CUSTOMER

EXPECTATIONS

July 10, 2017

AND

MS 215 SM
PERCEPTIONS
1
 Customer Expectations and
Perceptions

July 10, 2017

Satisfaction is the level of a customer felt state
resulting from comparing a product or service’s
perceived performance standard against

MS 215 SM
customer’s expectations

2
 Understanding Customers’
Service Expectations
• Customers evaluate service quality by comparing what they expect
against what they perceive

July 10, 2017

• Situational and personal factors also considered

• Expectations of good service vary from one business to another,

MS 215 SM
and among differently positioned service providers in the same
industry
• Expectations change over time
• Example: Service Perspectives
• Parents wish to participate in decisions relating to their children’s
medical treatment for heart problems
• Media coverage, education, the Internet has made this possible
3
Disconfirmation of
expectations (Oliver 1980)

July 10, 2017

MS 215 SM
4
 Frequently Asked Questions
About Customer Expectations

• Should a company aim to ‘delight’ the customer?

July 10, 2017

• How does a company exceed customer service
expectations?

MS 215 SM
• Do customer service expectations continually
escalate?
• Is it a better strategy to under-promise and over-
deliver?
• How does a service company stay ahead of
competition in meeting customer expectations? 5
Possible Levels of Customer
Expectations

July 10, 2017

MS 215 SM
6
 Factors Influencing Customer
Expectations of Service

Explicit & Implicit

Personal Needs Service Promises
Word-of-Mouth
Desired Service Past Experience
Beliefs about
What Is Possible
ZONE
OF
TOLERANCE
Perceived Service
Alterations
Adequate Service Predicted Service

Situational Factors

Source: Adapted from Valarie A. Zeithaml, Leonard A. Berry, and A. Parasuraman, “The Nature and Determinants of Customer Expectations of
Service,” Journal of the Academy of Marketing Science 21, no. 1 (1993): pp 1–12.
MS 215 July 10, 2017
 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

MS 215 July 10, 2017

 Understanding Customer
Requirements

July 10, 2017

Satisfaction levels of customer change when
a)Change in customer’s expectations

MS 215 SM
b)Performance of service provider

9
 Customer Expectations
• Based on Customer’s experience with product or
service.

July 10, 2017

• Feedback received from friends, colleagues and relatives.
• Based on present needs.
There are five dimensions regarding service outcomes

MS 215 SM
a)Assurance
b)Empathy
c)Reliability
d)Responsiveness
e)Tangibles
10
 Types of Service
Expectations
a) Desired Service-Service that customer desires and

July 10, 2017

hope to receive
b) Adequate Service-Minimal level of service that
customer is willing to accept from service provider

MS 215 SM
c) Predicted Service-Service level between desired and
adequate service and lies in zone of tolerance
d) Zone of tolerance- Gap between customer’s desired
service and adequate service expectations. Zone of
tolerance is based upon reliability of service. Zone of
tolerance is narrow when customer has different
alternatives available. 11
 Factors influence Customer
Expectations of Desired Service
• Customer needs and Enduring Service influence customer
expectations of desired service:-

July 10, 2017

• Customer needs-Abraham Maslow’s
Hierarchy of Needs Desired

MS 215 SM
Enduring Service Service
a) Physiological Needs Intensifiers
b) Safety Needs Zone
of
c) Social Needs Tolerance
d) Esteem Needs Personal Needs
Adequate
e) Self Actualization Needs Service

12
 Four types of customers based
on expectations
• Economizing Customer
• Pricing is important
• Ethical Customer
• Social & environmental responsibility is important
• Personalizing Customer
• Recognition & conversation is important
• Convenience Customer
• Fast service is important
• Firms need to consider ways to design products/services
to appeal to customer classifications.

July 10, 2017 13

Enduring service intensifiers are of two types:-
a) Derived service expectations influenced by

July 10, 2017

expectations of those who are dependent on
customer to provide with good service

MS 215 SM
experience
b) Customer’s philosophy has to do with
customer’s attitude and service provider’s
conduct

14
 Factors that Influence
Adequate Service

Transitory Service

July 10, 2017

Intensifiers

Desired

MS 215 SM
Perceived Service Service
Alternatives
Zone
of
Tolerance
Self-Perceived
Service Role Adequate
Service

15
Situational
Factors
 Factors that influence Customer’s
Expectations of Adequate Service
1. Transitory service intensifiers :-which intensify or heighten
level of adequate service expectations of customers. Factors
include personal emergencies, failure of service provider to

July 10, 2017

provide proper service first time, factors which push customer to
take service.
2. Perceived alternatives:- include customers perceptions of

MS 215 SM
available alternatives that offer similar service .Customers have
adequate knowledge about alternatives required to fulfill
demand
3. Situational factors-Customer compromises on service
expectations if he know service are not under service provider’s
control
4. Predicted service-level of service a customer believes he will
receive from service provider 16
 Experiencing the Service
• The service purchased by the customer may be a high
touch or a low touch service. High touch services are like
hair styling service where the customer has substantial
contact with the service provider. On the other hand, low

July 10, 2017

touch service is like the automatic teller machine (ATM)
service where there is little contact with service employees.

