Love Lock 02
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Transcript of Love Lock 02
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 1
Chapter 2
Consumer Behavior in Service Encounters
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 2
Where Does the Customer Fit in aService Organization? (Fig. 2.1)
Consumers rarely involved in manufacture of goods but often participate in service creation and delivery
Challenge for service marketers is to understand how customers interact with service operations
Flowcharting clarifies how customer involvement in service encounters varies with type of process - see Fig. 2-1: People processing (e.g., motel stay): customer is physically involved
throughout entire process Possession processing (e.g., DVD repair): involvement may be limited to
drop off of physical item/description of problem and subsequent pick up Mental stimulus processing (e.g., weather forecast): involvement is
mental, not physical; here customer simply receives output and acts on it Information processing (e.g., health insurance): involvement is mental -
specify information upfront and later receive documentation of coverage
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 3
High-Contact and Low-Contact Services
High Contact Services
Customers visit service facility and remain throughout service delivery
Active contact between customers and service personnel
Includes most people-processing services
Low Contact Services
Little or no physical contact with service personnel
Contact usually at arm’s length through electronic or physical distribution channels
New technologies (e.g. Web) help reduce contact levels
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 4
Levels of Customer Contact with Service Organizations (Fig. 2.2)
Emphasizes encounters with service personnel
Emphasizes encounters with equipment
High
Low
Management Consulting
Car Repair
InsuranceMotel
Fast Food
Nursing Home
Airline Travel (Econ.)
Cable TV
Telephone Banking
HairCut
Good Restaurant
4-Star Hotel
Dry Cleaning
Retail Banking
Mail Based Repairs
Internet-basedServices
Movie Theater
• Internet Banking
Subway
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 5
Managing Service Encounters--1
Service encounter: A period of time during which customers interact directly with a service
Moments of truth: Defining points in service delivery where customers interact with employees or equipment
Critical incidents: specific encounters that result in especially satisfying/dissatisfying outcomes for either customers or service employees
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 6
Managing Service Encounters--2
Service success often rests on performance of junior contact personnel
Must train, coach, role model desired behavior
Thoughtless or badly behaved customers can cause problems for service personnel (and other customers)
Must educate customers, clarify what is expected, manage behavior
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 7
The Purchase Process for Services(Adapted from Fig. 2-3)
Prepurchase Stage
Awareness of need Information search Evaluation of alternative service suppliers
Service Encounter Stage
Request service from chosen supplier Service delivery
Postpurchase Stage
Evaluation of service performance Future intentions
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 8
Perceived Risks in Purchasing and Using Services (Table 2.1)
Functional – unsatisfactory performance outcomes
Financial – monetary loss, unexpected extra costs
Temporal – wasted time, delays lead to problems
Physical – personal injury, damage to possessions
Psychological – fears and negative emotions
Social – how others may think and react
Sensory – unwanted impacts to any of five senses
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 9
Factors that Influence Customer Expectations of Services (Fig. 2.4)
Predicted Service
Explicit & Implicit Service Promises Word-of-Mouth Past ExperienceDesired Service
ZONE OF
TOLERANCE
Adequate Service
Personal Needs
Beliefs about What Is Possible
Perceived Service Alterations
Situational Factors
Source: Adapted from Zeithaml, Parasuraman & Berry
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 10
Components of Customer Expectations
Desired Service Level: wished-for level of service quality that customer believes can and should be delivered
Adequate Service Level: minimum acceptable level of service
Predicted Service Level: service level that customer believes firm will actually deliver
Zone of Tolerance: range within which customers are willing to accept variations in service delivery
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 11
Intangible Attributes, Variability, and Quality Control Problems Make Services Hard to Evaluate
Search attributes – Tangible characteristics that allow customers to evaluate a product before purchase
Experience attributes – Characteristics that can be experienced when actually using the service
Credence attributes – Characteristics that are difficult to evaluate confidently even after consumption
Goods tend to be higher in search attributes, services tend to be higher in experience and credence attributes
Credence attributes force customers to trust that desired benefits have been delivered
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 12
How Product Attributes Affect Ease of Evaluation) (Fig. 2.5)
Source: Adapted from Zeithaml
Most Goods
High in search attributes
High in experience attributes
High in credence attributes
Difficult to evaluate
Easy to evaluate
Most Services
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Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 13
Customer Satisfaction is Central to the Marketing Concept
Satisfaction defined as attitude-like judgment following a service purchase or series of service interactions
Customers have expectations prior to consumption, observe service performance, compare it to expectations
Satisfaction judgments are based on this comparison Positive disconfirmation if better than expected Confirmation if same as expected Negative disconfirmation if worse than expected
Satisfaction reflects perceived service quality, price/quality tradeoffs, personal and situational factors
Research shows links between customer satisfaction and a firm’s financial performance
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 14
Customer Delight:Going Beyond Satisfaction
Research shows that delight is a function of 3 components
Unexpectedly high levels of performanceArousal (e.g., surprise, excitement)Positive affect (e.g., pleasure, joy, or happiness)
Is it possible for customers to be delighted by very mundane services?
Progressive Insurance has found ways to positively surprise customers with customer-friendly innovations and extraordinary customer service
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 15
A Service Business is a System Comprising Three Overlapping Subsystems
Service Operations (front stage and backstage)
Where inputs are processed and service elements created. Includes facilities, equipment, and personnel
Service Delivery (front stage)
Where “final assembly” of service elements takes place and service is delivered to customers Includes customer interactions with operations and other
customers
Service Marketing (front stage)
Includes service delivery (as above) and all other contacts between service firm and customers
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 16
Service Marketing System: (1) High Contact Service--e.g., Hotel (Fig. 2.7)
TheCustomer
TechnicalCore
Interior & ExteriorFacilities
Equipment
Service People
OtherCustomers
OtherCustomers
Advertising
Sales Calls
Market Research Surveys
Billing / Statements
Miscellaneous Mail, Phone Calls, Faxes, etc.
Random Exposure toFacilities / Vehicles
Chance Encounters with Service Personnel
Word of Mouth
Service Operations System
Backstage(invisible)
Front Stage(visible)
Service Delivery System Other Contact Points
Service Marketing System
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 17
Service Marketing System: (2) Low Contact Service--e.g., Credit Card (Fig. 2.8)
TechnicalCore
Self ServiceEquipment
Phone, Fax, Web site etc.
TheCustomer
Service Operations SystemService Delivery System Other Contact Points
Backstage(invisible)
Front Stage(visible)
Advertising
Market Research Surveys
Random ExposuresFacilities, Personnel
Word of Mouth
Service Marketing System
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 18
Service as Theater
“ All the world’s a stage and all the men and women merely players. They have their exits and their entrances and each man in his time plays many parts”
William Shakespeare
As You Like It
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 19
The Dramaturgy of Service Delivery
Service dramas unfold on a “stage”--settings may change as performance unfolds
Many service dramas are tightly scripted, others improvised
Front-stage personnel are like members of a cast
Like actors, employees have roles, may wear special costumes, speak required lines, behave in specific ways
Support comes from a backstage production team
Customers are the audience—depending on type of performance, may be passive or active
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 20
Role and Script Theories
Role: A set of behavior patterns learned through experience and communication
Role congruence: In service encounters, employees and customers must act out defined roles for good outcomes
Script: A sequence of behavior to be followed by employees and customers during service delivery
Some scripts (e.g. teeth cleaning) are routinized, others flexible Technology change may require a revised script Managers should reexamine existing scripts to find ways to improve
delivery, increase productivity, enhance experiences