2. UNIT II SYLLABUS
Service Marketing Strategies:
Segmentation, Targeting, positioning.
Understanding customer expectation & zone of
tolerance.
Delivering Quality Service:
Challenges faced while measuring service quality,
The customer expectation Vs perceived service
gap,
3. Measures of service quality,
SERVQUAL & GAP model.
Application of elements of service marketing mix in
BFSI sector, Education, Telecom, Hospitality
(Travel, Tourism & hotels), Health (Hospitals).
Role of IT and emerging technologies in service
marketing
4. Course Outcomes: After completion of the course,
student will be able to:
CO1: Identify the concepts & practical applications of
service marketing.
CO2: Outline the role of people, physical evidences &
processes in service marketing.
CO3: Highlight the skills required in service
communication that differs substantially from those of
goods marketing.
CO4: Infer the concept of service quality model and
highlights the gaps in service delivery
CO5: Interpret applications of elements of service
marketing mix in banking, education, telecommunication
and hospitality industry.
9. INTRODUCTION
Segmentation, targeting and positioning are strategic
fundamentals of marketing used to generate competitive
advantage
Segmentation is the basis on which a market is defined
Service firms vary widely in terms of their ability to serve
Hence, it is not advisable to compete in the entire
market
Instead, for best results, organizations need to focus
upon the customers whom they can serve the best.
10. SERVICE MARKET SEGMENTATION
Most service providers face active competition
Marketers need to find meaningful competitive
advantages
The nature of services introduces a number of
distinctive possibilities for competitive
differentiation, including
location,
scheduling,
speed of service delivery, and
the caliber of service personnel
11. For a service organization, the focus can be
described on two dimensions- the service focus and
the market focus.
Taking the two variables of service offered and the
market served, organizations can be grouped into
four types:
Unfocused
Service focused
Market focused
Fully focused
12.
13. Market segmentation is defined as the process of
dividing the market into distinct groups that share
common characteristics, needs, purchasing
behavior, or consumption patterns.
It is a strategy that recognizes the need of
‘specialization’ to suit the needs of a segment of
the market rather than trying to be ‘all things to all
people’.
14.
15. SERVICE MARKET SEGMENTATION
Mass customization-a service with some
individualized elements for large numbers at low
prices
Microsegmentation- strategies targeting small
groups that share certain features at a specific point
of time using advanced databases and software
Some market segments offer better opportunities
than others
16. TARGETING
Targeting is the choice of a single segment or group
of segments that the organization wishes to select.
Companies can evaluate and select market
segments on the basis of
Segment size and growth
Segment structural attractiveness
Company objectives and resources
17. MARKET COVERAGE STRATEGY
The target market selection involves the dynamic
process of matching the changing variety of goods
and services with the changing variety of customer
wants.
Companies need to consider several factors while
choosing a market coverage strategy. Some of
them are as follows:
Company’s resources
Degree of product homogeneity
Product life cycle stage
Market homogeneity
Competitor’s marketing strategies
18. SERVICE MARKET SEGMENTATION:
POSITIONING
Consumers often make their choices from
alternative services based on perceived differences
among them
Determinant attributes are those that determine
buyers’ choices among alternatives
The concept of positioning is valuable as it leads to
clear recognition of the various attributes
Positioning links market analysis and competitive
analysis to internal corporate analysis
19. Anticipating competition’s response is also significance
before choosing a specific action plan
Positions are rarely static. They keep on evolving
Positioning maps (perceptual maps) are used to plot
competitive strategy
Future scenarios should be mapped to identify potential
responses
Positioning charts should be used to help visualize
strategy
SERVICE DIFFERENTIATION
20. SERVICE DIFFERENTIATION
Service Differentiation may be offering greater
performance benefits or better aesthetics than
competition.
Company can position its service as a low, medium or
high-featured service that satisfies the needs or wants
of a particular market segment.
If it is competing with other similarly featured products,
relevant improvements/differences (i.e., product size,
performance, delivery) are to be made in the offering to
make exact price comparisons difficult.
