1. Customer Behavior
and Customer Handling

2. Objective of this chapter
This chapter provides information about the manner in which
purchasing decisions are made by involving fully in the
process and how to handle post purchase behaviour. It also
points out how customer service can be a decisive factor in
gaining competitive advantage. In addition, it provided
frequently asked questions by customers getting a home loan.
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3. Purchase Decisions and Consumer Involvement
• Marketers are interested in how consumers make choices about the
products and services they buy.
• Two of the factors determining these purchase decisions are the
complexity of the customer’s decision making process and the
nature of the product or service being considered. For example, a
decision about a small, frequently purchased item may involve very
little thought, whereas a large, complex or expensive item such as a
house will usually involve a great deal of deliberation.
• The more a person becomes involved in a purchase because of its
financial or personal importance, the more information that person
will seek about the product and the longer he/she will take to
evaluate the alternatives and reach a decision.
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• Consumers require information to reduce their perceived level of
risk.

4. Purchase Decisions and Consumer Involvement
• These risks include:
– The product not working to expectation
– The possibility of losing money
– Paying too much, i.e., a competitor may offer a lower price
– Opportunity risk, i.e., spending the money on one product means
that opportunities to spend the money in another way might be
foregone.
• To reduce these risks, consumer read newspaper articles and
advertisements, discuss their proposed purchase with family and
friends, and talk to salesperson to ask questions and request more
information.
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• The implication of this process is that when consumers are involved in
the purchase decision, they may be more responsive to complex
advertising messages and listening to the product’s competitive
benefits.

5. Post Purchase Behaviour
• Marketing has achieved its goal of customer satisfaction if
expectations have been met or exceeded and the decision
process is complete.
• However, sometimes customers remain dissatisfied and will
seek reassurance that they have made the right decision.
• In the time following a purchase, particularly a significant
purchase, the customer may experience uneasiness and
concern and may ask questions such as ‘Should I have gone
with the fixed-rate loan? It looks like interest rates are going
to fall further’.
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• This feeling of ‘post-purchase’ discomfort in psychological
terms is called ‘cognitive dissonance’.

6. Post Purchase Behaviour
• It relates to the negative feelings a person may experience
following a purchase commitment and results from the fact
that the people do not like to hold two or more conflicting
beliefs or ideas at the same time. Because they understand
that purchases can leave customers feeling dissatisfied,
effective marketers support their customers’ choices by,
• For example, following up the sale, providing additional
services and toll free hotlines. Keeping in contact with
customers is also an excellent way to discover problems they
may be experiencing, solving them, and building customer
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loyalty.

7. Customer Service
• Focus on customer service
• Good service is profitable
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8. Focus on customer service
• Customer service is viewed by an increasing number of
organizations as one of the most important ways of
establishing competitive advantage.
• Customer service can be one of the few differentiating factors
in markets where there is a great deal of similarity between
products and services.
• Customers who do not receive good service from one
organization have many other competitors to choose from.
• Close attention to customer feedback, prompt responses to
complaints and provision ofby Vidya Bhagwat as help-lines and
Trainings services such
internet sites are organizational responses to the challenge of
providing high quality customer service.

9. Good service is profitable
• Studies have repeatedly shown that good service leads to higher
profits.
• For an organization to have a customer service focus, it must
emphasize the importance of customer interactions whenever they
occur. The periods during which the customer interacts with the
service provider are sometimes called service encounters. Some of
the criteria used by customers to determine the quality of service
are:
– Convenience – ease of access to the service
– Communication – customer understands the service and how
much it costs
– Competence – the service provider is suitably qualified
– Courtesy – service representatives are friendly and helpful
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– Reliability – the service is performed consistently and the staff
are dependable
– Credibility – the service provider is trustworthy and believable

10. Summary
• Marketers are interested in how consumers make choices
about the products and services they buy.
• Marketing has achieved its goal of customer satisfaction if
expectations have been met or exceeded and the decision
process is complete. However, sometimes customers remain
dissatisfied and will seek reassurance that they have made the
right decision.
• Customer service can be one of the few differentiating factors
in markets where there is a great deal of similarity between
products and services.
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• Studies have repeatedly shown that good service leads to
higher profits.

11. Assignments
1. What measures would you take to ensure good service
quality?
2. Prepare answers to all the frequently asked questions. What
other questions can you expect from the customers?
3. Prepare a list of activities you would indulge in to ensure that
your service meets the six criteria of a good quality service.
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12. Trainings by Vidya Bhagwat