome Process Recovery Service Expectations LOWHIGH Source: Parasuraman, Berry and Zeithaml (1991)

Zones of Tolerance for First-Time and Recovery Service l Consumers have a narrower zone of tolerance and a higher set of expectations for a service recovery than for the first time service expereince.

Figure 3-5 Factors that Influence Factors that Influence Desired Service Desired Service Adequate Service Zone of Tolerance Enduring Service Intensifiers Personal Needs

Factors that Influence Desired Service l Personal Needs --- states or conditions essential to the physical or psychological well being --- physical, social, psychological, and funtional

Factors that Influence Desired Service l Enduring Service intensifiers --- individual stable factors that lead the customer to a heightened sensitivity –derived service expectations –personal service philosophy

Figure 3-6 Factors that Influence Factors that Influence Adequate Service Desired Service Adequate Service Zone of Tolerance Self-Perceived Service Role Situational Factors Perceived Service Alternatives Transitory Service Intensifiers

Factors That Influence Adequate Service Expectations l Are short-term in nature and fluctuate more than the factors that influence desired expectations

Factors That Influence Adequate Service Expectations l Transitory service intensifers --- short- term, individual factors that make a consumer more aware of the need ofr service

Factors That Influence Adequate Service Expectations l Perceived Service Alternatives---- l As the number of alternatives increases, the level of adequate service increases and the zone of tolerance narrows

Factors That Influence Adequate Service Expectations l Situational Factors –Temporary changes in the normal state of things ---- tends to lower the level of adequate service expected and widen the zone of tolerance

Situational Factors l Reason for purchase l Consumer mood l Weather l Time constraints l Emergency

Factors That Influence Adequate Service Expectations l Self Perceived Service Role --- how well the customer perceives they are performing their own role in service delivery

Figure 3-7 Factors that Influence Factors that Influence Desired and Predicted Service Desired Service Adequate Service Zone of Tolerance Predicted Service Explicit Service Promises Implicit Service Promises Word-of-Mouth Past Experience

Factors that Influence Desired and Predicted Service l Explicit Service Promises l Implicit Service Promises l Word of Mouth l Past Experience –particular service –within the same industry –related services More experience the narrower the Zone of Tolerance

Objectives for Chapter 3: Customer Expectations of Service Recognize that customers hold different types of expectations for service performance Discuss controllable and uncontrollable sources of customer expectations Distinguish between customers’ global expectations of their relationships and their expectations of the service encounter Acknowledge that expectations are similar for many different types of customers Delineate the most important current issues surrounding customer expectations

Factors that Influence Desired and Predicted Service l Explicit --- personal and nonpersonal statements from the organization --- Advertising, personal selling, contracts, other communications --- usually increases desired level and narrows zone l Implicit service related cues -Tangibles -- –Price -- price directly related to predicted service and inversely related to width of zone. –Distribution - multiple outlets

Service Related Cues Other Tangibles -- l Service personnel l Tangible cues l Other customers l Firm image - if high than zone widens l Pre-service waiting

Consumer Expectations l Ideal --- wished for level. l Desired --- wants or hopes to receive. l Adequate --- minimum level of service consumers will tolerate. l Zone of tolerance --- area between adequate and ideal. l Predicted --- believe will receive; takes in all the circumstances and modifies expectations.

Model of Consumer Expectations Ideal Service Desired Service Adequate Service Predicted Service Zone of Tolerance Source: Adapted from Valarie A. Zeithaml, Leonard L. Berry, and A. Parasuraman, “The Nature and Determinants of Customer Expectations of Services” Journal of Academy of Marketing Science, Vol.. 21 (Winter 1993), pp

What Are We Really Concerned About? l How expectations are formed. l Process through which expectations are raised or lowered. l Impact on the width of the zone of tolerance. l Conclusion ---- Must manage expectations.

Internal Antecedents of Consumer Expectations l Past experience --- has greatest impact. –particular service –within the same industry –related services l More experience the narrower the Zone of Tolerance

External Antecedents of Consumer Expectations l Competitive options- ”We try harder” l Social context-often increase l Word-of-mouth communication --- strongest source of information

Firm-Produced Antecedents of Consumer Expectations l Promotions -- usually increases desired level and narrows zone l Price -- price directly related to predicted service and inversely related to width of zone. l Distribution - multiple outlets

Role of Consumer Expectations l During Prepurchase Phase --- higher expectations more likely to purchase. l During Service Encounter --- expectations modified (however usually not desired or ideal) l During Postpurchase Phase --- altered and impact over time

Managing Customer Expectations l Customer expectations must be managed.

Managing Consumer Expectations During Prepurchase Phase t Learn what customers expect. tAsk employees and customers. t Tell customers what to expect. tAll factors above “line of visibility” t Consistently provide the service customers expect. tForms concrete expectations

Managing Consumer Expectations During Service Encounter t Communicate with customers during the service. t If possible, modify the service to meet customer expectations. t Explain why service cannot be modified.

Managing Consumer Expectations During Postpurchase Phase t Communicate - expectations were met? t Develop a follow-up program. t Develop a procedure for dealing with dissatisfied customers.

Objectives for Chapter 3: Customer Expectations of Service Recognize that customers hold different types of expectations for service performance Discuss controllable and uncontrollable sources of customer expectations Distinguish between customers’ global expectations of their relationships and their expectations of the service encounter Acknowledge that expectations are similar for many different types of customers Delineate the most important current issues surrounding customer expectations