21. In services, the last
experience remains uppermost
in your mind. Therefore, it is
not enough to be good, you
have to be consistently good
22. CUSTOMERS HAVE NEEDS & EXPECTATIONS
Customers buy goods and services to meet specific
needs
Many affluent consumers have most of the physical
goods and are thus turning to services to fill new or
still unmet needs
Consumers want ‘memorable experiences’
Companies intend to engage customer’s interests
through interactive products
23. HOW EXPECTATIONS ARE FORMED
Customers’ expectations about good services vary
from one business to another
Expectations also vary in relation to different
service providers from the same industry
Also they evaluate the quality against an internal
standard that existed prior to service
Expectations change over time influenced by
supplier factors as well as social factors
24. COMPONENTS OF CUSTOMER EXPECTATIONS
Customers expectations embrace several
elements, including
desired service,
adequate service,
predicted service and
a zone of tolerance
25. DESIRED AND ADEQUATE
SERVICE LEVELS
The type of service customers hope to receive is
termed as desired service
It is termed as ‘wished-for’ level: a combination of
what customers believe can and should be
delivered in the context of their personal needs
Most customers are realistic and understand that
companies can’t always deliver the desired level
So they also have a threshold level of expectations,
termed as adequate service
26. DESIRED AND ADEQUATE
SERVICE LEVELS
Adequate level is the minimum level of acceptable
service without being dissatisfied
The expectation of adequate level is also set based
on situational factors and expected service from
alternate suppliers
The levels of both may reflect explicit and implicit
promises by provider, word-of-mouth comments
and past experiences
27. PREDICTED SERVICE LEVEL
It is that level of service which customers
anticipate to receive which affects how they define
‘adequate service’ on that occasion
If good service is predicted, the adequate level
will be higher than if poorer service is predicted
Customer prediction of service may be situation
specific
28. ZONE OF TOLERANCE
The inherent nature of services makes consistent
service delivery difficult across employees or even
by the same employee
The extent to which customers are willing to accept
this variation is called the ‘zone of tolerance’
A performance falling below adequate service level
will cause frustration and dissatisfaction, whereas
the one exceeding will both please and surprise the
customers
29. ZONE OF TOLERANCE
It is the range of service within which customers
don’t pay explicit attention to service performance
When service falls outside this range, customers
will react either positively or negatively
It can increase or decrease depending on such
factors as competition, price or specific service
attributes
30.
31. (GOOD) QUALITY SERVICE VS SERVICE QUALITY
• Quality service basically means good service like we say
quality product which implies good product
• In contrast to it, service quality implies the quality of the
service being offered. It may be good, average or bad
• So the placement of the word quality makes a difference
as to whether it is placed before service or after service
• When we place the word quality before service, it
means by default the service is good whereas when
we place the word after service, it means we need to
judge whether the service is good or not
32. DELIVERING (GOOD) QUALITY SERVICE
• Today, customers are more knowledgeable and
demanding than ever; they know what they want and
how they want it delivered.
• They're very vocal and hence quick to criticize poor
performance
• Implementing (good) quality customer services takes
more than just snapping your fingers.
• Delivering quality is a long-term, far-reaching and
continual process affecting departmental practices in
every area.
• This is very much applicable on services
33. DELIVERING (GOOD) QUALITY SERVICE
• Excellence in customer service is the hallmark of
success in service industries and among
manufacturers of products that require reliable service.
• But what exactly is excellent service?
• It is the ability to deliver what you promise, but
first you must determine what you can promise. .
34. SO WHAT EXACTLY IS SERVICE QUALITY!
Service quality generally refers to a customer’s
comparison of service expectations as it relates to a
company’s performance.
A business with a high level of service quality is likely
capable of meeting customer needs while also remaining
economically competitive in their respective industry.
35. SO WHAT EXACTLY IS SERVICE QUALITY!
Successful businesses who remain competitive and
relevant in the marketplace work proactively to obtain
information from their current or potential customer base
so they can ensure they are meeting their needs.
No amount of discussing with professionals, friends, or
colleagues will ever replace the information that a
company can receive from a real customer.
36. THE 5 SERVICE DIMENSIONS ALL CUSTOMERS CARE
ABOUT
The five SERVQUAL dimensions are:
TANGIBLES-Appearance of physical facilities, equipment, personnel, and
communication materials
RELIABILITY-Ability to perform the promised service dependably and
accurately
RESPONSIVENESS-Willingness to help customers and provide prompt
service
ASSURANCE-Knowledge and courtesy of employees and their ability to
convey trust and confidence
EMPATHY-Caring, individualized attention the firm provides its
customers
37. It is difficult to provide exclusivity to the services. This is
so because they cannot be patented or copyrighted.
Standardized and customized flow of activities along
with multiple steps engaging customer involvement is an
aspect of process mix. This is on similar lines as other
mixes of marketing mix.
The gap model talks about the difference between
customer service expectation and perception, also
known as customer gap.
Majority of the advanced nations, particularly USA, has
the major chunk of GDP coming from services
38.
39. 1. Core Benefit
The core benefit is the fundamental need or want that
satisfies the customer when they buy the product.
