Mktm 3041– Service Marketing (A.

Y 2025/26)

CHAPTER TWO: CONSUMER BEHAVIOR IN SERVICES

Introduction
All of us buy different services for various reasons. One person may prefer to go to a restaurant
for good food while the other may opt for an exclusive restaurant, for status. One person may prefer to
read ‘Books’ early in the morning, while the other may prefer to read newspaper after coming back
from the office. There are women who don’t go to beauty parlors at all, whereas there are others
who go regularly. Similarly, there are many such examples telling us that people show different
behavior in buying and using different products and services.

The discipline of marketing which helps in developing a deeper insight in these behavioral
differences is called “Buyer Behaviour”. We have developed an appreciation that the meaning of
marketing orientation is that a firm should aim all its efforts at satisfying its customers. And to keep
customers satisfied it becomes essential to have a deeper knowledge regarding the behavior of the
buyer.
The primary objective of service producers and marketers is identical to that of all marketers: to
develop and provide offerings that satisfy consumer needs and expectations, thereby ensuring
their own economic survival. In other words, service marketers need to be able to close the customer gap
between expectations and perceptions. To achieve this objective, service providers need to
understand how consumers choose and evaluate their service offerings. Unfortunately, most of what
is known about consumer evaluation processes pertains specifically to goods. The assumption
appears to be that services, if not identical to goods, are at least similar enough in the consumer’s
mind that they are chosen and evaluated in the same manner.

Consumer Decision Making

The consumer’s decision to purchase or reject a product or service is the moment of final truth
for the marketer. It signifies whether the marketing strategy has been wise, insightful, and
effective, or whether it was poorly planned and missed the mark. Marketers are therefore
interested in the consumer decision-making process by which a consumer selects one alternative
amongst the lot available. The decision not to buy is also an alternative.
A more comprehensive purchase model suggested by Fisk, who divided the purchase behavior into
three distinct stages viz. Pre-consumption Phase, Consumption Phase (Service Encounter) and
Post-consumption Phase, as shown in the Figure below.
The first stage called the pre-purchase stage includes activities which take place before the actual
purchase decision. These activities are typically called, problem/need recognition, information
search on various alternatives and evaluation of alternatives to select the best of them. At this
stage, the individual recognizes a need or problem whose solution usually involves a potential
purchase. He searches for information from various sources-both internal and external and arrives at a
set of possible solutions – ‘The evoked set’.

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The Pre-purchase Process

1. Need Arousal (Trigger): The decision to use a service is triggered by need arousal.
Consumers are then motivated to find a solution.
2. Information Search: Need arousal leads to attempts to find a solution.
o Internal Search: Drawing on personal knowledge and memory.
o External Search: Seeking information from outside sources.
o The Evoked Set is the collection of products and brands a consumer considers,
derived from past experiences or external sources.
3. Evaluation of Alternatives: Alternatives must be evaluated before a final decision is
made. This includes an evaluation of predicted quality performance.
4. Service Expectations: Forming service expectations is a component of the pre-purchase
stage.
5. Purchase Decision: Possible alternatives are compared and evaluated, and the best option
is selected.
The second stage is called the Service Encounter or consumption stage. This arises if outcome of
the pre-purchase stage is a decision to buy a certain brand of service. In this stage the expectations
of the pre-consumption stage are compared with the actual service delivery. This stage is therefore
called the service encounter stage.
The Service Encounter is the period of time during which a customer interacts directly with the
service provider.
• Moments of Truth: Perceived quality is realized at the moment of truth, when the service
provider and the customer confront one another. Effective management of these
touchpoints is critical.

• Theatrical Metaphor: Service delivery can be viewed as a theatrical performance or

"staging," with Service Facilities (the setting) and Personnel (actors) performing a Role
and Script.

• Servuction System: This model helps understand the variations of interactions in the
service delivery process
Finally, the post-purchase stage, which results in a decision whether to purchase the same
service again or not. In this stage, the customer evaluates the service experience, leading to either
satisfaction or dissatisfaction.
The consumer compares their perceived performance of the service against their initial
expectations.
• Satisfaction: Perceived Performance >= Expectations
• Dissatisfaction: Perceived Performance =< Expectations
• Customer Delight: Unexpectedly high levels of performance are likely to lead to delight.

The reasons why people buy or the motives of buying can be put into three categories, namely:
buyers goals, wants and beliefs. As far as general intentions are concerned, people prefer to be
in good or positive conditions and not otherwise. They prefer to be rich and not poor,
entertained and not bored, clean and not dirty, healthy and not sick, fed and not starved etc. A

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more acceptable and positive condition gives rise to a vision which the consumer tracks in the
pattern of purchase for a better life.

Categories of Service Qualities: Service Attributes

Services differ from physical goods because they are typically intangible, perishable, inseparable,
and heterogeneous. Evaluating services is often more difficult than evaluating goods due to the
nature of their attributes that leads consumers to rely on different types of cues, or qualities, to
evaluate them.
• Search Qualities: Attributes that customers can determine before purchase. (e.g., type of
food, location, price of a restaurant).
• Experience Qualities: Attributes that customers can determine only after
purchase/consumption. (e.g., enjoyment of the food, atmosphere of a restaurant).
• Credence Qualities: Attributes that customers find impossible to evaluate confidently
even after purchase and consumption. (e.g., the hygiene of a kitchen, the healthiness of
cooking ingredients).
Quality Definition Example in Services
Category
Search Attributes a consumer can evaluate before The menu price at a restaurant, the hotel
Qualities purchase (like size, color, or price). location, or the résumé of a consultant.
Experience Attributes a consumer can evaluate only after The taste of the meal, the courtesy of the
Qualities purchase or during consumption. airline staff, or the wait time for a service
Credence Attributes a consumer finds difficult to evaluate The quality of a complex surgical procedure,
Qualities even after consumption because they lack the the competence of a legal defense, or the
necessary knowledge or expertise. long-term benefit of a financial advisor's
plan.
Note: Marketers of services high in experience or credence qualities must focus on managing
customer expectations and providing tangible evidence of quality (e.g., testimonials,
certifications, clean facilities).

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Role of Culture in Services

Culture is the set of values, beliefs, customs, and norms shared by a group of people, and it
fundamentally shapes how consumers perceive, evaluate, and interact with services.
Impact on Expectations and Values
• Time: In some cultures, punctuality is highly valued, while in others, a flexible, relaxed
approach to time is the norm (e.g., monochronic vs. polychronic cultures). This affects
expectations regarding service speed and waiting times.
• Individualism vs. Collectivism:
o Individualistic cultures (e.g., US, Western Europe) may expect personalized service
and quick, efficient transactions.
o Collectivistic cultures (e.g., many Asian and Latin American countries) may prefer
service that acknowledges the group/family and emphasizes relationship-building
(e.g., hospitality services).
• Uncertainty Avoidance: Cultures with high uncertainty avoidance (e.g., Japan, Germany)
prefer highly structured, reliable, and standardized services with clear policies and
guarantees. They are less tolerant of service failure.
Impact on Service Encounter and Communication
• Power Distance: In cultures with high power distance, consumers may show great
deference to service personnel (e.g., doctors, professors) and be less likely to complain or
question the service delivery.
• Communication: High-context cultures (e.g., China, Korea) rely on non-verbal cues and
context, expecting service staff to understand unspoken needs. Low-context cultures (e.g.,
Germany, US) rely on explicit, direct verbal communication.
Service marketers must perform cultural adaptation (or Glocalization) by modifying their
service models to align with local values and communication styles to ensure customer satisfaction.

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