SERVAQUA: Measuring service quality is tap water


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Presentation about measuring service quality in tape water. Presented at the 2013 World Marketing Conference in Melbourne.

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  • Outline problem definition and describe tap water as a service Specific characteristics of tap water services Current service quality models cannot be applied Purpose of this presentation: propose model for service quality measurement in tap water Looking back: existing service quality methodologies ServQual Nordic Model ServAqua hypothesis Looking forward: construct validation
  • Water services are embedded in the natural hydraulic cycle Water never changes ownership – customers pay for usage rights: water is a service, not a product; not widgets, but moments of truth Consumption of water is a reduction in quality; a reduction in the usability of the water. Value is added through purification (increase options for usage) and transport (adding pressure). Natural monopoly: economies of scale prevent new entrants Customers cannot change service provider Without threat of defection, there is no intrinsic motivation to provide customer centric service Markets are regulated to force customer focus Numerous measurement models for service provision exists, but most are internally focused (engineering) instead of customer focused. Majority of literature in water focused on technological aspects of service Water supply is a service factory Low degree of human interaction (Low labour intensity) Minimal customisation High ability to manage heterogeneity Problem No validated customer focused methodology for assessing performance exists Existing service quality models focus on intangible elements and face-to-face service
  • Water quality has two dimensions – safe water and good water Safe water: meeting technical regulations Relates to engineering (rational dimension) Predictable outcomes Intrinsic quality (not directly perceivable by consumer) Quality perceived from the service provider Intangible High in credence qualities Good water: meets customer expectations Relates to sensory customer experience Extrinsic quality: as perceived by customer Perceived from the customer perspective Based on marketing (non rational dimension) Unpredictable High in experience qualities Safe water is a necessary, but not a sufficient condition to ensure customer satisfaction. Service quality paradox: Addition of chemicals necessary to create safe water can lead to lower service quality: chlorine for disinfection; fluoride as tooth decay preventative Service quality: “model of how the quality of service provision is perceived by customers” Decades of research has led to two major models Anglo-Saxon Model (SERVQUAL) Nordic Model
  • Discourse dominated by ServQual by PZB Gap model Consumer compares service provider with ideal service provider e.g. service level of the Langham compared to similar hotels Construct with five dimensions: RATER Four dimensions are related to intangible aspects Dimensionality has been disputed – high intercorrelation Babakus found that service quality in essential services is uni-dimensional: related to the presumed low level of involvement Service quality models are mostly industry specific HedPERF LibQUAL+ ServQual has not been applied to tap water SERVQUAL does not distinguish between process quality and outcome quality SERVQUAL not suitable for tap water Dominated by tangible elements Service factory: Importance of outcome quality over process quality
  • Popularised by Finnish scholar Christiaan Grönroos Context specific evaluation of service – not comparison with class of service providers Expected service influenced by: marketing activities of service provider public image, word-of-mouth and consumer needs Recognises the way the service is provided and the outcome of the service Consumption of services is inseparable from the production the what and the how are connected Interrelationship between technical and functional quality Functional quality more important Good contact between customers and staff can mitigate lower technical quality.
  • ServAqua based models heavily focused on supplementary services, ignoring the tangible elements of service Nordic model most suitable because it can deal better with the tangible elements of the service (outcomes) Lack of customer interaction Technical quality relates to core services, i.e. the provision of water. Functional quality relates to supplementary services Core services are delivered at arm's length Supplementary services are delivered often through direct customer-staff interaction
  • Core service dominated by tangible elements: the water Each opening of a tap is a moment of truth that can be confirmed or disconfirmed. Extrinsic quality: Sensory experience by the customer Evaluation based on experience qualities: Taste, sound, touch, smell, sight. Simplified to pressure and purity Extrinsic to the provision of service Cannot be fully controlled by the service provider Taste, for example, influenced by characteristics of container Intrinsic quality is a technical vector Measured from the customer's perspective Likelihood of expectations not being met The consumer pays a time price Well developed system time price is negligible No water system – high time price (African women) Time price is incurred when the system does not meet expectations How often will the water meet expectations when it is being used? Pressure? Purity? The perfect water company is invisible to the consumer Relates to low involvement.
  • Functional quality expressed in the model described by Babakus Billing accuracy and clarity Reliability and efficiency of services Customer service Safety consciousness Dependability Knowledge level of employees Providing services at the promised time, responsiveness Reassurance and understanding Having customers’ interest at heart Willingness of employees to assist customers Quality of management Billing clarity Politeness of employees Similar to SevQual items
  • Technical Quality (core services): Intrinsic: Likelihood of confirmation of expectations Measured through technology Extrinsic: Consumer perception of technical quality Taste panels Customer surveys Functional quality (supplementary services) Latent variable Basedon uni-dimensional model identified by Babakus (1993).
  • Interviewed six consumer advocacy organisations that deal with water customers Questions geared to find out what constitutes good service Core services High level of service provided in Melbourne “Passive receivers of service” Low involvement with service, but high expectations of level of service Involvement increases when expectations are not met During drought many people became water-aware Supplementary services Financial hardship often mentioned as a determinant of service quality Billing issues (clarity and accuracy) High degree on individual service Monopoly creates risk averse industry Summary Model has a high level of face validity Content validity largely confirmed 15 items from Babakus scale reduced to 13 items Additional issues of low involvement and hardship as possible moderating variables
  • Currently collecting data from water utilities in Victoria Using confirmatory factor analysis to test assumptions of one-dimensional Function quality 13 items based on Babakus (7 point Likert scale) Extrinsic technical quality 7 survey items Testing impact of involvement and hardship as a moderator on service quality
  • SERVAQUA: Measuring service quality is tap water