For example, the core benefit of a hotel is to provide
somewhere to rest or sleep when away from home.
Generic Product
The generic product is a basic version of the product made
up of only those features necessary for it to function.
In our hotel example, this could mean a bed, towels, a
bathroom, a mirror, Wi Fi, and a wardrobe.
40. Expected Product
The expected product is the set of features that the
customers expect when they buy the product.
In our hotel example, this would include clean sheets,
some clean towels, fast Wi-Fi, and a clean bathroom.
Augmented Product
The augmented product refers to any product
variations, extra features, or services that help
differentiate the product from its competitors.
In our hotel example, this could be the inclusion of a
concierge service or a free map of the town in every
room.
41. Potential Product
The potential product includes all augmentations and
transformations the product might undergo in the
future. In simple language, this means that to
continue to surprise and delight customers the
product must be augmented continuously.
In our hotel example, this could mean a different gift
placed in the room every time a guest stays. For
example, it could be some chocolates on one
occasion, and some luxury water on another. By
continuing to augment its product in this way the
hotel will continue to delight and surprise the
customer.
42. WHAT IS QUALITY
Quality can be defined as the characteristic of the
service that bear upon its ability to meet customer
requirements
Customer requirements can be of following three
types:
Those stated by the customer
Those generally implied as provided by similar services,
and
Those obligatory on the part of the service provider. For
example, information on price
43. In the case of services, customer requirements
consist of
The service outcome, that is, the reason why
customers purchased the service on the first place, or,
what is left with the customer after the service is over,
and
The expectations of the customer, that is, the manner
in which (or how) the service is delivered to the
customer
44. So, one is what is to be provided to the customers
to satisfy their needs and the second one is the
expectations of the customers which have to be
made.
For example you might be hungry and you would
have visited a restaurant which provides pizzas.
Now what you need is a pizza to satisfy you hunger,
but you also expect that the pizza will be served to
you properly or you need to be fitting manner.
45. On the contrary, if the pizza is made and just thrown
at your plate then you would be very offended with
that service and you would complain and you would
never come back to purchase that service, to eat
the pizza at that particular restaurant.
So, the customer requirements consists of the
service outcome that is what is left when the
service is over and the expectations of the
customer that is how the service has to be provided
to the customer.
46. WHAT IS CUSTOMER SATISFACTION?
Customers are satisfied when their
requirements are met.
It is dependent upon the quality of the services and
the value that the customer receives from the
service.
The value received by a customer is the difference
between the benefits received from the service and
the costs incurred for receiving those benefits
47. Customers are dissatisfied when their requirements
are not met.
Customers are delighted when the delivered
service exceeds their expectation of the
requirements that would be met by the service. So
48. IN GENERAL,
Marketing cannot operate in isolation from other
functional areas
Poor quality places a firm at a competitive
disadvantage
Customers notice competing suppliers’ differences
in quality
49. Improving productivity is important to marketers for
several reasons
Quality and productivity are twin paths to
creating value for both customers and
companies
The word quality means different things to people
according to the context
Success normally requires close coordination of the
activities of each function
50. SERVICE QUALITY
Service quality (SQ) is a comparison of perceived
expectations (E) of a service with perceived
performance (P), giving rise to the equation
SQ=P-E.
A business with high service quality will meet or
exceed customer expectations whilst remaining
economically viable/feasible/sustainable and
competitive.
51. SERVICE QUALITY
It reflects at each service encounter.
Customers form service expectations from past
experiences, word of mouth and marketing
communications.
In general, customers compare perceived (received)
service with expected service, and if the former falls
short of the latter the customers are disappointed.
In services, productivity implies better service processes
and outcome to improve customer satisfaction
52. SERVICE QUALITY
The quality components can be contrasted
between manufacturing and services
In manufacturing, such concepts as performance,
features, reliability, conformance, durability,
serviceability, aesthetics and perceived quality
define quality
The service based components related to quality
are tangibles, reliability, responsiveness,
assurance and empathy
53. SERVICE QUALITY
Comparing performance to expectations works well in
reasonably competitive markets where customers are
free to make choices
However, in uncompetitive markets or when customers
are not free to make choices, there are risks to defining
service quality
Satisfaction based research into quality assumes that
customers are dealing with services high in search or
experience characteristics
54. SERVICE QUALITY
It is difficult for customers to evaluate the quality of
services high on credence characteristics
Process factors include customers’ feelings about
the providers’ personal style (of functioning) and
satisfaction levels with supplementary elements
Customers should be taken through each step of
service encounter, a walk-through audit (overview),
to help them recall and evaluate their service
experiences
55. HOW TO DELIVER EXCELLENT SERVICE
QUALITY
Defining excellent service is not a one-way street. It
depends on how the customer experiences the service.