MS 215 SM
• All services are delivered during the moments of truth, i.e.
the moments when a customer comes in contact with
service personnel. The customer must be satisfied or
delighted by the service personnel during these moments
of truth. As discussed elsewhere, service personnel must be
able to understand the needs of the customers and be able
to meet them promptly if they are to satisfy their
17
customers at the moment of truth.
 Factors that Influence
Desired and Predicted Service

Explicit Service

July 10, 2017

Promises

Implicit Service

MS 215 SM
Promises

Desired Word-of-Mouth
Service

Zone
Past Experience
of
Tolerance
18
Adequate Predicted
Service Service
 Factors that influence both Desired and
Predicted Service Expectations
• Explicit service promises-Statements made in which he
explicitly promises certain level of service

July 10, 2017

• Implicit service promises-Tangible clues to customer
which gives clue how service will be
• Word of mouth publicity

MS 215 SM
• Past experience

19
 Criteria to Evaluate Service based
on Customer’s Service Expectations

July 10, 2017

• Speed
• Certainty
• Ease

MS 215 SM
• Personal recognition

20
 Managing Customer Service
Expectations
• Managing promises

July 10, 2017

• Reliability-Getting it right first time
• Effective communication

MS 215 SM
21
 Exceeding Customer Service
Expectations
• Reliability of service delivery
• Competence of service

July 10, 2017

• Courtesy of service
• Commitment of service

MS 215 SM
22
Customer Perceptions in

July 10, 2017

Services

MS 215 SM
23
 Customer Perceptions of Service

• Customer Perceptions

July 10, 2017

• Customer Satisfaction
• Service Quality

MS 215 SM
• Service Encounters: The Building Blocks for
Customer Perceptions

24

4-24
 Consumer Perceptions of Service

• Provide a solid basis for understanding what influences

customer perceptions of service and the relationships among
customer satisfaction, service quality, and individual service

July 10, 2017

encounters.
• Demonstrate the importance of customer satisfaction—what

MS 215 SM
it is, the factors that influence it, and the significant outcomes
resulting from it.
• Develop critical knowledge of service quality and its five key
dimensions: reliability, responsiveness, empathy, assurance,
and tangibles.
• Show that service encounters, or the “moments of truth” are
the essential building blocks from which customers form their
perceptions. 25

4-25
 The customer is . . .
Anyone who receives the company’s services, including:
• external customers (outside the organization, business

July 10, 2017

customers, suppliers, partners, end consumers)

• internal customers (inside the organization, e.g., other

MS 215 SM
departments, fellow employees)

26

4-26
Customer Perceptions of Quality and
Customer Satisfaction

July 10, 2017

MS 215 SM
27

4-27
 Factors Influencing
Customer Satisfaction
• Product quality
• Service quality

July 10, 2017

• Price
• Specific product or service features

MS 215 SM
• Consumer emotions
• Attributions for service success or failure
• Perceptions of equity or fairness
• Other consumers, family members, and
coworkers
• Personal factors 28
• Situational factors
4-28
 Outcomes of Customer
Satisfaction
• Increased customer loyalty

July 10, 2017

• Positive word-of-mouth communications
• Increased revenues
• Increased return to shareholders

MS 215 SM
29

4-29
 Customer Perceptions
Customer Perception is based upon
a) Service Delivery

July 10, 2017

b) Service Quality
c) Customer Satisfaction

MS 215 SM
30
 Factors that influence Customer
Perceptions
• Service Encounter-Quality of service through interaction
with service provider

July 10, 2017

• Service Evidence
a) Personnel
b) Process

MS 215 SM
c) Physical Environment
• Image
• Price

31
 Strategies for influencing
Customer Perceptions
• Enhance customer satisfaction through service
encounters

July 10, 2017

• Reflect evidence of service
• Communicate and create realistic image
• Enhance Customer perceptions of Quality and Value

MS 215 SM
through pricing

32
Customer Perceptions and
Satisfaction

July 10, 2017

MS 215
 MS 215 SM July 10, 2017
34