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Assignment_2_SIVA

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Assignment_2_SIVA

  1. 1. UNIVERSITY OF SALFORD ROLE OF SERVICE QUALITY IN SUSTANING CUSTOMER RELATIONSHIP EXPERIENCES By: Kopparaju Siva Theja @00447134 SUBMITTED TO: DR.SEAN CHUNG Lecturer at Salford Business School
  2. 2. 1 TABLE OF CONTENTS INTRODUCTION _____________________________________________________________ 2 TASK ONE: CRITICAL EVALUATION OF SERVICE QUALITY ______________________ 2 1.1 SERVICE QUALITY _________________________________________________________ 2 1.2 SERVICE QUALITY DIMENSIONS_______________________________________________ 3 1.2.1 CUSTOMER- EMPLOYEE INTERACTION ___________________________________________3 1.2.2 OUTCOME _______________________________________________________________4 1.2.3 SERVICE ENVIRONMENT _____________________________________________________4 TASK TWO: CUSTOMER RELATIONSHIPS AND CONSUMER EXPERIENCES _________ 5 2.1 CUSTOMER RELATIONSHIPS__________________________________________________ 5 2.2 CONSUMER EXPERIENCES ___________________________________________________ 5 2.3 LINKAGE BETWEEN CUSTOMER RELATIONSHIP AND CONSUMER EXPERIENCES ___________ 7 TASK THREE: APPLICATIONOF THEORYOF CUSTOMER SERVICE QUALITYAND CUSTOMER RELATIONSHIP EXPERIENCE TO CONTEMPORARYMARKETING ______ 9 3.1 CONTEMPORARY MARKETING SCENARIO _______________________________________ 9 3.2 APPLICATION OF THEORIES RELATED TO SERVICE QUALITY AND CUSTOMER RELATIONSHIP EXPERIENCE_________________________________________________________________ 10 3.1 SERVQUAL ____________________________________________________________ 10 3.2 GAP MODEL ____________________________________________________________ 10 3.3 FISHBONE MODEL ________________________________________________________ 12 CONCLUSION ______________________________________________________________ 13
  3. 3. 2 INTRODUCTION This study is based on the understanding of service quality and how it makes an impact on the customer experiences. In this study, an attempt has been made to explore the different aspects related to service quality and its connection with the customer’s experience(Dijulius, 2015). Service quality is core to the customer relationship management, and it has a great contribution to modern marketing. Based on this importance of service quality in relationship marketing, this study also makes use of severaltheoretical and analytical models so as to understand the further dynamics of the stated relationship. Apart from that, this study also undertakes critical understanding of the concept of experiential marketing and its relevance to social media marketing. This study, based on several theories and models attempts to realize experiential marketing as a tool for the use of which organizations and consumers can co- create value(Cambra-Fierro et al., 2014). TASK ONE: CRITICAL EVALUATION OF SERVICE QUALITY 1.1 SERVICE QUALITY Service quality is the judgment of the customers regarding the overall excellence of the product or services (Zaithaml, 1998). Quality is the perception of the customers on what they are getting from the product at a given price. Service quality has a major impact on the customer’s buying behavior and purchasing choices (Bruck et al., 2000). Quality is not just related to the service attributes or specification but is an overall assessment of the service regarding the value it adds to the customer (Parasuraman, Zeithaml & Berry, 1988).The relevance of service quality is much greater for companies that aim for a long term success in the targeted market. Service quality also plays a vital role in developing a strong customer relationship. When customers experience greater service excellence, they tend to feel loyal towards the company, and this helps in maintaining a strong relationship over the long run(Chen & Lin, 2015). Service quality is an antecedent to customer satisfaction which eventually leads to customer loyalty and retention (Yang and Peterson, 2004). Furthermore, service quality is directly linked with relationship management and value maximization of business. Greater service quality motivates the customers to maintain a stronger and sustainable relationship with the company(Brown & Brown, 2014). Customer perception of the service quality is greatly influenced by the organizational, functional and technical quality along with the core service product and delivery environment and mechanism (Brady and Cronin, 2001). Furthermore, service quality, regarding service industry is also greatly determined by the responsiveness and empathy of the service staffs of the company. Also, the tangibles related to the service
  4. 4. 3 experience play a vital role in shaping the perception of the customers regarding the service quality offered by a company(Lee & McCandless, 2015). 1.2 SERVICE QUALITY DIMENSIONS Service quality is core to any business especially the ones that are the part of the service industry. Service quality and product quality are two different things. Like product quality plays a complimentary role in customer’s busing decisions, service quality plays a rather decisive role in the case of services offered by a business in the service industry(Reason et al., 2015). Being able to offer the customer with greater service quality will allow a business to create greater customer satisfaction. Customer satisfaction is the key to the strong customer relationship. Service quality can be seen in the backdrop of three basic service dimensions i.e. customer- employee interaction, outcome and service environment (Rust & Oliver, 1994). Figure 1: Service Quality Dimensions(Lee & McCandless, 2015) 1.2.1 CUSTOMER- EMPLOYEE INTERACTION Customer- employee interaction is one of the most important aspects of the service quality (Gronroos, 1984). Regarding service based businesses, the delivery of the services entirely depends upon the employees. Employees are the one responsible for creating and delivering the services to the customers. As discussed above, service quality is an overall assessment of the total services received by the customers. Thus, the interaction between employees and customers play a crucial role in defining service quality(Zeithalm et al., 2012). For instance, in the case of the hotel industry, the customer’s experience in positive interaction with the front desk staff can help them develop a perceived quality of the hotel. Customer- Employee Interaction Outcome Service Quality Dimensions Service Environment
