Consumer Behaviour for Services

Unit-4

Consumer Buying Process

Need Recognition

Information Search

5 Stage Model of the Consumer Buying Process

Evaluation of Alternatives

Purchase Decision

Post-purchase Behavior

Need Recognition (awareness of need)

The buying process starts when the buyer recognizes a problem or need. The need can be triggered by internal ,external, marketing stimuli. Ex.- persons normal needs-hunger/ thrust rises to threshold level and becomes a drive.

Information search
An aroused consumer will be inclined to search for more information Internal search- memory. External search- if he needs more information. Friends and relatives (word of mouth); Marketer dominated sources; comparison shopping; public sources etc.

Contd..
Helps buyer find possible alternatives- i.e- the evoked set. ( brands that a buyer is aware of, and thinks
well of, when considering a purchase ; also called the Consideration Set).

Hungry- want to go out and eat, evoked set is Chinese food Indian food etc.

Evaluation of Alternatives Competitor brand information Consumer evaluation process 1. The consumer is trying to satisfy the needs. 2. The consumer is looking for certain benefits from the product solution. 3. The consumer sees each product as a bundle of attributes for delivering the benefits sought to satisfy these needs

Contd..
Attributes of interests to buyer : Cameras : picture, sharpness, size ,price Hotels: Location ,cleanliness, atmosphere, price If not satisfied with your choice then return to the search phase.

Purchase decision In evaluation stage the consumer form preferences among the brands In this phase-Choose buying alternative includes product, package, store, method of purchase , Incentives offered, out of stock, budget etc.

Consumer

Post-Purchase Evaluation-outcome:
Satisfaction or Dissatisfaction. Have you made the right decision? This can be reduced by warranties, after sales communication etc. Ex: After eating an Indian meal, may think that really you wanted a Chinese meal instead of Indian.

Consumer Behaviour Service Differences

Intangibility problem

Consumer involvement
Perceived Risk Sources of Information

Consumer Evaluation Processes for Services

Search Qualities attributes a consumer can determine prior to purchase of a product Experience Qualities attributes a consumer can determine after purchase (or during consumption) of a product Credence Qualities(Trustworthiness) characteristics that may be impossible to evaluate even after purchase and consumption

Continuum of Evaluation for Different Types of Products

Most Goods
Easy to evaluate

Most Services
Difficult to evaluate

High in search qualities

High in experience High in credence qualities qualities

Services - Decision Making Process

Need awareness Information search

Memory

Memory

Evaluation of service suppliers

Future Intentions

Evaluation Service delivery

Request service

Categories in Consumer Decision-Making and Evaluation of Services

Use of personal sources Perceived risk

Information Search

Evaluation of Alternatives
Evoked set Emotion and mood

Purchase and Consumption

Service provision as drama Service roles and scripts Compatibility of customers

Post-Purchase Evaluation
Attribution of dissatisfaction Innovation diffusion Brand loyalty

Consumer Categories in Decision-Making and Evaluation of Services

Information Search
Use of personal sources Perceived risk

Evaluation of Alternatives
Evoked set Emotion and mood

Values and attitudes

Manners and customs Material culture Aesthetics Educational and social institutions

Culture

Purchase and Consumption

Service provision as drama Service roles and scripts Compatibility of customers

Post - Purchase Evaluation

Attribution of dissatisfaction Innovation diffusion Brand loyalty

Key Issues for Decision Making

Who is involved in the decision making process? How long does the process take? What is the set of competing services from which consumers make their choice? What is the relative importance attached by decision makers to different elements of the service offer? What sources of information are used in evaluating competing service offers?

Maslows Hierarchy of Needs

Internal Satisfaction Selfactualisation Esteem Love Safety Physiological Experiment with ethnic cuisine

E.g -Meals

The respect of others Action for and from others Survival Satisfaction of basic hunger

A meal at the best restaurant in town

Social meal with friends and family Safe food from a reputable source
Food from any uncontaminated source

Information Sources
Previous personal experience Word of Mouth recommendation (WOM) Reference groups Media communications Internet sources

Evaluation of Alternatives
A process of choice reduction. Rules based approaches used. Critical attributes, average score of all attributes, or weighted attributes.

Perceived Risk
Factors affecting perceived risk: The level of tangible evidence Buyer involvement New purchase Personal risk tolerance Situational factors Legal safeguards

Discuss cultural differences with the following ..

Authenticity Caring Control Courtesy Formality Friendliness Personalization Promptness

Relationship marketing

Relationship marketing
Marketing designed to create, maintain, and enhance strong relationships with customers and other stakeholders.

Why is it important?
It costs five times as much to attract a new customer as it does to keep a current one satisfied. It is claimed that a 5% improvement in customer retention can cause an increase in profitability of between 25 and 85 percent depending on the industry. Likewise, it is easier to deliver additional products and services to an existing customer than to a firsttime buyer.

Six types of markets

1. 2. 3. 4. 5. 6. internal markets supplier markets recruitment markets referral markets influence markets customer markets

Customer Lifetime Value

Losing an existing customer means losing the entire revenue stream that customer represents not just that single encounter or sale.

Attracting, retaining and growing customers

Customer delivered value the difference between total customer value and total customer cost.
Value includes product, services, personnel and image value. Cost includes monetary, time, energy and psychic costs.

Customer satisfaction
The extent to which a product or services perceived performance matches a buyers expectations. What are expectations based on?
Past buying experiences Friends, family and other associates Information about the competition Promises made in marketing materials (your brand)

Customer loyalty & retention

Highly satisfied customers are:
Less price sensitive More likely to talk favorably about you More likely to refer you to others Remain loyal for longer

Growing share of customer

Increasing the share of the customers purchasing in your product category. Best way is through cross-selling
Getting more business from current customers by selling them additional or complementary services

Managing your customers

Relationship marketing is designed to create, maintain, and enhance strong relationships with profitable customers and other stakeholders. First need to define what your profit is on specific services