Consumer Behavior in Services

Search, Experience and Credence Properties

• Search qualities• Attributes that a consumer can determine before

purchasing a product• Color, style, price, fit, hardness, smell• Experience qualities• Attributes that can be discerned only after

purchase or during consumption• Vacations, meals• Credence qualities• Characteristics that the consumer may find

impossible to evaluate even after purchase and consumption

• Legal services, TV repair, Auto repair, Medical diagnosis

Continuum evaluation for different types of products

Stages in consumer decision making process

Need Recognition

Information Search

Evaluation of Alternatives Purchase

Information Search

Consumer Experience

Post experience evaluation

Information Search

• Non - Personal sources

• Personal sources

• Use of Personal sources higher

• Capabilities of Mass and selective media can convey experience quality

• Limited non personal sources

• Many service provider are local and independent

• Influence of word of mouth

Perceived risk

• Higher • Non standardized nature• Warranties and guarantees• Lack of knowledge possessed by

customers (technical/ specialized)• Over come strategies• Guarantees, more tangible (UPS, FedEx), • Offering free or reduced cost trail

Evaluation of Alternatives

• Limited alternatives (Saloon, Banks) as Single brand in offer

• Proximity of service provider

• Difficulty of obtaining pre purchase information

• Internet’s role: airlines, hotels

• Performing themselves or out sourcing

Service Purchase

• Goods fully produced before purchase• Purchased and produced simultaneously• E.g: restaurant• Pay partly/ fully before produced• E.g: vacation, construction, long term

contracts• Inherent risk minimize strategies• Free/ deeply discounted service• Service level agreements

Consumer Experience

• Services as processes• - sequence of steps, actions e.g medical care• Service performances: Walt Disney, circus,

drama • Service roles (air hostess, waiter) and scripts

(logical sequence of events expected by a customer)

• Compatibility of service customer: over crowding, behavior, beliefs

• Customer co production: education, outsourcing, consulting

Post Experience Evaluation

• Word of mouth communication• Attribution of dissatisfaction• Positive or negative biases

– Remembrance, influence, weightage – +ve bias for service

• Brand loyalty– Depends on cost of changing brand (switching cost)– Availability of substitutes– Social ties to the company – The perceived risk associated with the purchase– Satisfaction obtained in the past