Term Paper of SERVQUAL model.

1. Introduction
Service quality is an approach to manage business processes in order to ensure full satisfaction of
the customers & quality in service provided. It works as an antecedent of customer satisfaction.
If expectations are greater than performance, then perceived quality is less than satisfactory and
hence customer dissatisfaction occurs.
SERVQUAL is a service qualité Framework, developed in the eighties by Zeithaml, Parasuraman
& Berry, aiming at measuring the scale of Quality in the service sectors.
SERVQUAL was originally measured on 10 aspects of service quality reliability,
responsiveness, competence, access, courtesy, communication, credibility, security,
understanding the customer, and tangibles, to measure the gap between customer expectations
and experience.
SERVQUAL as a Measuring Tool
 In 1988 the 10 components were collapsed into five dimensions (RATER). Reliability,
tangibles and responsiveness remained distinct, but the remaining seven components collapsed
into two aggregate dimensions, assurance and empathy.
 Parasuraman et al. developed a 22-scale instrument with which to measure customers’
expectations and perceptions (E and P) of the five RATER dimensions. Four or five numbered
items are used to measure each dimension.
 The instrument is administered twice in different forms, first to measure expectations and
second to measure perceptions.

2. The Key Service Dimensions
The five SERVQUAL dimensions are: R-A-T-E-R:
1. RESPONSIVENESS - Willingness to help customers and provide prompt service
2. ASSURANCE - Knowledge and courtesy of employees and their ability to convey trust
and confidence
3. TANGIBLES - Appearance of physical facilities, equipment, personnel, and
communication materials
4. EMPATHY - Caring, individualized attention the firm provides its customers
5. RELIABILITY - Ability to perform the promised service dependably and accurately
Conceptual Model of Service Quality
GAP 1: Not knowing what
customers expect
GAP 2: wrong service
quality standards
GAP 3: The service
performance gap
GAP 4: promises do not
match actual delivery
GAP 5: The difference
between customer
perception and expectation

3. The SERVQUAL Gaps
 Gap 1
 Commonly known as the management perception gap
 Gap 1 results from a difference between what customers expect and what management
perceives these expectations to be.
 It indicates a problem with the understanding of the market. This can occur, as a result of
insufficient research or communication failures.
 E.g. : Management of ABC Dry cleaning Ltd perceives that a particular segment simply
expects low prices on its service, when in fact, the expectation is a value-for-money
service.
Gap 2
 Commonly known as quality specification gap.
 Gap 2 results from a difference between management perceptions of what customers
expect and the specifications that management draws up when detailing the service
quality delivery actions that are required.
 Service design and performance standards are pre-requisites for bridging this gap.
 E.g.: Most hotels do not do housekeeping in a room on the day the customer is checking
out. But has management realised that the customer who is doing a late checking out
wants a clean room during that day?
Gap 3
 Commonly known as the Service delivery gap.
 Gap 3 results from a mismatch between the service delivery specifications required by
management and the actual service that is delivered by front line staff.
 It is the difference between customer-driven service design & standards, and the service
delivery of the provider.
 Managers need to audit the customer experience that their organization currently delivers
in order to make sure it lives up to the expected level.

4.  E.g. : Usually, all restaurants need to attend to every request and orders of the customers.
But very often when customers place orders, they either do not receive the orders at all or
the waiter has confused it with that of another customer.
Gap 4
 Commonly known as market communication gap.
 This is the gap between the delivery of the customer experience and what is
communicated to customers, i.e. the discrepancy between actual service and the promised
one
 All too often organizations exaggerate what will be provided to customers, or discuss the
best case rather than the likely case, raising customer expectations and harming customer
perceptions.
 E.g. A company commercialising slimming products boasts that customers may lose up
to 4-5 kgs/week. But they do not specify that a strict diet and regular exercise must
accompany the treatment for it to have the desired effect.
Gap 5
 Commonly known as the perceived service quality gap.
 Gap 5 may be identified as the overall difference between the expected service and the
perceived service experienced. Gap 5 results from the combination of Gaps 1 to 4
 Customers' expectations have been shaped by word of mouth, their personal needs and
their own past service experiences.
 Unless Gap 5 is kept under check, it may result in lost customers, bad reputation,
negative corporate image.

