UNIT-3 Customer Perception of Services

1. Perception:
- Perception is the process by which an individual selects, organizes and interprets information received from the
environment.
 Transaction Vs. Cumulative/Overall Perception:
- Based on the consumer experience there are 2 type of perception that are single/transactional perception and
overall/ cumulative perception.
- Single Transactional perception are base on the specific moment of time or each encounter whereas the
cumulative/overall perception are the sum of the all the specific moment or collective encounter.
- Ex: If a customer evaluates how he is treated as the member of a club at a specific transaction and overall
perception is formed when he evaluates as a member of not only by the staff, but also other member and the other
non members.
- Both kind of perception are essential for services to be better marketed, because both complement each other.
- Understanding perceptions on transactional/single encounter is essential to identify critical issues and make instant
change.
- And the overall perception evaluation helps marketers to predict overall loyalty.

2. Meaning & Outcomes of Customer Satisfaction

- Satisfaction is the customer’s fulfillment response.
- In simple, satisfaction is customer’s evaluation of the product or service in terms of whether that product or
service has met customer’s needs and expectation.
- Satisfaction can be viewed as: fulfillment (one’s need has been met); feelings (dependent on context and or type of
service); pleasure (passive response associated with service [they do not think a lot about/receive routinely
overtime]); pleasure (giving sense of happiness); when makes surprise becomes delight & when removes negativity/
uncertainty becomes relief; ambivalence mix of positive and negative experience.
- Satisfaction is measured in a point of time but satisfaction itself is dynamic can be varied in different context and
time.
- Most of people term quality and satisfaction interchangeably.
- But researcher has attempted to measure more precisely about meaning and measurement of 2 concepts.
- Generally satisfaction is viewed as broader concept whereas quality focuses on specific dimension.
- Based on the view perceived service quality is component of customer satisfaction.
- Service quality is a focused evaluation that reflects the customer’s perception of: reliability, responsiveness,
assurance, empathy and tangibility.
- Satisfaction is more inclusive; it is influenced by perception of service quality, product quality, and price as well as
situational factors and personal factors.
- Ex:

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a. Customer Perceived Value?
- Our argument is that customers will buy from the firm that they see as offering the highest perceived value.
- Customer perceived value (CPV) is the difference between the prospective customer’s evaluation of all the
benefits and all the costs of an offering and the perceived alternatives.
- Total customer value is the perceived monetary value of the bundle or economic, functional, and psychological
benefits customers expect from a given market offering. Total customer cost is the bundle of costs customers
expect to incur in evaluating, obtaining, using, and disposing of the given marketing officering.
b. Customer perceived value & Satisfaction:
- If Benefits > Costs = Positive Customer perceived value → Satisfaction
- If Benefits < Costs = Negative Customer perceived value → Dissatisfaction
c. Determinants of Customer Perceived Value:
- In Service