  5. 5. 4 Similarly, the employee’s ability to handle guests and their queries and complains also put an impact on the minds of the customers regarding the quality of the services being offered(Radojevic et al., 2015). 1.2.2 OUTCOME The outcomes of the service delivery process is another crucial dimension of service quality (Gronroos, 1984). Outcomes are the end results that the customers receives or consume. These outcomes are placed as important dimensions of service quality because these are what the customers receive. The excellence in service quality is determined by how the customers perceive the value of the outcomes of service delivery(Lee & McCandless,2015). For instance, the outcomes in case of the restaurantare the food quality that customers perceive. Regardless of other complimentary services offered by the restaurant such as special treatments by staffs and good ambiance, customers will eventually judge the service quality based on how the food was. Outcomes are the tangibles related to the service experience (Brady and Croin, 2001). These tangibles directly make an impact on the perceived quality of the services being received. Thus, the outcomes of the entire service delivery mechanism play a greater role in defining the service dimensions(Evenson, 2013). 1.2.3 SERVICE ENVIRONMENT Another important dimension of service quality can be the service environment within which the business operates within (Bintner, 1991). The service environment can be judged by the service infrastructures and ambiance of the place of service consumption. When customers consume a service within a certain environmental setting, the soundness of the environment helps in shaping the perception of the customers regarding the service quality(Zemblytė, 2015). For instance, in the case of hotel services, the neatness of the hotel plays a decisive role I the overall quality assessment of the hotel’s services. A hotel that offers clean, comfortable and positive ambiance is perceived by the customers to be of greater quality. Thus, service environment plays a major role in shaping the perceived quality of the services offered by a business(Brown & Brown, 2014). Thus, service quality has its contribution in developing a perception in the minds of the customersregarding the business. The customer’s perception of service quality helps in shaping the buying behavior of the customers. It has a major connection with customer satisfaction and experiences(Institute, 2011). Thus, a higher level of customer acceptance can be achieved by a business by providing their customers with superior service excellence.
  6. 6. 5 TASK TWO: CUSTOMER RELATIONSHIPS AND CONSUMER EXPERIENCES 2.1 CUSTOMER RELATIONSHIPS Customer relationships are related to the efforts of the business made in communicating the business’s marketing messages to the customers(Zeithalm et al., 2012). The customers are the one on whom the marketing efforts of the business is targeted. The main aim of business, even in the service industry, is to transform the customers into consumers by adopting different ways to strengthen the customer relationships. Customer relationships play a major role in stimulating the customer behavior(Reason et al., 2015). Favorable relationships with the customers will lead the company to have positive purchase behavior of the customers i.e. when the CRM efforts are correctly communicated and received by the customers; they tend to show positive purchase response. The relevance of service quality is much higher in developing an effective customer relationship mostly because customer relationship management concerns with communicating the customers with the use and importance of the offered service quality(Zemblytė, 2015). The customer relationship management for a service industry concerns with creating a database of customer related information and using of that information to design and implement a marketing plan. To manage the customer relationships, businesses review different aspects of customer’s needs and expectations and design and deliver services accordingly so as to maximize customer satisfaction and to trigger positive consumer experiences(Hsu et al., 2015). 2.2 CONSUMER EXPERIENCES Customer experience is the bases for the customers to make repurchase decision. These experiences are gained by the previous consumption of the servicers.Thus, if the customersgain a positive experience from the previous consumption they tend to repeat the purchase behavior(Goodman, 2014). The effective and efficient management of the customer experiences will allow a business to enjoy the advantage of differentiated competitive advantage (Echeverri, 2005). For businesses in the service industry, customer experience can be a successful driver of the business value. Thus, business is in constant endeavor to enhance the customer experiences through effective relationship management and quality service delivery(Hyken, 2011).
