What’s in the (1) PRE-PURCHASE STAGE of the buyer decision-making process.
AWARENESS OF NEED
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INFORMATION SEARCH - Define Need - Explore Solution - Identify Alternative Service Suppliers ↓
EVALUATION OF ALTERNATIVE SERVICE SUPPLIER
- Review documentation
- Consult with other people
- Visit possible service supplier
- Speak to Personnel
What’s in the (2) SERVICE ENCOUNTER STAGE of the buyer decision-making process.
Request Service from Chosen Supplier or Initiate Self-Service
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Service Delivery
What’s in the (2) POSTPURCHASE STAGE of the buyer decision-making process.
Evaluation of Service Performance
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Future Intentions
What are the Influence factors that affect buyers at each stage?
PRE-PURCHASE STAGE
- Perceived Risk
SERVICE ENCOUNTER
- Role & Script Theory
- Behaviour of other customers
- Perceived Control
- Emotions & Moods
POST PURCHASE STAGE
- Perceived Risk
What are the factors differences in ease of evaluation of goods and services?
Search Qualities
Experience Factor
Credence Qualities
Define and explain Search Qualities
Search Qualities are attributes which a consumer can determine prior to purchasing a product i.e., colour, style, price, fit, feel, comfort, hardness and smell
Good likes clothes have qualities like colour easily evaluated whereas most components of a vacation such as hotel, spas, tour guides do not have qualities which can easily be Googled.
Define and explain Experience Qualities
Experience Qualities can only be determined after the purchase or during consumption of the product i.e., taste, durability and satisfaction
A vacation in Bali has high Experience Qualities
Define and explain Credence Qualities
Credence Qualities occur when it may be impossible to evaluate even after purchase & consumption because consumer lacks the technical or specialist knowledge to determine whether the service performed was in fact necessary and well done
Example: Car repair
- Explain the Continuum of Evaluation of Different Types of Products, give examples and explain the implications for managers.
The Continuum of Evaluation goes from Easy to Evaluate to Difficult to Evaluate.
Products which are high in Search Qualities include clothing, furniture, cars.
Products and services which are high Experience Qualities include restaurant meals, vacations, manicures.
Services which are high in Credence Qualities include Computer repairs, legal services and medical surgery.
Based on the Continuum of Evaluation, what are the implications for marketing managers?
If high in search qualities:
- Provide comprehensive information that are easily accessible for customers
If low in search qualities and high in experience qualities:
- Enhance search qualities by providing customer reviews.
Increase word-of-mouth
During service encounter, increase value proposition through supplementary (supporting and facilitating) services
Example: Vacation in Bali
If high in credence qualities:
- Provide assurance to decrease perceived risk (providing certifications, guarantees, the background story of real estate agents)
What are 3 factors that can increase pre-purchase risk perceptions?
Inexperienced customers lack the knowledge and confidence to evaluate between service suppliers
Service dominated by experience and/or credence properties
High customer involvement in service
- What is the definition of Perceived Risk and why is it important for marketing managers?
Definition: Function of uncertainty and consequence which increases as the likelihood of negative outcomes and the degree of importance of these outcomes increase
Important for marketing managers to be able to reduce customers’ perceived risk and encourage them to purchase the service
Give an example of a surgery service at a hospital. If you are the marketer of the hospital, how can you decrease customers’ perceived risk of surgery?
Uncertainty-
Patient may have never undergone surgery before
Patient is not guaranteed that the surgery will end with a successful outcome
Consequences-
Poor decision regarding surgery could be life threatening
One way to decrease perceived risk of surgery by providing the background, certifications, and qualifications of the surgeon to increase customers’ trust.
What are the categories of Perceived Risk?
Financial Risk Functional/Performance Risk Physical Risk Psychological Risk Sensory Risk Social Risk Temporal Risk
Define Financial Risk and give an example.
Definition: Customers’ monetary loss if service fails
Example: Is the bank going to default during my investment / the time I deposit my money?
Define Functional/Performance Risk and give an example.
Definition: Uncertainty of whether the service will offer what is promised/expected
Example: Will UberFood deliver the correct Pidapipo ice cream that I order?
Define Physical Risk and give an example.
Definition: Possible damage/harm to customers/their possession
Example: Will the silicone burst if I do breast augmentation?
Define Psychological Risk and give an example.
Definition: Risk that service will not fit customers’ self-concept
Example: Will I enjoy the tour?
Define Sensory Risk and give an example.
Definition: Negative effects on 5 senses: sight, hearing, smell, touch, taste
Example: Will I like the taste of the coffee? Will the dentist hurt me?
Define Social Risk and give an example.
Definition:Refers to individual’s concern regarding opinions of others
Example: Will my friends like the this new haircut?
Define Temporal Risk and give an example.
Definition: Concerns regarding wasted time/delays
Example: Will I be wasting my time going to the concern rather than studying? Will I be able to wake up early to do the dawn tour?
How do consumption stages for goods and services differ? What are the implications for service marketers?
With goods, consumption stage is largely free from marketer’s influence
With services and its characteristic of inseparability, consumption stage can be influenced by marketers
Implications: Marketer can attempt to maximise value from the consumption
What are the 4 factors influencing evaluation of service encounter?