Great service climate (setting) is a key to excellent
service quality
The concept of service climate plays an important role in
understanding how to deliver excellent service quality, as it
captures what employees experience in terms of
organizational practices regarding service delivery.
It also influences employee motivation regarding service
behavior.
56. If employees experience excellent service quality
on the inside, they are more likely to be motivated
to deliver excellent quality on the outside of the
organisation.
Thus a strong service climate leads to excellent
service quality.
In order to create a great service climate and
deliver excellent service quality, these three key
components need to be in place
57. Service Strategy
With a service strategy, the service provider can decide the
service parameters, build the service value chain and
design the internal service platform.
The stronger each of these elements are - the better and
more robust the service strategy will be.
Service Performance
Research highlights that training, empowerment and
rewards are the three most significant factors, which
determine the level of performance and, in turn, lead to
delivery of service strategy and excellent service quality.
58. Customer Results
Service quality is centered on the perception
and experience of the customer. Hence, measuring and
tracking customer results are ways to provide feedback
to the service delivery chain and to increase the value of
each customer relationship.
59. EVOLUTION OF SERVICE QUALITY CONCEPT
Service quality is very difficult to define and measure, due to
the inherent intangible nature of services, which are often
experienced subjectively
Service quality is seen as having two basic dimensions:
Technical quality: What the customer receives as a result
of interactions with the service firm (e.g. a meal in a
restaurant, a bed in a hotel)
Functional quality: How the customer receives the service;
the expressive nature of the service delivery (e.g. courtesy,
attentiveness, promptness)
The technical quality is relatively objective and therefore
easy to measure. However, difficulties arise when trying to
evaluate functional quality
60. CHALLENGES OF MEASURING SERVICE
QUALITY
The question of how to measure service quality depends
upon what is to be measured.
Such terms as
SERVQUAL (Service Quality),
SERVPERF (Service Performance),
DINESERV ( a tool for determining how consumers view a
restaurant's quality),
61. LODGSERV & LODGQUAL ( tools to measure
consumers' expectations for service quality in the hotel
experience), and more recently
GROVQUAL (A new research tool for measuring
excessive "service" in hospitality),
HOLSAT (the satisfaction of religious tourists is
examined using holiday satisfaction model)
have become common parlance among academics
and practitioners
The most critical challenge for managers is to
identify and implement the most appropriate
methods for measuring the quality of the service
experience
62. When it comes to services however there are some
challenges posed by their intangible nature
When purchasing services, the customer is usually
interested in the outcome or experience being
provided.
This means that the quality of the service is based
on an subjective evaluation from the point of view of
the customer
63. This makes it more difficult for the service provider
organization to objectively measure service quality.
These challenges, however, can be overcome
through a structured approach to measuring,
analyzing and improving service quality.
64. The first step of improving service quality is to start
measuring service quality; it is hard to improve that
which is not measured.
The second step is to start identifying gaps
between the customers’ perception of service
quality and the service provider’s desired level of
performance.
The final step is to use this new-found information
to look for ways to improve service quality.
65. MEASURING SERVICE QUALITY
When it comes to ensuring service quality, there are two
important aspects to consider:
the customer’s expectations (before the service experience)
and the customer’s perception regarding/about the service
provider’s delivered performance (after the service experience).
If the perceived (delivered) performance exceeds expectations,
the customer can be considered delighted. If it is as per the
expectations, then the customer will be satisfied.
If the expectations are not met by the perceived (delivered)
performance, the customer will typically be dissatisfied.
These expectations and the resulting perception of performance
can be analyzed along five dimensions: responsiveness,
assurance, tangibles, empathy and reliability.
66. HERE ARE 9 PRACTICAL TECHNIQUES AND METRICS FOR
MEASURING SERVICE QUALITY
SERVQUAL
This is the most common method for
measuring the subjective elements of service
quality.
Mystery Shopping.
Post-service Rating.
Follow-Up Survey.
In-App Survey.
Customer Effort Score (CES) .
Social Media Monitoring.
Documentation Analysis.
Objective Service Metrics
67. Mystery Shopping
This is a popular technique used for retail stores, hotels,
and restaurants, but works for any other service as well.
It consists of hiring an "undercover customer" to test
your service quality – or putting on a fake moustache
and going yourself, of course.
Post-service Rating
Under this, the service user is asked to give his/her
rating with regard to the quality of the service which s/he
has availed.
