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UTM - University Technology, Mauritius

• Service Encounter Presentation by Dr. Jeynakshi Ladsawut

• Department of Tourism and Leisure Studies

• Focus on Sustainable Development Goals

Learning Outcomes

• Topics Covered:

  • 3-Staged Consumption Model

  • Risks

  • Disconfirmation Theory

  • Servuction Model

Customer Decision Making

Three Stages of Service Consumption:

1. Pre-purchase Stage

2. Service Encounter Stage

3. Post-Encounter Stage

Pre-Purchase Stage

• Customers seek solutions to their needs.

• Evaluation can be complex and uncertain, increasing perceived risk.

• Strategies for risk reduction include:

  • Understanding customer expectations

  • Analyzing components of customer expectations

  • Making informed purchasing decisions

Stages of Service Consumption

• Awareness of Need: Recognizing the requirement for a service.

• Information Search:

  • Clarifying needs

  • Exploring potential solutions

  • Identifying alternative service products and suppliers

• Evaluation of Alternatives:

  • Reviewing supplier information via ads, websites, and third-party reviews

  • Discussing options with personnel and peers

  • Making decisions regarding the service purchase and reservations

• Key Concepts:

  • Need Arousal

  • Evoked Set

  • Consideration Set

  • Multi-attribute Model

  • Perceived Risk

  • Formation of Expectations

Need Arousal

• Triggers include:

  • Unconscious minds (personal aspirations)

  • Physical conditions (hunger, etc.)

  • External influences (marketing activities)

• Need arousal motivates consumers to search for solutions.

Information Search

• Evoked Set: Products and brands considered based on past experiences and external sources.

• Consumers evaluate alternatives before making decisions.

Evaluation of Alternatives

Three Types of Attributes

• Search Attributes:

  • Evaluated before purchase (e.g., food type, location)

• Experience Attributes:

  • Evaluated during or after purchase (e.g., service quality)

• Credence Attributes:

  • Cannot be easily evaluated even post-consumption (e.g., hygiene)

Products and Services Evaluation

• Examples of items with varying attributes:

  • High in Search Attributes: Clothing, foods

  • High in Experience Attributes: Restaurant meals, entertainment

  • High in Credence Attributes: Legal services, health-related procedures

Perceived Risks in Services

• Types of risks include:

  • Functional - Unacceptable performance outcomes

  • Financial - Unexpected costs, monetary loss

  • Temporal - Wasted time, delays

  • Physical - Personal injury, damage

  • Psychological - Fears, negative emotions

  • Social - Reactions from others

  • Sensory - Negative impacts on senses

Handling Perceived Risks

• Seek information from trusted sources

• Compare service offerings and research reviews

• Trust reputable firms and seek guarantees

• Conduct trials or visit service providers before purchase

Strategic Responses to Manage Perceived Risks

• Offer trials for services with high experience attributes.

• Use evidence management to enhance tangible cues.

• Provide guarantees and encourage visits to service facilities.

Understanding Customer Expectations

• Customers evaluate quality by comparing expectations with perceptions.

• Factors influencing customer expectations

  • Desired service

  • Adequate service level

  • Predicted service level

  • Zone of Tolerance: acceptable range of service delivery variations

Components of Customer Expectations

• Desired vs. adequate vs. predicted service levels.

• Formed by:

  • Explicit & Implicit Service Promises

  • Word-of-Mouth

  • Past Experience

  • Situational Factors

Purchase Decision

• Triggered by need arousal - comparing alternatives

• Decision is straightforward with low perceived risks but complex with many trade-offs

Service Encounter Stage

• Defined as direct interaction between customer and provider.

• Key Concepts:

  • Moments of Truth

  • Service Encounters

  • Servuction System

• Service delivery ranges from high to low contact levels

Service Encounter Models

• Importance of managing touchpoints

• High/Low Contact Model - nature and extent of interactions

• Servuction Model - variations of interactions

• Theater metaphor - service performance staging

Stages of Service Consumption

• Post-Encounter Stage:

  • Involves performance evaluation and future intentions

  • Key concepts:

    • Confirmation/disconfirmation of expectations

    • Satisfaction levels: dissatisfaction, satisfaction, delight

    • Service quality and word-of-mouth influences

    • Loyalty and repurchase intentions.

Customer Satisfaction

• Based on the comparison of expectations vs. actual performance.

• Customer satisfaction outcomes can be:

  • Positive Disconfirmation - exceeding expectations

  • Confirmation - meeting expectations

  • Negative Disconfirmation - below expectations

Customer Delight

• Factors contributing to delight:

  • Unexpectedly high performance levels

  • Positive emotional responses (surprise, happiness)

• Links between customer satisfaction and corporate performance - creating customer value leads to increased firm value.

Summary

• Key steps in service consumption include:

  • Need Arousal

  • Information Search

  • Evaluation of Alternatives

  • Purchase Decision

• Importance of managing touchpoints throughout the service experience to ensure satisfaction and address perceived risks.

Discussion Question

• Explain the servuction system using an organization model, the significance of perceived risks in service consumption, and outline the three-stage model of service consumption.