2.1 Explain the three-stage model of service consumption
STAGE 1 - Service consumption:
Divided into three main stages
Prepurchase, service encounter and post-encounter stages
Pre-purchase stage
Need arousal
Information search
Evaluating alternatives
Perceived risk
Risk and uncertainty aversion
Strategies for risk reduction
1. Need awareness
When a person or organisation decides to buy or use a service, it is
triggered by an underlying need/need arousal
Needs may be triggered by:
People's unconscious minds (e.g. personal identity and aspirations)
Physical conditions (e.g. hunger)
External sources (e.g. social media/marketing activities)
When a need is recognised, people are likely to be motivated to take
action to resolve it
2. Information search
Once a need has been recognised, customers will search for solutions to
satisfy that need
Evoked set will be formed - several alternatives may come to mind
Can be derived from past experiences or external sources such as social
media, online reviews, online searches, advertising etc.
However, it is unlikely to use all the alternatives in the evoked set for
decision making. They're more likely to narrow it down to a few
alternatives from the consideration set
3. Evaluation of alternatives
Search qualities: qualities a customer can assess prior to purchase and
consumption such as colour, style or fit
Experience qualities: service attributes that can only be evaluated by
consumers after the service production process, such as taste, ease of
handling and personal treatment
, Credence qualities: services that are difficult to evaluate even after use
(e.g. medical, financial or legal services)
Multi-attribute model:
Consumers use service attributes important to them to evaluate and
compare alternative offerings in their consideration set
Higher weight = attribute more important
To enhance chance of being the chosen provider:
Ensure service is in the consideration set (advertising/viral marketing)
Change and correct perceptions
Shift importance weights
Introduce new attributes
4. Purchase decision
Many purchase decisions are quite simple and can be made quickly
without too much thought - perceived risks are low, alternatives are
clear and if they have used before
Purchase decisions can involve trade-offs as well - price
e.g. is it worth paying more for faster service, or better seat in a theatre
performance
For more complex decisions, trade-offs can involve multiple attributes
e.g. airline - reliability, seating comfort, availability and quality of meals
Once a decision is made -> move onto service encounter stage
,
STAGE 1 - Service consumption:
Divided into three main stages
Prepurchase, service encounter and post-encounter stages
Pre-purchase stage
Need arousal
Information search
Evaluating alternatives
Perceived risk
Risk and uncertainty aversion
Strategies for risk reduction
1. Need awareness
When a person or organisation decides to buy or use a service, it is
triggered by an underlying need/need arousal
Needs may be triggered by:
People's unconscious minds (e.g. personal identity and aspirations)
Physical conditions (e.g. hunger)
External sources (e.g. social media/marketing activities)
When a need is recognised, people are likely to be motivated to take
action to resolve it
2. Information search
Once a need has been recognised, customers will search for solutions to
satisfy that need
Evoked set will be formed - several alternatives may come to mind
Can be derived from past experiences or external sources such as social
media, online reviews, online searches, advertising etc.
However, it is unlikely to use all the alternatives in the evoked set for
decision making. They're more likely to narrow it down to a few
alternatives from the consideration set
3. Evaluation of alternatives
Search qualities: qualities a customer can assess prior to purchase and
consumption such as colour, style or fit
Experience qualities: service attributes that can only be evaluated by
consumers after the service production process, such as taste, ease of
handling and personal treatment
, Credence qualities: services that are difficult to evaluate even after use
(e.g. medical, financial or legal services)
Multi-attribute model:
Consumers use service attributes important to them to evaluate and
compare alternative offerings in their consideration set
Higher weight = attribute more important
To enhance chance of being the chosen provider:
Ensure service is in the consideration set (advertising/viral marketing)
Change and correct perceptions
Shift importance weights
Introduce new attributes
4. Purchase decision
Many purchase decisions are quite simple and can be made quickly
without too much thought - perceived risks are low, alternatives are
clear and if they have used before
Purchase decisions can involve trade-offs as well - price
e.g. is it worth paying more for faster service, or better seat in a theatre
performance
For more complex decisions, trade-offs can involve multiple attributes
e.g. airline - reliability, seating comfort, availability and quality of meals
Once a decision is made -> move onto service encounter stage
,
