Service Marketing.docx

THE SERVQUAL MODEL The SERVQUAL Model is an empiric model by Zeithaml, Parasuraman and Berry to compare service quality performance with customer service quality needs. It is used to do a gap analysis of an organization’s service quality performance against the service quality needs of its customers. That’s why it’s also called the GAP model. It takes into account the perceptions of customers of the relative importance of service attributes. This allows an organization to prioritize. Dimensions of Service Quality We will discuss two works both of which will give the totality of dimensions to service quality. David A. Garvin: Eight dimensions of quality were identified by Garvin: 1. Performance: Every product is supposed to deliver benefits and the measure of its quality is performance of the offer. A dish washer, which can clean plates completely and quickly, would be a performance measure. 2. Features: These are in addition to the core product, which does not come as standard features, like add-ons. 3. Reliability: This is a measure of the degree of probability of the product delivering what had been promised. 4. Conformance: Delivery quality meeting design standards. 5. Durability: This is a measure of the length of time that a product can deliver benefits, without deterioration. 6. Serviceability: If the product can be repaired with ease and speed, then it is a measure of quality. It could include the behavioural dimension of service personnel, like their politeness. 7. Aesthetics: This is a measure of the product’s looks, design, touch and feel. 8. Perceived quality: Consumers develop a perception due to company-controlled stimuli like advertising, publicity and brand promotion, and social effects like word-of-mouth. A Parasuraman et al: Parasuraman, Valerie Zeithaml and Leonard Berry identified five dimensions with which consumers judge services. There are five core components of service quality: 1. Tangibles – physical facilities, equipment, staff appearance, etc. 2. Reliability – ability to perform service dependably and accurately. 3. Responsiveness – willingness to help and respond to customer need. 4. Assurance – ability of staff to inspire confidence and trust. 5. Empathy – the extent to which caring individualized service is given.

The four themes that were identified by the SERVQUAL developers were numbered and labelled as: 1. Consumer expectation – management perception gap (Gap 1): Management may have inaccurate perceptions of what consumers (actually) expect. The reason for this gap is lack of proper market/customer focus. The presence of a marketing department does not automatically guarantee market focus. It requires the appropriate management processes, market analysis tools and attitude. 2. Service quality specification gap (Gap 2): There may be an inability on the part of the management to translate customer expectations into service quality specifications. This gap relates to aspects of service design.

3. Service delivery gap (Gap 3): Guidelines for service delivery do not guarantee high-quality service delivery or performance. There are several reasons for this. These include: lack of sufficient support for the frontline staff, process problems, or frontline/contact staff performance variability. 4. External communication gap (Gap 4): Consumer expectations are fashioned by the external communications of an organization. A realistic expectation will normally promote a more positive perception of service quality. A service organization must ensure that its marketing and promotion material accurately describes the service offering and the way it is delivered 5. These four gaps cause a fifth gap (Gap 5), which is the difference between customer expectations and perceptions of the service actually received Perceived quality of service depends on the size and direction of Gap 5, which in turn depends on the nature of the gaps associated with marketing, design and delivery of services. So, Gap 5 is the product of gaps 1, 2, 3 and 4. If these four gaps, all of which are located below the line that separates the customer from the company, are closed the gap 5 will close.