  7. 7. 6 Figure: Experience profit cycle of a hotel industry(Mpofu & Hlatywayo, 2015) The experience profit cycle (Voss, 2004) shows how positive customersexperience leads to business value. Customer experience can be triggered by three basic clues i.e. functional, mechanic and human. The functional clue is related to the functionality of the services received while mechanic clues are related to the service delivery mechanism(Soudagar et al., 2011). Similarly, the human clues are related to the employee- customer relationship. The sound employee- customer relationship can lead to the positive customer experiences. According to the experience profit cycle, when companies manage and invest in customer experience, the positive experiences will lead to positive feelings in the minds of the customers(Lin, 2012). This positive experience can be a base for long term relationship that will add value to the business over the long run. Thus, it is evident that positive experiences will increase the repurchase of the customers, and this will eventually increase the profit of the company which will consequently be invested in the experience management of the consumers. Thus, the experience cycle shows how the consumer experience management has been practiced currently in the service industry(Hyken, 2011).
  8. 8. 7 2.3 LINKAGE BETWEEN CUSTOMER RELATIONSHIP AND CONSUMER EXPERIENCES Customer relationship and consumer experiences are closely related to one another. It is mostly because positive customer relationship will transform the customers into consumers(Radojevic et al., 2015). Eventually, the consumers while being fed with superior service quality will tend to feel positive experiences with will eventually strengthen the customer relationship management. Thus, there is a sort of cyclical relationship between the customer relationship, service quality and consumer experiences. The linkage between customer relationship and customer experience is facilitated by the service quality. It is by the use of service quality that the customers can gain better experiences through strong customer relationships(Lin, 2012). Nevertheless,there are three basic concepts that can be important in viewing the link between customer relationship and consumer experiences.  Customer Interactions Customer interaction is a catalyst in the process of linking the relationship management with customer experience management(Soudagar et al., 2011). When businesses interact with customers, they tend to get an idea of whatthe customer actually wantto form the company. This understanding can be used to develop a strong customer relationship. Furthermore, this strong relationship can be a base for designing and customizing the services in a way that positive customer experiences are achieved.  Networks Networks are the strong factors that contribute to the development of strong customer relationships(Goodman, 2014). It is through the networks that the customers can be placed close to the business. Effective customer relationship can lead to customer networks that will provide an inherent marketing and promotion for the company. For instance, when the customer relationship is built on excellent service quality, it will lead to superior customer experience and satisfaction. This satisfaction is an antecedent to customer loyalty. Loyalty is not just regarding repurchase; loyal customers develop a network that promotes and advertise the businesses’ superior service quality(Soudagar et al., 2011). Thus, positive customer experiences will help develop networks that will work towards strengthening the customer relationships to a great extent. Thus, customer relationship and customer experience both lead to one another. They share a cyclical relationship. When the strong customer relationship is developed based on customer interactions, favorable consumer experience can be achieved(Lin, 2012). Similarly, positive consumer experience will help
  9. 9. 8 develop strong customer networks that contribute to maintaining a favorable customer relationships. Therefore, it is important for a business to focus on both relationship management as well as customer experience management through effective marketing efforts and service quality enhancement to co- create business value based on the collaboration with one’s customers(Institute, 2011).
  10. 10. 9 TASK THREE: APPLICATION OF THEORY OF CUSTOMER SERVICE QUALITY AND CUSTOMER RELATIONSHIP EXPERIENCE TO CONTEMPORARY MARKETING 3.1 CONTEMPORARY MARKETING SCENARIO The current marketing scenario comprises of trends related to modern and innovative marketing. Today’s marketing environment is dynamic, and different factors influence the customer. Furthermore, technological developments have shifted the businesses’ view on marketing concepts. In a situation like this, social media marketing has been the latest trend in today’s marketing scenario. Business has opted to use of these social media marketing as a tool to enhance the customer relationships mostly because of the greater reach and closeness to the customers that these mediums offer(Hsu et al., 2015). Social media marketing has allowed business to offer the customers with customized marketing messages which eventually leads to a strong bond between the business and customers. For instance, customers can interact directly with a hotel’s social media team based on which he/she can receive service customization. When customers are delivered with desired services in customized forms, they feellike they have been valued by the business and end up feeling a positive service experience. Thus, use of social media medium has not just enhanced the customer relationships but also the service quality and consumer experiences(Zeithalm et al., 2012). The social media like Facebook, Pinterest, and Instagram, etc. Let the customer interact with each other as well as the business and develop a network. As discussed in the earlier section, both networks and interactions are crucial for the relationship management and consumer relationship management. Through the social media networks, businesses can directly interact with its customers and deliver services of their interest. Similarly, the customer’s network in social media will help the business gain positive word-of- mouth backed by positive consumer experiences(Institute, 2011). When the customers share their positive service experience in social media, this sharing of experience contributes to effective relation management through social media marketing.
