AN ASSIGNMENT

ON

“CONSUMER BEHAVIOR
IN
SERVICES”

SUBMITTED BY:
SHAH PRATHMESH NIRANJAN
ROLL NO. : 81140
MBA-III (MARKETING)

SUBMITTED TO:
PROF. YOGESH RAUT

INSTITUTE OF BUSINESS MANAGEMENT

& RESEARCH, CHINCHWAD, PUNE-19

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 INTRODUCTION 
DEFINITION OF CONSUMER BEHAVIOR:

Consumer Behaviour can be defined as the decision-making process and physical activity
involved in acquiring, evaluating, using and disposing of goods and services.

THE SERVICES MARKETING TRIANGLE:

Company
(Management)

Internal External
Marketing Marketing

Enabling the promise Setting the promise

Employees Customers

Delivering the promise

Interactive
Marketing
 

Fig.1. The Services Marketing Triangle

The services marketing triangle consists of the company, its employees, and its
customers, forming the three angles of the triangle. In between the management of the
company and its employees lies the internal environment; whereas the environment between
the company and the customers is termed as the external environment.
In case of services, the maximum interaction happens in between the customers and
the employees as compared to the interaction between the company and the customers. Thus,
the interactive marketing in between the employees of the service providers and its customers
must be the most efficient and effective one.

CONSUMER DECISION PROCESS 

It is very important to understand the 5-step consumer decision process. The 5-steps are as
follows:
1. Need Recognition- The actual need is felt by the consumer in this step.
2. Information Search-The consumer searches for information available to him/her
through internal and external sources of information.
3. Pre-purchase Evaluation-The consumer evaluates various alternatives available to
him/her in this step.
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 4. Purchase-Finally, the consumer makes a purchase decision by buying the product.
5. Post-purchase Evaluation-Consumer uses the products and decides about its
performance, and/or seeks and evaluates the after sales services provided by the
company.

In the above 5-step decision making process, the consumer is influenced by a number of factors,
broadly they may be categorized as:
1. Individual Influences- Consumer Motivation; Consumer Knowledge and Behavioral
Learning; Information Processing; Demographics, Psychographics & Personality;
Intentions, Attitudes, Beliefs and Feelings.
2. Environmental Influences-Culture, Ethnicity & Social Class; Group, Family & Personal
Influences.

THE GOODS-SERVICES CONTINUUM:

Fig.2. Goods-Services Continuum

At the extreme left lie the goods which are easy to evaluate and possess high in search
attributes such as clothing, furniture, car, food items, etc. At the extreme right lie the services
which are easy difficult to evaluate and possess high in credence attributes such as PC
maintenance & repair, education, legal services, complex surgery, etc. In between lie most
goods and services which are high in experience attributes. Consumers evaluate these goods
and services based on their experience of usage or consumption of the product or services.

CUSTOMER EXPECTATIONS AND PERCEPTIONS OF SERVICE  

DIMENSIONS OF SERVICE QUALITY:

1. Tangibility: quality of attributes and physical evidence of service.
 Equipment is modern-looking.
 The physical facilities are visually appealing.
 Employees are neat appearing.
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  Materials associated with the service (such as pamphlets or statements) are visually
appealing.
2. Reliability: ability to perform the service dependably and accurately.
 Promises are kept.
 Problems are solved sincerely.
 Service is performed right the first time.
 Time commitments are honored.
 Error-free records.
3. Responsiveness: ability of service provider to respond to customer needs on a timely basis.
 Employees will tell customers exactly when services will be performed.
 Employees will give prompt service to customers.
 Employees will always be willing to help customers.
 Employees will never be too busy to respond to customers’ requests.
4. Assurance: employees’ knowledge, courtesy, and ability to instill confidence.
 The Behavior of employees will instill confidence in customers.
 Customers will feel safe in their transactions.
 Employees will be consistently courteous with customers.
 Employees will have the knowledge to answer customers’ questions.
5. Empathy: high level of attention to customers.
 Company will give customers individual attention.
 Company will have operating hours convenient to all their customers.
 Company will have employees who give customers personal attention.
 Company will have the customers at heart.
 The employees will understand the specific needs of their customers.

COMPONENTS OF CUSTOMER EXPECTATIONS:

There are 3 components of customers’ expectations of the services:
1. Desired Service Level: What they want
2. Adequate Service Level: What they are willing to accept
3. Predicted Service Level: What they believe they are likely to get.

ZONE OF TOLERANCE:
Zone of tolerance may be defined as that region that lies in between the adequate and the desired
service levels. The following points must be remembered regarding the zone of tolerance:
1. Customers do not notice service performance.
2. A customers desired service expectation is same for all service providers within a
category.
3. Adequate service expectation level varies for different firms within a category.
4. Zone of tolerance expands or contracts for a customer from time to time.
5. Zone of tolerance varies for different customers.
6. Zone of tolerance varies for service dimensions. E.g. unreliability will be least tolerated.
7. Zone of tolerance varies for first time & recovery service.

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FACTORS THAT INFLUENCE CUSTOMER EXPECTATIONS OF SERVICES:

PERSONAL NEEDS

EXPLICIT & IMPLICIT

DESIRED SERVICE SERVICE PROMISES;
WORD OF MOUTH;
PAST EXPERIENCE
BELIEFS ABOUT
WHAT IS POSSIBLE
ZONE

OF

PERCEIVED SERVICE
TOLERANCE
ALTERATIONS

ADEQUATE SERVICE PREDICTED

SERVICE

SITUATIONAL
FACTORS

Fig.3. Factors Influencing Customer Expectations of Services

In case of services, the various factors which influence the customer expectations of the
services may be explained through Fig.3 above.
For adequate service level, situational factors and perceived service alterations play an
important in influencing the customer. For desired service level, the personal needs of the
customers and his/her beliefs about what may possibly happen, play an important role.
Throughout the of service delivery process to the customers, the explicit & implicit
promises form the service provider, word of mouth publicity, past experience of the customer
and/or his friend, family or peers, and his own prediction about the services offered by the
service provider influences the behavior of the customer with respect to a particular service or a
particular service provider.

LATEST TREND IN THE SERVICE INDUSTRY FOR MAPPING CONSUMER BEHAVIOR 

1. It is very difficult to evaluate services which lie on the extreme right of the goods-services
continuum. However, we may predict the performance of the service provider and hence the
service offered by him. According to a US journal, the Hilton group of Hotels has implemented a
Psycho-analytical Performance & Feedback Management System. In this system the employees
of the service provider give weekly feedback to an expert Psychiatrist and Researcher, who rate
these feedbacks and give a quarterly update about the same to other employees and the top
management on a quarterly basis.
2. Due to the credit crunch and economic downturn, customers in the US are unable to pay huge
bills of their hotels/motels and restaurants. Hence, the service providers of Colorado & Michigan
State of USA, in these segments have joined hand to share their database of those blacklisted
candidates who have either not paid their dues or are bankrupt. In this way they may
prevent/restrict entry to a fraudulent/con customer.

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