5. Causes for the Gaps
GAP 1 - not knowing what customers expect
E.g.: XYZ Events Ltd organised a wedding with the usual white and blue decorations, when the
customer had expected something new and original.
Causes:
 Lack of a marketing orientation to quality
 Poorly interpreted information about customer’s expectations
 Research not focused on demand quality
 Too many layers between the front line personnel &
 top level management
GAP 2 - The wrong service quality standards
E.g.: XYZ Events Ltd perceived that the customer wanted a very nice reception with at least 2
waiters at each table, but management eventually decided otherwise to reduce costs.
Causes:
 inadequate commitment to service quality
 lack of perception of feasibility
 inadequate task standardization
 the absence of goal setting
 Insufficient planning of procedures
GAP 4 - When promises donot match actual delivery
E.g. : XYZ Events Ltd promised to have a Mercedes limousine for the entry of the groom, but
eventually the latter was given a simple Nissan Sunny.

6. Causes:
 inadequate horizontal communication
 Over-promising in external communication campaign
 Failure to manage customer expectations
 Failure to perform according to specifications given to customers
GAP 5 - The difference betweencustomer perceptionof service andthe
expectationthey had
Usually the cause is the occurrence of the 4 other Gaps, which results in a difference between
customer perception and the expectation they had. Ultimately the groom’s experience was way
too far from what he had expected, and thus results in dissatisfaction.
Other causes canbe:
 cultural background, family lifestyle, personality,
 demographics, advertising, experience with similar service
 information available online

7. Solution for the Gaps
No Solutions as such, but rather, measures that can be taken to minimize the gaps
Criticisms to SERVQUAL
 It has been criticized that SERVQUAL's 5 dimensions (RATER) are not universals, and
that the model fails to draw on established economic, statistical and psychological theory.
 There is little evidence that customers assess service quality in terms of Perception /
Expectation gaps.
 SERVQUAL focuses on the process of service delivery, not the outcomes of the service
encounter.
 There is a high degree of intercorrelation between the five RATER dimensions, thus the
scores obtained cannot be exact.

8. Advantages of SERVQUAL
 Enables assessing service quality from the customer’s perspective
 We can track customer expectations and perceptions over time, together with the
discrepancies between them
 Servqual enables comparison to competitors on common aspects
We can assess the expectations and perceptions of internal customers – e.g. other departments or
services.
Disadvantages of SERVQUAL
 The uniform applicability of the method for all service sectors is difficult.
 The use of expectations in measuring service quality has currently come under a lot
of criticism.
 Does not measure service outcome perceptions.
Methodology of SERVQUAL
 The method essentially involves conducting a sample survey of customers so that their
perceived service needs are understood.
 For measuring their perceptions of service quality for the organization in question,
customers are asked to answer numerous questions within each dimension that determines:
 The relative importance of each attribute.
 A measurement of performance expectations that would relate to an “excellent” company.
 A measurement of performance for the company in question.
 This provides an assessment of the gap between desired and actual performance.
 This allows an organization to focus its resources where necessary and to maximize
service quality whilst costs are controlled

9. Uses of SERVQUAL
 To assess a company's service quality along each of the 5 SERVQAL dimensions. E.g.
XYZ Events Ltd carries out the servqual survey to know where it stands in the perception
of customers.
 To track customer's expectations and perceptions over time. E.g. XYZ Events Ltd wants
to compare its score of last year against that of the current year to know whether it has
improved or has to improve
 To compare a company's SERVQUAL scores against competitors. E.g.: XYZ Events Ltd
wants to compare its score against that of 1570 Events Ltd to see who is the best.
 To identify and examine customer segments that differ significantly in their assessment of
a company's service performance.
 To assess internal service quality (interdepartmental comparison)
Applications of SERVQUAL
 Service quality has become an important research topic because of its apparent
relationship to costs, profitability, customer satisfaction, and customer retention
 SERVQUAL has been a keyword in 41 publications which incorporate both theoretical
discussions and applications of SERVQUAL in a variety of industrial, commercial and
not-for-profit settings.
 Some of the published studies include :
 Hotels ,travel and tourism
 Car servicing, business schools
 Accounting firms, architectural services
 Airline catering
 Mobile Telecommunications in Macedonia

10. Conclusions
 SERVQUAL is considered very complex, subjective and statistically unreliable. The
simplified RATER model however is a simple and useful model for qualitatively
exploring and assessing customers' service experiences
 It is an efficient model in helping an organization shape up their efforts in bridging the
gap between perceived and expected service
 SERVQUAL is used to track customer's expectations and perceptions over time to
compare the company's SERVQUAL scores against competitors.
 Although SERVQUAL's face and construct validity are in doubt, it is widely used in
modified forms (RATER) to measure customer expectations and perceptions of service
quality.