SERVICE QUALITY Definition There are a number of different “definitions” as to what is meant by services quality. In its simplest form service quality is a product of the effort that every member of the organization invests in satisfying customers. In its broadest sense service quality is defined as superiority or excellence as perceived by the customer. More especially service quality has been defined as:  The delivery of excellent or superior service relative to customer expectations.  Quality is behaviour – an attitude – that says you will never settle for anything less community, your stockholders or colleagues with whom you work every day.  When we want to be effective – delivering good quality to the customer – we must produce services that meet “as much as possible” the needs of the consumer.  Quality is providing a better service than the customer expects. One that is commonly us defines services quality as the extent to which a service meets customer’s needs or expectations. Today the most popular model of service quality in use is service quality gap model, perceived service quality as the difference between consumer expectations and their perceptions. Customer Retention through Quality Improvement The focus of the modern marketers has shifted away from a one-time sale to making repeated sales to the same customer. Increasing attention is being paid to medium and long term perspectives, rather than just the shortterm perspective. This has been a major revolution in thinking in the field of marketing. Customer retention usually pays dividends by way of:  Lifetime value of the customer. If the customer remains loyal to the company, naturally, the repeated purchases represent a cumulative value which is quite substantial compared to any single transaction.  Reduced costs. It costs much more to acquire a new customer than to retain an old customer. Therefore, the focus of marketing has shifted away from the goal of mere customer acquisition to customer retention in order to substantially reduce marketing costs. Benefit from wider opportunities to market more products and services to customers who are already loyal to you. The key concept in customer retention is customer satisfaction. Satisfaction results when the customer feels that the value of a service received by him is substantially higher than the price he paid for acquiring the service. Customer satisfaction can be largely attributed to the quality of the service or product. Thus, delivery of high quality service is crucial to the high service value perception. When the major marketing goal of a company is customer retention, the quality of service delivery is, undeniably, the key differentiator. Service Quality Assessment Service quality a critical component of customer’s perception will be the dominant element in customer evaluation. In cases where customer service or services are offered in combination with a physical product, service quality may also be very critical in determining customer satisfaction. Customers judge their quality of service on their perception of the technical outcome and how was the outcome delivered. For example, a legal service client will judge the quality of outcome, or how the court case was delivered, and also the quality of the process. Process quality also includes such things as lawyer’s timeliness, the responsiveness in returning phone calls, his empathy for the client, his courtesy and interviewing skills. Similarly, a restaurant customer will judge the service on customer’s perception of the meals (technical outcome quality) and on how the meal was served and on how the employees interacted with customers (process quality). Some researchers found that customers consider following five dimensions in their assessment of service quality:

1. Reliability: This dimension is shown to have the highest influence on the customer perception of quality. It is the ability to perform the promised service dependably and accurately. When service delivery fails the first time, a service provider may get a second chance to provide the same service in the phase called ‘Recovery’. The expectations of the customer are usually higher during the recovery phase than before because of the initial failure. Thus, the service provider is likely to come under greater scrutiny, thereby increasing the possibility of customer dissatisfaction. The reliability dimension, which ensures timely delivery time after time, helps the service provider to meet the customer expectations fully at the lowest level of service expectation. 2. Responsiveness: It is the willingness of the service firm’s staff to help customers and to provide them with prompt service. The customers may have queries, special requests, complaints, etc. In fact, each customer may have problems of his or her own. While the front-end employee may have been trained or equipped to deliver standardized services, the customers want them to go beyond this limit. It is the willingness to help the customer or willingness to go that extra distance that is responsiveness. The second aspect of responsiveness is speedy response to a customer request. When response is delayed customers usually loses interest. Many sales representatives respond on the phone, ‘I will call you back’. The call is never returned. The customer draws his or her own conclusion about the quality of service he is likely to receive in the future. 3. Assurance: It is defined as the ability of the company to inspire trust and confidence in the service delivery. It refers to knowledge and courtesy of the service firm’s employees and their ability to inspire trust and confidence in the customer toward the company. This dimension is considered vital for services that involve high risk as customers may not be able to evaluate all the uncertainties involved in the process by them. There are property developers/builders who provide a list of previous buyers of flats or apartments to potential buyers. The evaluation of construction services is beyond technical capabilities of most buyers. However, the prospective customers are free to call the previous customers. When prospective customers hear from them about the company and its satisfactory delivery, they feel assured and develop a more positive attitude towards the company. 4. Empathy: It refers to the caring, individualized attention the service firm provides each customer. When service provider puts himself in the shoes of the customers, he may see the customer’s viewpoint better. When customers feel that the provider is making his best effort to see their viewpoint, it may be good enough for most. 5. Tangibles: It refers to physical facilities, equipment, and appearance of a service firm’s employees. The job of the tangible and physical evidence of a service is multifunctional. When a patient in the waiting room of a clinic sees the doctor’s certificate, he becomes aware of the quality of service he is about to receive. Tangibles provide the customer proof of the quality of service. These dimensions represent how consumers organize information, about service quality in their minds. On the basis of exploratory and quantitative research, these five dimensions are found. These dimensions are relevant for banking, insurance, appliance repair and maintenance, securities brokerage, long distance telephone service, automobile repair service and others. The dimensions are also applicable to retail and business services. Sometimes customers will use all these dimensions to determine service quality perceptions at other times not. For example, in remote encounter such as an encounter with ATM, empathy is not likely to be relevant dimension and in an encounter such as scheduling a repair call, tangibles will not be relevant. Using SERVQUAL to Measure Service Quality The SERVQUAL instrument was based on the premise that service quality is the difference between customers’ expectations and their evaluation of the service they received. The first part of the questionnaire asks customers to indicate the level of service they would expect from a firm in a particular industry. The second part of the questionnaire asks customers to evaluate the service performed by a specific service firm. Gap Model is the method for calculating service quality that involves subtracting a customer’s perceived level of service received from what was expected. SERVQUAL uses 21 questions to measure the five dimensions of tangibles, reliability, responsiveness, assurance and empathy. Through SERVQUAL, firms can measure customers evaluations of their service performance. For example, if customers consistently give firm low scores for one dimension, such as reliability, then the firm’s management can take steps to improve that particular dimension of their service offering.

