Consumer Behavior in Services

Agenda Search, Experience and Credence Properties Consumer Choice Consumer Experience Post-experience evaluation

Search, Experience and Credence Properties SearchExperienceCredence Attributes that a consumer can determine before purchase Attributes that can be discerned only after purchase Characteristics that the consumer may find impossible to evaluate even after purchase and consumption E.g., Clothing, furniture, jewelry E.g., Restaurant meals, vacations E.g., Medical diagnosis, Auto repair

Continuum of Evaluation for Different Types of Products Clothing Jewelry Furniture Houses Automobiles Restaurant meals Vacations Haircuts Child care Television repair Legal services Root canals Auto repair Medical diagnosis Difficult to evaluate High in search qualities High in experience qualities High in credence qualities Most Goods Most Services

Products that are high in…… Search qualities: easiest to evaluate Experience qualities: more difficult to evaluate Credence qualities: most difficult to evaluate

Consumer Decision Making and Evaluation of Services Consumer Choice Consumer Experience Post-experience Evaluation

Consumer Choice Need Recognition Information Search Pre-purchase Evaluation of Alternatives stage Purchase

Activity (Individual) Assume that you have a need for a service keeping in mind the consumer choice stages discussed in the previous slide Make an exhaustive list of information sources using which you would obtain information about the service that satisfies your need How would you evaluate the various alternatives before finally reaching a decision?

Special Considerations - Services Prepurchase stage Perceived Risk Importance of personal sources of information Fewer alternatives to consider Self-service as a viable alternative

Perceived Risk This element is especially relevant for services that are high in experience or credence attributes Risk-reducing strategies: Seeking information from respected personal sources Relying on a firm that has a good reputation

Consumer Experience In services, the experience itself dominates the evaluation process Creating and managing effective processes and experiences are essential for service organizations Companies try to create memorable experiences for their consumers

Post-experience Evaluation Word-of-mouth communication Attribution of Dissatisfaction Positive or negative biases