3. Service Quality Process & Dimensions

- Service quality, a critical element of customer perception.
- In the case of pure services (e.g., health care, financial services, education), service quality will be the dominant
element in customers’ evaluation.
- But in case in which customer service or services are offered in combination with a physical product (e.g., IT,
Auto), service quality may also be very critical in determining customer satisfaction.
a. Service Quality Dimensions
- Researcher suggests that customers do not perceive quality in a unidimensional way but rather judge quality based
on multiple factors relevant to the context.
- The dimensions of service quality have been identified through the pioneering research of Parsu Parsuraman,
Valarie Zeithalm, and Leonard Berry.
- Their research identified five specific dimensions of service quality that apply across a variety of service contexts.
 Reliability: Delivering on Promises:
- Reliability is defined as ability to perform the promised service dependably and accurately.
- In its broadest sense, reliability means that the company delivers on its promises-promises about delivery, service
provision, problem resolution and pricing.
- Customers want to do business with companies that keep their promises, particularly their promises about the
service outcomes and core service attributes.
 Responsiveness: Being willing to help
- Responsiveness is willingness to help customers & to provide prompt service which emphasizes attentiveness &
promptness in dealing with customer requests, questions, complaints and problems.
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- It is communicated to customer by the length of time they have to wait for assistance, answer to questions or
attention to problems.
- It also captures the notion of flexibility & ability to customize the service to customer need.
- To excel on the aspect of responsiveness, a company must view the process of service delivery and the handling of
request from the customers’ point of view rather than from the company’s point of view.
 Assurance: Inspiring Trust & Confidence
- Assurance is defined as employees’ knowledge & courtesy and the ability of the firm & its employee to inspire
trust & confidence.
- It is likely to be particularly important for services that customer perceives as high risk or for services of which
they feel uncertain about their ability to evaluate outcomes.
- Ex: banking, insurance, brokerage, medical & legal services.
- Trust and Confidence may embodied in the person who links the customer to the company, then the company
seeks to build trust & loyalty between key contact person and individual customer.
- The “personal banker” concept captures this idea. Customers are assigned to a banker who will get to know them
individually and who will coordinate all their banking services.
- In other context, trust & confidence are embodied in organization itself through marketing communication taking
beyond traditional reliability message to focus on assurance & trust.
 Empathy: Treating Customer as Individual
- Empathy is the caring individualized attention that the firm provides its customer.
- The essence of empathy is conveying through personalized & customized service that customer are unique &
special and that their need are understood.
- Customer wants to feel understood by and important to firms that provide service to them.
 Tangibility: Representing the Service Physically
- Tangibility is the appearance of physical facilities, equipment, personnel and communication materials.
- Tangibles provide physical representations or images of the services that particularly new customer will use to
evaluate quality.
- Tangibles are often used by service firm to enhance their image, provide continuity and signal quality to
customers.
Business Reliability Responsiveness Assurance Empathy Tangibles
Car Repair Problem fixed Accessible; no Knowledgeable Acknowledges Repair facility;
(Consumer) the waiting; Mechanics Customer by Waiting area;
1st time & ready responds name; Uniforms;
when promised To request Remembers Equipment
previous
problem &
preferences
Airline Flights to Prompt & Trusted Name: Understands Aircraft;
(Consumer) promised Speedy system Good safety special Ticketing
destination; for ticketing, In- record; Individual needs; Counters;
depart & arrive flight baggage Competent anticipates Baggage area;
on schedule handling employees Uniforms
Medical Care Appointments Accessible; No Knowledge; Acknowledge Waiting room;
(Consumer) are kept on waiting; Skills; patient as Exam room;
schedule; willingness to Credentials; person; Equipment;
Diagnosis prove listen Reputation remembers Written Material
accurate previous
problem; listens
well; has patience
Architecture Delivers plan Returns Phone Credentials; Understands Office area;
(Business when promised calls; adapts to Reputation; Client’s industry; Reports; Plans
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 and within change Name in acknowledges themselves;
budget community; and adapts to Billing
Knowledge & specific client statements;
Skills needs; gets to Dress of
know the client employees
Information Provides needed Prompt response Knowledgeable Knows internal Internal reports;
Processing information to request; not Staff; Well customers as Office area; dress
(Internal) when requested “bureaucratic’; Trained; individuals; of employee
deals with Credentials understands
problem individual &
promptly departmental
needs
Internet Provides correct Quick website Credible Responds with Appearance of
Brokerage information and with easy access information; human website and
(Consumer & executes & no down time Sources on site; interaction as collateral
Business) customer request Brand needed
accurately recognition;
Credential
apparent on site

Outcome, Interaction, and Physical Environment Quality

- What is it that customer evaluate when judging service quality?
- Over the years, services researchers have suggested that consumers judge the quality of services based on their
perceptions of the technical outcome provided, the process by which that outcome was delivered, and the quality of
physical surroundings where the service is delivered.
- The point is service quality as outcome quality, interaction quality and physical environment quality.

 Factors Influencing Customer Satisfaction:

 Specific product or service features:
- Customer satisfaction with product or service is influenced significantly by the customer evaluation of product or
service features.
- Ex: for hotels features might be pool area, golf course, restaurants, room comfort & privacy, helpfulness &
courtesy of staff, room price etc.
- Often FGD is conducted to determine important features/ attributes of product/services.
- Research have shown that customers trade off’s between features/ attributes price vs. quality/comfort depends
upon target groups.
 Consumer emotions:
- Customer satisfaction with product or service is influenced significantly by the customer emotions.
- Emotion can be stable, preexisting-ex: mood state or life satisfaction.
- Positive the emotion positive the evaluation and positive the satisfaction. Alternative negative emotion leads to
negative perception and satisfaction.
 Attributions for service success or failure:
- Attribution-the perceived cause of events-influence perception of satisfaction as well.
- When customer are surprised by outcome (+ve/-ve) consumer tends to look for reasons, and their assessments of
reason can influence their satisfaction.
 Perceptions of equity or fairness:
- Perception of equity or fairness can affect the Customer satisfaction.
- When service failure occur the issues of equity and fairness intensifies.
- Consumers as themselves: Have I been treated fair/equal/? Etc about treatment /price etc.
 Other consumers, family members, and coworkers:
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- Beside other reasons customer satisfaction is also influence by other people.
- When service/ product is consumed by group the groups perception influences the satisfaction of that individual
within the group.