- Congruence with customer and service worker’s role and script.
- Behaviour of other customers.
- Perceived control of the service encounter.
- Mood state or emotions of customer and service worker.
Define Role & Script, explain the importance and give an example.
Role definition:
A set of behaviour patterns learned through experience and communication, to be performed by an individual in a certain social interaction in order to attain maximum effectiveness in goal accomplishment
Script definition:
A learned sequence of behaviour patterns that consumers and service providers follow during service transactions; can be modified via training and experience”
Role and script can ease the challenges of inseparability (to motivate customers to follow their role and script, as other customers affect service provision).
Example: Vacation in Bali
Government’s role: To control behaviour of Australians in Bali
Government’s script: Doing a campaign for Australians in Bali based on segments (bogans, all Australians, and all Australians travellers to Bali)
Bogans: Warning that there will be consequences if any rule in Bali is violated
All Australians: Bali is promoted as a sacred, cultural destination for honeymoon, meditation, and family vacations rather than partygoers
All Australian travellers to Bali: To respect local Balinese culture.
Explain Dramaturgy
Dramaturgy:
The service encounter can be seen as a theatrical drama.
Both the buyer and seller follow scripts
The stage is the location where the service encounter takes place
Some service personnel and customers may wear costumes
State the 5 stages of drama metaphor; explain how service provision applies these stages.
Auditioning of actors →Selection of service personnel
Rehearsing of roles
→Training of personnel
Scripting the performance
→Clearly defining the role
Setting the stage
→Creation of service environment
Deciding which are performed onstage and backstage
→Deciding which are performed in front of customers and in the back room
If you own a coffee shop, how will you do step 5 in the drama metaphor?
If I own a coffee shop, I will decide to attract customers with the coffee-making process that it will be performed in front of customers. Preparation of employees (wearing the costumes) and interaction with suppliers (in receiving the coffee beans) will be performed in the back room.
Explain Role Theory. How is it connected to the satisfaction of customers and service workers?
Role theory describes that each participant enacts certain role-playing behaviours that contribute to achieving the objective of the interaction
Satisfaction of customers and service worker is dependent on role congruence - how each party acts out their role
How might the behaviour of other customers affect the service experience. Provide an example.
A pair of customers in a quiet zone of a library have a loud conversation, which will distract other customeres and decreasing their satisfaction.
Define perceived control. How is it connected to the post-purchase evaluation of customers?
Define: Perceived Control is defined as the individual’s belief that he/she has the means to control the outcomes of a situation
Satisfaction of customer (and service worker) is dependent on their perceived control of the service encounter
In post-purchase evaluation, customers determine if they have future intentions of using the service again. For example,if they felt the service was adequately transparent in terms of information access, they would use it again.
Mention 2 things that marketer can provide to give customers a sense of control! Give example.
Timely, relevant information
Offering choices and the opportunity to participate in decision making
Example: FedEx’s practice of enabling customers to access order-taking, package tracking, information storage and billing information online
Mention 2 things that marketer can provide to give service workers a sense of control!
Timely, technical training/briefings
Reliable equipment and systems
Explain how Mood state or Emotions of customer and service worker affects the evaluation of a service encounter.
Customers in a good mood is likely to evaluate the service encounter more positively.
Affective Experience (valenced feeling state): Emotion and mood
How do emotions differ from moods? How does emotion effect customers’ evaluation?
Emotions:
(pervasive state of feeling; higher intensity) e.g., anger, fear, disgust, interest, shame, joy and surprise
normally associated with an event that stimulates them
Moods:
(temporary/transient state of feeling; mildly positive or negative)
Emotion affects evaluation:
The direction of the bias in evaluation is consistent with the polarity (positive or negative) of the emotion.
Mention 4 advantages of having customers in a positive mood!
Will tend to simplify decision making and therefore make quicker decisions
More obliging and therefore easier to serve
Service positive experience is enhanced
Greater satisfaction with service
How will a customer in a bad mood affects other customers? If you are serving a customer in a negative emotions, what will you do?
Emotional contagion:
-When another customer in a service establishment is cranky or frustrated, whether from problems with the service or from existing emotions unrelated to the service, his/her mood affects the provision of the service for all customers who sense the negative mood.
-I will problem source from public view. I will invite the upset customer to a more private place to talk it out and calm down the customer.
If you are opening a cafe, what will you do to manipulate emotion and mood? Mention and explain 3 tactics!
(1) Ambience and physical setting
- I will provide good music, calming-coloured interior
(2) Effective delivery
- I will ensure the food and beverage ordering, processing, and payment are simple and effective
(3) Happy employees
- I will encourage my employees to be motivated and happy in serving my customers
Provide two reasons why it is important to avoid getting customers in a negative mood during a service encounter.
Customers will consider more detail and therefore make slower decisions
Customers are likely to evaluate the service encounter more negatively than they would have under normal circumstances
Customers will be more conducive to arguing or unhelpful complaining
If there is a service failure, customers’ zone of tolerance will become even more narrow and they will be less satisfied with the service and any potential recovery