68. Follow-up Survey
Under this, the service provider sends a survey to the
person who received the service to follow-up on their
experience and whether they intend to avail the service
again in future and if no then why.
In-app Survey
As the name suggests, the survey is conducted while
the person is using the app of a service provider
wherein the service provider asks questions related to
the experience. It gives real-time inputs
69. Customer Effort Score (CES)
Instead of delighting the customers, it should be made
as easy as possible for them to have their problems
solved. This is so because while the costs of
exceeding service expectations are high, they show
that the payoffs are marginal.
Don’t ask: “How satisfied are you with this service?” or
“Did you like the service as per your expectations?” – its
answer could be distorted by many factors, such as
politeness. Ask: “Do you appreciate the efforts being put
by the organization to fulfill your expectations?” or “Do
you appreciate the employees for what they did for
you?”
70. Documentation Analysis
With this qualitative approach you read or listen to your
respectively written or recorded service records. You’ll
definitely want to go through the documentation of low-
rated service deliveries, but it can also be interesting to
read through the documentation of service agents that
always rank high. What are they doing better than the
rest?
Social media monitoring
As it implies, the service provider, through its various
social media pages, intends to profile how and which
type of customers visit its various pages
71. Objective Service Metrics
These stats deliver the objective, quantitative analysis
of your service. These metrics aren’t enough to judge
the quality of your service by themselves, but they play
a crucial role in showing you the areas you should
improve in.
72. MEASURING SERVICE QUALITY
Without measurement, managers can’t be sure
whether service quality gaps exist
Measurement is needed to determine whether
goals for improvement are being met after changes
have been implemented
Customer-defined standards and measures of
service quality can be grouped as soft and hard
73. SOFT AND HARD SERVICE QUALITY
MEASURES
Soft measures are those that cannot be easily
observed and must be collected by talking to
customers, employees or others
Soft standards provide direction, guidance and
feedback to employees on ways to achieve
customer satisfaction thus dealing with customer
perceptions and beliefs
74. SOFT AND HARD SERVICE QUALITY
MEASURES
By contrast, hard standards and measures relate to
those characteristics and activities that can be
counted, timed, or measured through audits
Such measures could be number of calls, waiting
time, time required to complete a task, temperature
of a food item, etc.
Standards are often set with reference to the
percentage of occasions on which a particular
measure is achieved
75. SOFT MEASURES OF SERVICE QUALITY
Ongoing research should be conducted through a
portfolio of research approaches
Ongoing surveys of account holders by telephone
or mail, or by scientific sampling procedures to
determine customers’ satisfaction
Customer advisory panels to offer feedback
Employee surveys and panels to determine
perceptions of the quality of service delivered
76. HARD MEASURES OF SERVICE QUALITY
They typically refer to operational processes or
outcomes and include such data as uptime, service
response times, failure rates, and delivery costs
Control charts offer a simple method of displaying
performance over time against specific quality standards
In an organization as large as FedEx, which ships
millions of packages in a day, delivering even 99% of
packages on time or 99% of accuracy would lead to
serious problems. So, here the hard measures of quality
are taken into account with the standard as zero failures
and no-error policy
77. TOOLS FOR ANALYZING SERVICE QUALITY
PROBLEMS
When a problem is caused by controllable, internal
forces, there’s no excuse for allowing it to reoccur
Maintaining customers’ goodwill after a service
failure depends on keeping promises made
Steps should be taken to the effect that “we’re
taking steps to ensure that it doesn’t happen again!”
78. TOOLS FOR ANALYZING SERVICE QUALITY
PROBLEMS
Root-Cause Analysis: The Fishbone Diagram
Cause-and-effect analysis uses a technique developed by a
Japanese expert
Groups of managers and staff brainstorm all the possible
reasons that might cause a specific problem
The resulting factors are then categorized into one of five
groupings – equipment, manpower (people), material,
procedures and other – on a cause-and-effect chart,
popularly known as fishbone diagram
79. TOOLS FOR ANALYZING SERVICE QUALITY
PROBLEMS
Root-Cause Analysis: The Fishbone Diagram
People can be further divided into front-stage personnel
and backstage personnel
The front-stage problems are experiences directly by
the customer whereas backstage failures tend to show
up as ripple effect.
In manufacturing, customers have little impact on day-
to-day operational processes, but in high-contact
services they are involved in front-stage operations
80.
81. TOOLS FOR ANALYZING SERVICE QUALITY
PROBLEMS
Pareto analysis seeks to identify the principal
causes of observed outcomes. It underlines the 80/20 rule. It
says that 80 percent of the value of one variable is accounted
for by only 20 percent of the causal variable
In the case of one of the American airlines, findings show that
88 percent of late-departures are caused by only 15 percent
of all the possible factors. In fact, more than half of the
delays are caused by a single factor: acceptance of late
passengers.