THE GAP MODEL OF SERVICE QUALITY The Gap Model of Service Quality has been developed by Parasuraman and his colleagues which helps to identify the gaps between the perceived service qualities that customers receive and what they expect. The Gap Model of Service Quality identifies five gaps: 1. Consumer expectation – management perception gap. 2. Management perception – service quality expectation gap.

3. Service quality specifications – service delivery gap. 4. Service delivery – external communications to consumer’s gap. 5. Expected service – perceived service gap. Gap – 5 is the service quality shortfall as seen by the customers, and gaps 1-4 are shortfalls within the service organization. Thus gaps 1-4 contribute to gap – 5. These gaps are given in the following figure:

1. The first gap is the difference between consumer expectations and management perceptions of consumer expectations. Research shows that financial service organizations often treat issues of privacy as relatively unimportant, whilst consumers consider them very important. 2. The second gap is the difference between the management perceptions of consumer expectations and service quality specifications. Managers will set specifications for service quality based on what they believe the consumer requires. However, this is not necessarily accurate. Hence many service companies have put much emphasis on technical quality, when in fact the quality issues associated with service delivery are perceived by clients as more important. 3. The third gap is the difference between service quality specification and the service actually delivered. This is of great importance to service where the delivery system relies heavily on people. It is extremely hard to ensure that quality specifications are when a service involves immediate performance and delivery in the presence of the client. This is the case in many service industries: for example, a medical practice is depending on all the administrative, clerical and medical staff performing their tasks according to certain standards. 4. The fourth gap is the difference between service delivery intention and what is communicated about the service to customers. These established expectations within the customer may not be met. Often this is the result of inadequate communication by the service provider. 5. The fifth gap represents the difference between the actual performance and the customer perception of the service. Subjective judgement of service quality will be affected by many factors, all of which may change the perception of the service which has been delivered. Thus a guest in a hotel may receive excellent service throughout his stay, apart from poor checking out facilities. But this last experience may damage his entire perception of the service, changing his overall estimation of the quality of the total service provided from good to poor. The The Gap Model of Service Quality outlined above provides a framework for developing a deeper understanding of the causes of service quality problems, identifying shortfalls in service and determining the appropriate means to close the gaps.