    1. 1. SERVAQUA Towards a service quality model in potable reticulated water services Peter Prevos PhD Candidate, School of Business Manager Land Development, Coliban Water
    2. 2. 18 July 2013 ServAqua: Service Quality in Tap Water 2
    3. 3. 18 July 2013 ServAqua: Service Quality in Tap Water 3 Tap Water Quality
    4. 4. 18 July 2013 ServAqua: Service Quality in Tap Water 4 Anglo-Saxon Service Quality ● ServQual ● Gap model – Class of firms ● Weighted towards intangible elements ● Focus on process
    5. 5. 18 July 2013 ServAqua: Service Quality in Tap Water 5 Nordic Service Quality ● Context specific ● Process and outcome – Functional quality – Technical quality Grönroos (1990) model of service quality.
    6. 6. 18 July 2013 ServAqua: Service Quality in Tap Water 6 ServAqua Principles ● Based on Nordic Model ● Incorporate service process and outcomes ● Technical quality – Core services ● Functional quality – Supplementary services ● Facilitating ● Enhancing Flower of Service (Lovelock, 1992)
    7. 7. 18 July 2013 ServAqua: Service Quality in Tap Water 7 ServAqua: Core Services ● Technical Quality – Extrinsic ● Experience qualities ● Sensory experience – Intrinsic ● Likelihood of disconfirmation ● Pressure ● Purity ● Consumer pays time price Consumers are mainly interested in sensory qualities of water service
    8. 8. 18 July 2013 ServAqua: Service Quality in Tap Water 8 ServAqua: Supplementary Services ● Functional Quality – Customer understanding – Responsiveness – Information provision – Billing ● Based on model by Babakus (1993) Assisting customers with supplementary services.
    9. 9. 18 July 2013 ServAqua: Service Quality in Tap Water 9 ServAqua Hypothesis
    10. 10. 18 July 2013 ServAqua: Service Quality in Tap Water 10 Content Validity ● Qualitative research – Interviews: consumer stakeholder groups ● Content Validity – Relationship to ability to pay bills – Low involvement – Engineering focus
    11. 11. 18 July 2013 ServAqua: Service Quality in Tap Water 11 Looking Forward ● Quantitative data collection ● Confirmatory factor analysis Online ServAqua survey
    12. 12. “In the past water utilities were managed by engineers. Now they are managed by economists. In the future they should be managed by marketers”