83. TOOLS FOR ANALYZING SERVICE QUALITY
PROBLEMS
Blueprinting
A well-constructed blueprint is a powerful tool for
identifying fail points where failures are most likely to
occur
They help to understand how failures at one point may
have ripple effect later in the process
Using frequency counts, managers can identify the
specific types of failures that occur most frequently and
thus need urgent attention
84. TOOLS FOR ANALYZING SERVICE QUALITY
PROBLEMS
Blueprinting
One desirable solution is to design fail points out of the
system
In the case of failures that cannot easily be designed
out of a process or are not easily prevented, solutions
may center on development of contingency plans and
service recovery guidelines
Knowing what can go wrong where is an important step
in preventing service quality problems
85.
86. RETURN ON QUALITY
Despite the attention paid to improving service quality,
many companies have been disappointed by the
results
Spending too much on service quality improvements
doesn’t yield favorable results sometimes
Such outcomes reflect poor or incomplete execution
of quality program
In other cases, improved measures of service quality
do not necessarily translate into higher sales or
increased profits
87. RETURN ON QUALITY
Hence, a Return on Quality (RoQ) approach has
been advocated in this regard
It is based on the assumptions that
Quality is an investment
Quality efforts must be financially accountable
It is possible to spend too much on quality
Not all quality expenditures are valid
An important implication of this approach is that
quality-improvement efforts may benefit from being
related to productivity-improvement programs
88. RETURN ON QUALITY
To determine the feasibility of new quality-
improvement efforts, they must be accounted for in
advance and then related to anticipated customer
response
Optimal Level of Reliability should be Determined
The cost of service recovery is lower than the cost of an
unhappy customer
A company, with poor service quality, might achieve big
jumps in reliability with modest investments in
improvements
89. SERVQUAL
SERVQUAL is an instrument to measure customer
satisfaction with different aspects of service quality
The SERVQUAL scale includes the five dimensions
mentioned before
SERVQUAL scores measure two factors:
Intrinsic service quality (resembling functional quality)
Extrinsic service quality (the tangible aspects of service
delivery, resembling technical quality)
90. SERVQUAL
Reliability
Dependable, accurate performance
Assurance
Competence, courtesy, credibility, and security
Tangibles
Appearance of physical elements
Empathy
Easy access, good communications, & customer understanding
Responsiveness
Promptness and helpfulness
The mnemonic RATER is used to recall
Out of the five, only reliability has direct parallel to
quality parameters of manufacturing
91. This framework was developed in 1977 by Zethaml,
Parasuraman, and Berry.
This was the most complete attempt at building a framework
for thinking about and measuring service quality.
It originally used ten aspects of service quality: competence,
courtesy, credibility, security, access, communication,
knowing the customer, tangibles, reliability, and
responsiveness.
In 1988 seven of these were collapsed into assurance and
empathy, leading to the simplified dimensions found
in RATER.
92. These dimensions are not completely independent.
For example, the quality of the facilities, considered
under tangibles, can have an affect on the customer’s
level of confidence, considered under assurance.
They are also not necessarily equal in importance.
The importance of each dimension may depend on
the specific services being provided as well as on
the specific customers and their needs and
expectations.
93. This leads to some challenges with
using SERVQUAL as a quantitative model for
measuring service quality.
But the dimensions provide a useful qualitative
model for analyzing and improving service quality.
94. SERVICE QUALITY GAPS
With a framework in place to analyze customer
expectations and perceptions of service quality, the
next step is to look for gaps between expected
performance and perceived performance.
95. For the service provider to satisfactorily perform
services, it must understand customer
expectations, be able to perform according to those
expectations and communicate effectively with the
customer throughout the entire process.
Each customer’s expectations will be influenced by
the provider’s communication as well as by other
external factors, including previous experiences
and input from other customers.
96. Service Quality
Specification
Needs / Experiences /
Reputation
Customer
Expectations
Customer
Perception
Service
Delivery
Communication
Understanding of
Expectations
97. There can be gaps during each one of these steps.
The service provider organization may fail to
understand customer expectations.
Even if the expectations are understood, the
provider may fail to translate those expectations
into adequate service quality specifications.
98. Even if the service quality specifications are
adequate, the organization may fail to deliver
according to those standards.
Lastly, there may be a mismatch between what the
organization is able to achieve and what it is
communicated to the customer.