11. Measuring Service Quality of AB Bank Ltd. Using SERVQUAL
Name of the Participant: ………………………………………….. Age: ……… Gender:M / F
Occupation: …………………… Mobile No.:………………………Email: ……………….............
Date: …………………………. Signature: …………………………………….
The Survey The questionnaire below is in two sections. The first section asks you to rank all
banks according to your expectations i.e. what you expect all banks to provide. The second
section asks you to rank the bank you chose for the survey according to your experiences and
perceptions.
Expectations: This section of the survey deals with your opinions of banks. Please show the
extent to which you think banks should possess the following features. What we are interested
in here is a number that best shows you expectations about institutions offering banking
services.
Perception: The following statements relate to your feelings about the particular bank you
have chosen. Please show the extent to which you believe this bank has the feature described
in the statement. Here, we are interested in a number from 1 to 7 that shows your perceptions
about the bank.
You should rank each statement as follows:
Strongly Strongly
Disagree Agree
1 2 3 4 5 6 7

12. *Tangible
Expectation Perception
Statement Score Statement Score
1. Excellent banking companies will
have modern looking equipment.
1. The bank has modern looking
equipment.
2. The physical facilities at excellent
banks will be visually appealing.
2. The bank's physical features are
visually appealing.
3. Employees at excellent banks will
be neat in their appearance.
3. The bank's reception desk
employees are neat appearing.
4. Materials associated with the
service (pamphlets or statements)
will be visually appealing at an
excellent bank.
4. Materials associated with the
service (such as pamphlets or
statements) are visually appealing
at the bank.
*Reliability
Expectation Perception
Statement Score Statement Score
5. When excellent banks promise to
do something by a certain time,
they do.
5. When the bank promises to do
something by a certain time, it
does so.
6. When a customer has a problem,
excellent banks will show a
sincere interest in solving it.
6. When you have a problem, the
bank shows a sincere interest in
solving it.
7. Excellent banks will perform the
service right the first time.
7. The bank performs the service
right the first time.
8. Excellent banks will provide the
service at the time they promise to
do so.
8. The bank provides its service at
the time it promises to do so.
9. Excellent banks will insist on
error free records.
9. The bank insists on error free
records.
*Responsiveness
Expectation Perception
Statement Score Statement Score
10. Employees of excellent banks will
tell customers exactly when
services will be performed.
10. Employees in the bank tell you
exactly when the services will be
performed.
11. Employees of excellent banks will
give prompt service to customers.
11. Employees in the bank give your
prompt service.

13. 12. Employees of excellent banks will
always be willing to help
customers.
12. Employees in the bank are always
willing to help you.
13. Employees of excellent banks will
never be too busy to respond to
customers' requests.
13. Employees in the bank are never
too busy to respond to your
request.
*Assurance
Expectation Perception
Statement Score Statement Score
14. The behaviour of employees in
excellent banks will instil
confidence in customers
14. The behaviour of employees in
the bank instils confidence in you.
15. Customers of excellent banks will
feel safe in transactions.
15. You feel safe in your transactions
with the bank.
16. Employees of excellent banks will
be consistently courteous with
customers.
16. Employees in the bank are
consistently courteous with you.
17. Employees of excellent banks will
have the knowledge to answer
customers' questions.
17. Employees in the bank have the
knowledge to answer your
questions.
*Empathy
Expectation Perception
Statement Score Statement Score
18 Excellent banks will give
customers individual attention.
18. The bank gives you individual
attention.
19 Excellent banks will have
operating hours convenient to all
their customers.
19. The bank has operating hours
convenient to all its customers.
20 Excellent banks will have
employees who give customers
personal service.
20. The bank has employees who
give your personal attention.
21 Excellent banks will have their
customers' best interest at heart.
21. The bank has your best interests
at heart.
22. The employees of excellent banks
will understand the specific needs
of their customers.
23. The employees of the bank
understand your specific needs.
*Dimensions of Servqual Model