  11. 11. 10 3.2 APPLICATION OF THEORIES RELATED TO SERVICE QUALITY AND CUSTOMER RELATIONSHIP EXPERIENCE 3.1 SERVQUAL The SERVQUAL model of service quality can be understood as an extensive model that can be used by business to assess its service quality based on the different service quality dimensions (Van Iwaarden et al., 2003). About the contemporary marketing scenario, businesses can use the SERVIQAL model so as to understand how their service quality hashelped in developing positive customer relationships and favorable consumer experience(Zemblytė, 2015). The service dimensions as explained by the SERVQUAL model are explained about the contemporary marketing scenario. Tangibility: It is related to the physical attribute or tangible aspects of the products or services. Reliability: Commitment of the services to perform as promised Responsiveness: Ability of the business to respond to the customer’s queries and complaints Assurance:Ability of business to make the customers feelsecure and confident about the offered services Empathy: Ability of business to show care and attention to the customers Basedon the SERVQUALmodel, the customerscan use the social media to evaluate the company’s service quality based on the above-mentioned dimensions and these evaluations are the base for positive customer relationship experience. This model offersthe customersto perform a comparative evaluation of the service quality on the backdrop of their pre-consumption expectations shaped by customer relationship management and the post-consumption perception based on consumer experiences (Parasuraman,1985). 3.2 GAP MODEL GAP Model is another theoretical model related to service quality that can be used by the customers and business to measure the service quality. According to this model, the gap between the customer’s expectations of the offered services and actual services delivered as the service quality(Zeithalm et al., 2012). This model explains that gaps in service quality i.e. expected and shape up the customer’s experience. Based on this model, the below-mentioned gaps have evident impact upon the customer relationship and customer experience
  12. 12. 11 Figure: GAP Model(Lin, 2012) Gap 1 Knowledge GAP The knowledge GAP is the result of lack of knowledge of customer’s expectations about the delivered services. It leads to negative customer relationship experiences mostly due to unfulfilled expectations Gap 2 Standards GAP
  13. 13. 12 This gap is the causeddue to the lack of effective leadership and planning from the side of business. It leads to lack of service quality and efficient customer relationship management(Institute, 2011). Gap 3 Performance Gap The performance gap is the difference betweenservice specifications and the actualservice offered.Greater service gap leads to negative customer experiences. Gap 4 Communication GAP This gap is caused due to the ineffective internal and external communication of the business. The impact of this can be evident upon the service quality as well as the communication of marketing message to the customers leading to failure of effective relationship management. Gap 5 Service GAP The service gap is the result of the difference between customer expectations and perception created by customer experiences. If the expectations of the customers do not match the customer’s perception caused by past experiences,this may cause serious damage to the customer relationship(Hsu et al., 2015). All of the above-mentioned gaps have an evident impact on the customer relationship, service quality and customer experience. However, the modern marketing situations offer tools like social media marketing, relationship marketing, etc. that are capable enough to reduce such gaps(Institute, 2011). 3.3 FISHBONE MODEL The fishbone model shows the cause-effect analysis of different variables. In the case of the customer relationship and customer experience, we can see service quality as a cause for positive customer relationship and customer experience. The service quality is a cause,and the effect is customer relationship and customer experiences(Lostakova & Pecinova, 2014). Thus, to assess the customer relationship and customer experience, it is important to assess service quality. I'd the service quality meets the customer’s expectations, this will lead to strong customer relationship and positive customer experiences(Institute, 2011). On the other hand, if the service quality is below the expectations, negative impact canbe seenin the customer relationship and eventually customer experiences.
  14. 14. 13 CONCLUSION In contemporary marketing scenario, the newtrends and developments have contributed much to enhancing the company’s customer relationship management and consumer experience management(Radojevic et al., 2015). These trends such as social media marketing and relationship marketing have contributed to solving the problems relate to service quality and eventually forwarded remarkable efforts on sound customer relationship and experience management. In this study, based on different models and theories, it has been seenhow the contemporary marketing developments have contributed the businesses in the service industry to take service quality enhancement as a tool to maintain a strong relationship with the customers(Ford et al., 2011).
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