10/16/14 1

Lecture 03: Chapter 04

Consumer Decision Process Issues in
Service Marketing
Presented By:
S.M. Monirul Islam
Senior Lecturer
Dept. of Business Admin.
NUB
10/16/14 S.M. Monirul Isl
am, DBA, NUB
2
Consumer Decision Process
Decision process of service consumer is a
three stage process that is used b the
consumers to make a service purchase
decision! inc"udes pre#purchase stage$
consumption stage and post#purchase
eva"uation stage%
10/16/14 3
Consumer decision process model
Stimu"us
Prob"em
&'areness
Informatio
n search
(va"uation of
a"ternatives
Choice
Post purchase
eva"uation
Pre#purchase stage
Consumption
stage
Post purchase
stage
10/16/14 4
The stimulus
Some independent factors that motivate
consumer to consider a service purchase% )ithout
an stimu"us consumers don*t to purchase an
service% Stimu"us can be c"assified into three
forms "ike commercial cue, social cue and
physical cue.
10/16/14 5

Commercial cue:
(vents or motivations that are provided b the
service marketer to consumers as a promotiona"
effort of the compan$ such as advertisement of a
universit to +SC appeared students%

Social cue:
(vents or motivations that obtained from the
individua"*s peer group or significant others$ "ike
'atching friend to get admission in ,-.%
10/16/14 6

Physical cue:
/he bio"ogica" functions of consumer*s bod
a"so motivate them to consider a service
purchase$ such as the tiredness of a trave"er
ma motivate him/her to consider of booking a
hote" room%
0rom these three sources consumers get
motivations to initiate a service purchase
decisions% so service marketers responsibi"it is
to create the stimu"us in the consumer*s
environment%
10/16/14 7
&fter receiving the stimu"us from different cues$
the ne1t step of consumer decision process is
prob"em a'areness% +ere the consumer
e1amines 'hether s/he has need or 'ant for the
particu"ar service% /he need ma be based on
shortage or unfulfilled desire.

Shortage:
/he need for the service as a resu"t of the
consumer not having that service$ "ike the +SC
appeared is not current" admitted in an
universit%
Problem Awareness
10/16/14 8

Unfulfilled desire:
/he need for the service as a resu"t of the
consumer is not satisfied 'ith the service
'hich he is no' consuming$ "ike the +SC
appeared student has a"read been admitted
in a universit but not satisfied 'ith its
education%
10/16/14
Information search
If the consumer recogni2e that s/he has a
prob"em either shortage or unfu"fi""ed desire
then s/he search information about a"ternative
services to so"ve his prob"em% /he
Information search can takes p"aces in the
form of Internal search and external
search.
10/16/14 10

Internal search:
Interna" search is the access of consumer*s o'n
memor about possib"e a"ternatives%

External search:
It invo"ves co""ections of ne' information about
possib"e a"ternatives from different sources
beond of the consumer*s o'n memor% In our
e1amp"e the student ma co""ect information
about different universities through campus visit$
ta"king friends/ seniors$ reading educationa"
maga2ines$ vie'ing -3C universit rating etc%
10/16/14 11
Evaluation of alternatives
4n the basis of the information co""ected from
both interna" and e1terna" source consumer
eva"uates the a"ternatives to se"ect
appropriate one% /he eva"uation can be non-
systematic or systematic.

Non-Systematic evaluation:
Simp" choosing an a"ternative b re"ing on
the fee"ings about that a"ternative%
10/16/14 12

Systematic evaluation:
Choosing among a"ternatives b using a set of
forma"i2ed steps to arrive at a decision% +ere 'e
can e1p"ain t'o sstematic approaches as
linear compensatory approach and
Lexicographic approach%
linear compensatory approach:
& sstematic mode" 'hich propose that
consumers create a score for each a"ternative
b mu"tip"ing the ratings of each attribute and
their importance and fina"" adding the score
together and se"ect that a"ternative 'hich score
is greater%
10/16/14 13
Lexicographic approach:
& sstematic mode" 'hich propose that
consumers consider each attributes to making
decisions starting 'ith the most important one
to ru"e out a"ternatives%
5et*s see ho' the +SC appeared student
eva"uate different universities b these t'o
approaches%
Attributes
Alternative universities
NUB AUB S!U AMBAN Importance
Weight
A"a#$mi"
%$&u'a'ion
10 10 8 7.5 10
(ui'ion )$$
.5 9
A#mission
%$*uir$m$n's
10 10 10 8
+o"a'ion
8 7
Linear compensatory approach:
NU! ,10-10./,-./,,10-8./,-7.0324
"U! ,10-10./,.5-./,,-8./,8-7.0313.5
SEU! ,8-10./,-./,,10-8./,-7.0304
#IU! ,7.5-10./,-./,,10-8./,-7.0299
10/16/14 15

Lexicographic approach:
1% &cademic 6eputation 7 ,-./&-.
8% /uition 0ee7 &-.
In this approach customer starts 'ith most
important attribute and on the basis of it
e"iminates "o' scored a"ternatives against
each attributes%
10/16/14 16
Consumption stae

.uing

-sing

Disposing
Post purchase stage
(va"uate purchase decision in compare to
e1pectation%
10/16/14 17
!pecial consi"eration in pre#purchase stae

Perceived risk
Perceived risk is associated 'ith t'o dimensions
$% Conse&uence: /he degree of importance or d
anger of the outcomes derived from an consumer
decision
'% Uncertainty: /he possibi"it of occurrence of these
outcome
Ma9or tpes of perceived risks!
# 0inancia" risk
# Performance risk
# Phsica" risk
# Socia" risk
# Pscho"ogica" risk
10/16/14 18
!pecial consi"eration in pre#purchase stae$$%

6isk and standardi2ation

Co producer risk

Information and risk

# Search attributes
# (1perience attributes
# Credence attributes
10/16/14 1
!pecial consi"eration in pre#purchase stae$$%

.rand "oa"t
.rand "oa"t is greater 'hen a"ternatives are fe'$
and s'itching$ search etc costs are high%

Persona" source of information

0e'er a"ternatives to consider

# (ach provider offer on" one brand
# (voked set is narro'
# 5ack of avai"ab"e information

Se"f service as a viab"e a"ternative