Consumer Behavior in Service Encounters (Contd.)

4 Agenda Customer Perceptions Customer Satisfaction Chapter 4 Customer Perceptions Customer Satisfaction Service Encounters: The Building Blocks for Customer Perceptions 4-2

Customer Perceptions “Perception is defined as the process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world. This is a highly individual process based on each person’s needs, values and expectations” Schiffman and Kanuk,2002

Customer perceptions How customer assess whether they have experienced quality service and whether they are satisfied Perceptions are always considered relative to expectations. A discussion of quality and satisfaction is based on customer’s perceptions of the service - not some predetermined objective criteria of what service is or should be.

Transaction versus Cumulative Perceptions The customers will have perception on single, transaction-specific encounters as well as overall perceptions of a company based on all their experiences. Isolated encounters are the building blocks for overall, cumulative experience evaluations. Understanding perceptions at the transaction-specific level is critical for diagnosing service issues and making immediate changes.

Customer Satisfaction “Satisfaction is the consumer’s fulfillment response. It is a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption- related fulfillment.” (Richard Oliver) Satisfaction is the customer’s evaluation of a product or service in terms of whether that product or service has met the customer’s needs and expectations Satisfaction is viewed as a broader concept, while service quality is a component of customer satisfaction.

Customer Perceptions of Quality and Customer Satisfaction 4-7

Service Encounters Service encounters or “Moments of Truth” are the building blocks for customer perceptions Customer’s point of view – The most vivid impression of service occurs in the service encounter when the customer interacts with the service firm Organization’s point of view – Each encounter presents an opportunity to prove its potential as a quality service provider and to increase customer loyalty

The Service Encounter types of encounters: remote encounters, phone encounters, face-to- face encounters is an opportunity to: build trust reinforce quality build brand identity increase loyalty

A Service Encounter Cascade for an Industrial Purchase Sales Call Delivery and Installation Servicing Ordering Supplies Billing 4-10

Evidence of Service from the Customer’s Point of View Contact employees Customer him/herself Other customers Operational flow of activities Steps in process Flexibility vs. standard Technology vs. human People Physical Evidence Process Tangible communication Servicescape Guarantees Technology