Unit 2

Consumer
Behavior in A
Service Context
 Contents

 The Three-Stage Model of Service Consumption

Pre-purchase Stage
Service Encounter Stage
Post-Encounter stage

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Opening Case: L.L. Bean

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 The Three-Stage Model of Service
Consumption

Pre- Service Post-

purchase Encounter Encounter
Stage Stage Stage

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 Pre-purchase Stage

Need Awareness

Information
search

Evaluation of
Alternative Service

Purchase
Decision

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 Pre-purchase Stage
Step 1: Need Awareness
When a person or organization decides to buy or use a
service, it is triggered by an underlying need or need
arousal. Needs may be triggered by:
People’s unconscious minds (e.g., personal identity and
aspirations)
Physical conditions (e.g., Susan Munro’s hunger drove
her to Burger King.)
External sources (e.g., social media or a service firm’s
marketing activities).
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 Pre-purchase Stage
Step 2: Information Search
Once a need has been recognized, customers are
motivated to search for solutions to satisfy that need.
Sources of information include:
Internal source
External source

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 Pre-purchase Stage
Step 3: Evaluation of Alternative Services
Consumers search for information and evaluate different
alternatives. Consumers often use multi-attribute model.
Multi-attribute model: holds that consumers use
service attributes that are important to them to
evaluate and compare the alternative offerings of firms
in their consideration set. Each attribute has an
importance weight. A higher weight means that the
attribute is more important.

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 Pre-purchase Stage
Example: Choosing a dry cleaner

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 Pre-purchase Stage
Three Main Types of Service Attributes:
(1) Search attributes are tangible characteristics
customers can evaluate before purchase.
(2) Experience attributes are those that cannot be
evaluated before purchase.
(3) Credence attributes are characteristics that
customers find hard to evaluate even after
consumption.
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Pre-purchase Stage

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 Pre-purchase Stage
Types of Perceived Risk:
1 • Functional (unsatisfactory performance outcomes)

2 • Financial (monetary loss, unexpected costs)

3 • Temporal (wasting time, consequences of delays)

4 • Physical (personal injury or damage to possessions)

5 • Psychological (personal fears and emotions)

6 • Social (how other thinks and react)

7 • Sensory (unwanted effects on any of the five senses)

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 Pre-purchase Stage
Service Expectation:
Expectations are
formed during the
search and decision-
making process, and
they are heavily shaped
by information search
and evaluation of
alternatives.

Factors influencing customer

expectations from the service
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 Pre-purchase Stage
Step 4: Purchase Decision
 After consumers have evaluated possible alternatives by
comparing the performances of competing service
offerings, assessing the perceived risk associated with
each offering, and developing their desired, adequate,
and predicted service-level expectations, they are ready
to select the option they like best.
 Purchase decision may be affected by others and
environmental factors.

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 Service Encounter Stage

 The service encounter stage

involves the direct interaction of
the customer with the service firm.
We use a number of models and
frameworks to understand the
consumers’ behavior and
experience during the service
encounter.
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 Service Encounter Stage
 A moment of truth
(MOT): is the moment
when a customer
interacts with a brand,
product or service to
form or change an
impression about that
particular brand,
product or service.

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 Service Encounter Stage
Levels of customer contact:
 High-contact Services: there is direct contact
between customers and the firm throughout the
service delivery process.
 Low-contact Services: involve little physical
contact between customers and service providers.

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 Service Encounter Stage
Levels of customer contact:

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 Service Encounter Stage
The Servuction System:

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 Service Encounter Stage
The Servuction System:
 Customers interact with the service environment,
service employees, and even other customers who are
present during the service encounter. Each type of
interaction can create value (e.g., a pleasant
environment, friendly and competent employees, and
other customers who are interesting to observe) or
destroy value (e.g., another customer blocking your
view in a movie theater).

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 Service Encounter Stage
Viewing the service encounter as a form of theater
 Role Theory
Employees must perform their
roles with reference to
customer expectations to
reduce the risk of dissatisfying
customers. Likewise, the
customer must “play by the
rules” to avoid causing
problems for the firm, its
employees, and even other
customers.

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 Service Encounter Stage
Viewing the service encounter as a form of theater
 Script Theory
Like a movie script, a service script
specifies the sequences of behavior that
employees and customers are expected to
learn and follow during service delivery.
While employees receive formal training,
customers learn scripts through
experience, communication with others,
and designed communications and
education.

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 Service Encounter Stage
Viewing the service encounter as a form of theater

 Perceived Control Theory

Holds that customers have a need for control during
the service encounter. The higher the level of perceived
control during a service situation, the higher will be
their level of satisfaction.
 Behavioral control
 Decisional control
 Cognitive control
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 Service Encounter Stage
 Behavioral control: allows the customer to change the
service situation by asking the firm to customize its
typical offerings (e.g., asking front-line employees to
make special arrangements for a romantic candlelight
dinner).
 Decisional control: means that the customer can
choose between two or more standardized options
without changing either option (e.g., choosing between
two tables at a restaurant)

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 Service Encounter Stage

 Cognitive control: is exercised when the customer

understands why something is happening (e.g., the
flight will be delayed because there is a technical
problem with the aircraft) and knows what will
happen next (also called predictive control; e.g.,
knowledge of how long the delay will be).

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 Post-Encounter stage
 Post-Encounter stage involves consumers’ attitudinal and
behavioral responses to the service experience. These
include customer satisfaction, service quality perceptions, and
customer loyalty.

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 Post-Encounter stage
 Customer Satisfaction: a measure of how products
and services supplied by a company meet or surpass
customer expectation.

The expectancy-disconfirmation
model of satisfaction 27/30
 Post-Encounter stage
 Service Quality: a high standard of performance that
consistently meets or exceeds customer expectations.
 SERVQUAL: is often used to measure service quality

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 Post-Encounter stage
 Customer loyalty: is a customer’s willingness to
continue patronizing a firm over the long term,
preferably on an exclusive basis, and recommend the
firm’s products to friends and associates.

Example: Ritz-Carlton Hotel

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