McGraw-Hill/Irwin © 2018 The McGraw-Hill Companies, All Rights Reserved Chapter 4-‹#› Customer Perceptions of Service Customer Perceptions Customer Satisfaction Service Quality Service Encounters: The Building Blocks for Customer Perceptions McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 4 McGraw-Hill/Irwin © 2018 The McGraw-Hill Companies, All Rights Reserved Chapter 4-‹#› Objectives for Chapter 4: Consumer Perceptions of Service Provide a solid basis for understanding what influences customer perceptions of service and the relationships among customer satisfaction, service quality, and individual service encounters. Demonstrate the importance of customer satisfaction—what it is, the factors that influence it, and the significant outcomes resulting from it. Develop critical knowledge of service quality and its five key dimensions: reliability, responsiveness, empathy, assurance, and tangibles. Show that service encounters, or the “moments of truth” are the essential building blocks from which customers form their perceptions. McGraw-Hill/Irwin © 2018 The McGraw-Hill Companies, All Rights Reserved Chapter 4-‹#› Customer Perceptions The focus of this chapter is on the perceived service box in the gaps model. Keep in mind: Perceptions are always considered relative to expectations Expectations and perceptions are both dynamic; they each may shift over time. Service quality and satisfaction are based on customers’ perceptions of the service - not some predetermined objective criteria. McGraw-Hill/Irwin © 2018 The McGraw-Hill Companies, All Rights Reserved Chapter 4-‹#› Customer Perceptions of Quality and Customer Satisfaction (Figure 4.1) McGraw-Hill/Irwin © 2018 The McGraw-Hill Companies, All Rights Reserved Chapter 4-‹#› Satisfaction versus Service Quality Both based on customers’ perceptions Satisfaction: broader concept that includes perceptions of situational factors and personal factors, product quality, service quality, price, etc. Service quality is a component of satisfaction; focuses on dimensions of service Customers have transaction-specific perceptions as well as overall perceptions of a company, a service, an industry McGraw-Hill/Irwin © 2018 The McGraw-Hill Companies, All Rights Reserved Chapter 4-‹#› Satisfaction “The customer’s fulfillment response. It i ...

1. McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Customer Perceptions of Service
Customer Perceptions
Customer Satisfaction
Service Quality
Service Encounters: The Building Blocks for Customer
Perceptions
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc.
All rights reserved.
Chapter
4

2. McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Objectives for Chapter 4:
Consumer Perceptions of Service
Provide a solid basis for understanding what influences
customer perceptions of service and the relationships among
customer satisfaction, service quality, and individual service
encounters.
Demonstrate the importance of customer satisfaction—what it
is, the factors that influence it, and the significant outcomes
resulting from it.
Develop critical knowledge of service quality and its five key
dimensions: reliability, responsiveness, empathy, assurance, and
tangibles.
Show that service encounters, or the “moments of truth” are the
essential building blocks from which customers form their
perceptions.
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›

3. Customer Perceptions
The focus of this chapter is on the perceived service box in the
gaps model.
Keep in mind:
Perceptions are always considered relative to expectations
Expectations and perceptions are both dynamic; they each may
shift over time.
Service quality and satisfaction are based on customers’
perceptions of the service - not some predetermined objective
criteria.
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Customer Perceptions of Quality and Customer Satisfaction
(Figure 4.1)
McGraw-Hill/Irwin

4. © 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Satisfaction versus Service Quality
Both based on customers’ perceptions
Satisfaction: broader concept that includes perceptions of
situational factors and personal factors, product quality, service
quality, price, etc.
Service quality is a component of satisfaction; focuses on
dimensions of service
Customers have transaction-specific perceptions as well as
overall perceptions of a company, a service, an industry
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Satisfaction
“The customer’s fulfillment response. It is a judgment that a
product or service feature, or the product or service itself,
provides a pleasurable level of consumption-related fulfillment”
(Oliver 1997).

5. McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Factors Influencing Customer Satisfaction
Product and service features
Perceptions of product and service quality
Price
Customer emotions
Attributions for service success or failure
Perceptions of equity or fairness
Other customers, family members, and coworkers
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
The American Customer Satisfaction Index (Figure 4.2)

6. McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Outcomes of Customer Satisfaction
Increased customer loyalty
Positive word-of-mouth communications
Increased revenues
Increased return to shareholders
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Customer Satisfaction and Loyalty
(Figure 4.3)
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›

7. What is Service Quality?
The Customer Gap
Service quality: the customer’s judgment of overall excellence
of the service provided in relation to the quality that was
expected.
Expected Service
Perceived Service
Customer gap
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Service Quality
Service quality assessments are formed on judgments of:
outcome quality
interaction quality
physical environment quality

8. 8
7
9
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
The Five Dimensions of Service Quality
Reliability: ability to perform the promised service dependably
and accurately.
Assurance: knowledge and courtesy of employees and their
ability to inspire trust and confidence.
Tangibles: physical facilities, equipment, and appearance of

9. personnel.
Empathy: caring, individualized attention the firm provides its
customers.
Responsiveness: willingness to help customers and provide
prompt service.
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
E-Service Quality
How do customers evaluate service quality on the Web?
E-S-QUAL is the extent to which a website facilitates efficient
and effective shopping, purchasing, and delivery
Four core dimensions:
Efficiency, fulfillment, system availability, privacy
Three “recovery service” dimensions:
Responsiveness, compensation, contact
McGraw-Hill/Irwin

10. © 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
How Customers Judge the Five Dimensions of Service Quality
(Table 4.2)
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Customer Effort
Customer effort is another driver of customer loyalty that is
distinct from quality and satisfaction.
In customer service contexts, customer loyalty may be based
more on minimizing the effort customers need to expend to get
their problems solved rather than delighting or satisfying them.
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›

11. The Service Encounter
The most vivid impression of service occurs in the service
encounter when the customer interacts with the service firm.
It is the “moment of truth”
Any service encounter can potentially be critical in determining
customer satisfaction and loyalty.
However, depending on the context and situation, early, late,
and intense encounters are likely to be more important in
customer evaluations of the overall service experience.
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
A Service Encounter Cascade for a
Hotel Visit (Figure 4.4)
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›

12. Types of Service Encounters
Remote encounters: no direct human contact; automated; the
bases for quality evaluations are tangibles and technical
processes.
Technology-mediated encounters: communication with a real
person in real time via talk, text, live chats; the bases for
quality evaluations are tone of voice, employee knowledge, and
effectiveness/efficiency.
Face-to-face encounters: direct personal contact between an
employee and a customer; bases for quality are verbal and non-
verbal cues, symbols.
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Common Themes in Critical
Service Encounters Research

13. McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Recovery
Employee response to service delivery system failure
Adaptability
Employee response to customer needs and requests
Spontaneity
Unprompted and unsolicited employee actions
Coping
Employee response to problem customers
Technology-Based Service Encounters
Themes for satisfying SSTs
The technology delivered on the core promise
The technology was flexible, adaptive
The technology was better than the alternative
Themes for dissatisfying SSTs
The technology system failed

14. The process failed
The technology was poorly designed
No effective service recovery
McGraw-Hill/Irwin
© 2018 The McGraw-Hill Companies, All Rights Reserved
Chapter 4-‹#›
Initial Response
· Initial Response
· Share with the group a current (one not found in our readings)
“business model” related “Innovation Pick of the Week.”
Analyze and briefly explain the nature of the business model
innovation. (lyft scooters or ride share scooters)
· Your post must be 350 words in length
· APA citations are required for initial responses
·
https://owl.purdue.edu/owl/research_and_citation/apa_style/apa
_formatting_and_style_guide/general_format.html (Links to an
external site.)
· You can access the databases of peer-reviewed journals here:
· https://libguides.lib.fit.edu/business (Links to an external
site.)
· https://libguides.lib.fit.edu/healthcare (Links to an external
site.)
· https://libguides.lib.fit.edu/InformationTechnology

15. Week 2 DB
1. Intuitively, it would seem that managers would want their
customers to have wide tolerance zones for service. But if
customers do have these wide zones of tolerance for service, is
it more difficult for firms with superior service to earn customer
loyalty? Would superior service firms be better off to attempt to
narrow customers’ tolerance zones to reduce the competitive
appeal of mediocre providers?
2. The textbook introduces multiple factors that influence
customer satisfaction? Which of these factors are more
important in healthcare industries? Why?