The combined gaps in any of these steps will
ultimately create a gap between what customers
expect and how they perceive the organization’s
performance
99. THE GAP MODEL: A CONCEPTUAL TOOL TO
IDENTIFY AND CORRECT SERVICE QUALITY
PROBLEMS
Quality entails consistently meeting or exceeding
customers’ expectations
The manager’s task is to balance customer expectations
and perceptions and to close any gaps between the two
Potential gaps have been identified within service
organization
These gaps may lead to a final and most serious gap:
the difference between what customers expected and
what they perceived was delivered
100.
101. 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. Management Perception – 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.
102. 3. Service Quality Specification – 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. Service Delivery - 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
103. EXPECTED SERVICE-PERCEIVED SERVICE
GAP
5. These four gaps cause a fifth gap (Gap 5) known
as Expected service-perceived service Gap 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
then gap 5 will close.
104. IMPROVING SERVICE QUALITY
The actual steps required to improve service quality
will depend on the specific situation, but they can
be grouped into three categories:
understanding, performance, and
communication.
The best way to improve understanding of
customer needs and expectations is to increase the
amount of time that members of the organization,
including management, spend observing and
interacting with customers.
105. IMPROVING SERVICE QUALITY
Improving performance will depend on the specific
services being performed. The approaches
however fall into two categories.
One approach is to invest in creating service quality
standards and developing rigorous training
The other approach is to hire great people, work
hard to retain and motivate them, coach them in
areas where they need improvement, and give
them the freedom to delight customers
106. IMPROVING SERVICE QUALITY
Communication (improper, incomplete) can easily
undo all of the hard work put into
improving understanding and performance
All communications should reflect an understanding
of the customer’s needs and expectations and
consider the organization’s ability to perform
according to those expectations.
107.
108. Gap1: Customers’ expectations versus management
perceptions: as a result of the lack of a marketing research
orientation, inadequate upward communication and too many
layers of management. ·
Gap2: Management perceptions versus service
specifications: as a result of inadequate commitment to service
quality, a perception of unfeasibility, inadequate task
standardisation and an absence of goal setting.
· Gap3: Service specifications versus service delivery: as a
result of role ambiguity and conflict, poor employee-job fit and
poor technology-job fit, inappropriate supervisory control systems,
lack of perceived control and lack of teamwork.
THE GAP MODEL: A CONCEPTUAL TOOL TO
IDENTIFY AND CORRECT SERVICE QUALITY
PROBLEMS
109. Gap4: Service delivery versus external
communication: as a result of inadequate
horizontal communications and propensity to over-
promise. ·
Gap5: The discrepancy between customer
expectations and their perceptions of the
service delivered: as a result of the influences
exerted from the customer side and the shortfalls
(gaps) on the part of the service provider. In this
case, customer expectations are influenced by the
extent of personal needs, word of mouth
recommendation and past service experiences.
110. Gap6: The discrepancy between customer expectations and
employees’ perceptions: as a result of the differences in the
understanding of customer expectations by front-line service
providers.
Gap7: The discrepancy between employee’s perceptions and
management perceptions: as a result of the differences in the
understanding of customer expectations between managers and
service providers.
The three important gaps, which are more associated with
the external customers are Gap1, Gap5 and Gap6; since they
have a direct relationship with customers.
111. The strength of Gap Methodology is that it offers
generic insights and solutions that can be applied
across different industries
What it doesn’t attempt is to identify specific quality
failures that may occur in particular service
businesses
Each firm needs to develop its own customized
approach to ensure that service quality becomes
and remains a key objective
112. SERVICE PRODUCTIVITY
Measuring productivity is difficult in services when
the output is hard to define
A major problem in measuring service productivity
concerns variability
The problem is that productivity measurement
focuses on outputs rather than outcomes
The measurement task is relatively simpler in
possession-processing services such as garage
service, QSRs
113. IMPROVING SERVICE PRODUCTIVITY
Careful control of costs at every step in the process
Teaching employees how to work more productively to
decrease the number of mistakes
Broadening the array of tasks that a service worker can
perform
Providing employees with equipment and databases
Installing expert systems that allow professionals to take
on work previously performed
114. CUSTOMERS’ ROLE IN IMPROVING SERVICE
PRODUCTIVITY
Customer-driven approaches need to be formed to
improved productivity
If customers are deeply involved (typically, people-
processing services), it should be examined as to how
customers’ inputs can be made more productive
Demand should be managed in capacity-constrained
service businesses
By shifting demand away from peaks, managers can
make better use of their assets and provide better
service
115. CUSTOMERS’ ROLE IN IMPROVING SERVICE
PRODUCTIVITY
Customers who assume a more active role in the
service production and delivery process can take over
some labor tasks from the service provider
Automation has been handy in terms of enabling
customers perform many tasks which were previously
performed by employees
Some customers may be more willing than others to
serve themselves
Quality and productivity improvements often depend on
customer’s willingness to learn new things
116. IMPACT OF SERVICE PRODUCTIVITY ON
QUALITY AND VALUE
Productivity should be examined from broader
perspective of business processes
Business process management helps to position
service productivity against quality and understand
customer satisfaction linkage with productivity
The marketing implications of backstage changes
depend on whether they affect or get noticed by
customers
117. IMPACT OF SERVICE PRODUCTIVITY ON
QUALITY AND VALUE
Backstage changes may have a ripple effect that
extends front stage and affects customers
Technological changes are often made by
specialists who may not have been briefed on
customer concerns
In high-contact services, many productivity
enhancements are quite visible
In the absence of new technology, most attempts to
improve service productivity tend to center on
efforts to eliminate waste and reduce labor cost
118. SERVICES MARKETING MIX IN HOSPITALITY
(OVERNIGHT HOTEL STAY)
Physical
Evidence
Contact
Person
Customer
Invisible
Process
(Back Stage)
(On Stage)
Arrive
Hotel
Exterior
Parking
Carts
for
Bags
Give
Bags
Greet
Take
Bags
Desk
Lobby
Key
Check
In
Process
Papers
Paper
System
Take bags
to room
Delivery
Bags
Receive
Bags
Cart
for
Bags
Go to
Room
Elevators
Hallways
Room
120. SERVICE MARKETING MIX IN TELECOM
Company provides services like
• Postpaid connections, Prepaid connections, Airtel D2h,
Airtel Internet, Airtel landline, Airtel Money
• Pricing
• Calling charges, roaming charges, plan charges, VAS
charges, processing fee, etc.
• Promotion
• Hoardings, TVC, radio, personal selling, sales
promotion, internet, e-mails
121. SERVICE MARKETING MIX IN TELECOM
Place
Airtel zone, customer service center, dealers, regional office,
kiosks
Physical evidence
SIM, documents, bills, dongle, STB, remote, mobile phones
People
Staff, customer, peers, technicians, dealers, BPO workers
Process
Making it possible for the customer to get the best of the
services. How to get sim, internet connection, landline
connection
122. SERVICE MARKETING MIX IN HEALTH
Product
Consultancy, surgery, treatment
Price
Bills, consultation fee, room charges, operating charges
Promotion
Word of mouth, hoardings, newspapers, magazines,
local media
123. SERVICE MARKETING MIX IN HEALTH
Place
Location, branches (in case of chain hospitals)
Physical evidence
Bed, reception, instruments, uniform, lounge, parking,
canteen, bills, medicine counter
People
Doctor, nurse, receptionist, patient, family, co-patients
Process
Of operation, of dealing with bills, of dealing with kins
125. SERVICE MARKETING MIX IN BANKING/
INSURANCE
Place
Branch, website, kiosks
Physical evidence
Policy document, ATM, passbook, token, debit/credit card,
offer document, pamphlets
People
Customers, employees, references
Process
Of opening account, of availing policy, of trading, of online
banking, of paying the loan, of earning interest
127. SERVICE MARKETING MIX IN EDUCATION
Place
Branches, location, city offices, kiosks
Physical evidence
Classroom, library, lab, canteen, hostel rooms, ACs,
projector, table chairs, water taps, mess food, prospectus,
posters
People
Teacher, principal, students, parents, management, non-
teaching, co-students
Process
Of admission, of getting grades, of promotion to a higher
class, of transfer, of detention, of rustication
128. MISCELLANEOUS…
Marketing is both art and science
It was McCarthy who came up with the concept of 4
Ps in Marketing and not Kotler
VALS (Value and Lifestyles) is a research
methodology used for psychographic market
segmentation. It is much used in services marketing
Productive labour produces goods which could be
stored and can be exchanged in future
129. On the other hand, unproductive labour creates
service which can’t be stored for future
consumption and hence perishable in nature
It is consumer, and not customer, who actually
consumes a product
‘Societal marketing concept’, states that companies
should deliver customer satisfaction in a way that
improves both the consumer’s and society’s
wellbeing.
130. Customer delivered value is the difference
between total customer value/perceived benefits
and total customer cost/ perceived sacrifices
Total customer cost consist of Monetary cost, Time
cost, Psychic cost and energy cost
Product concept is an elaborated version of the
product idea expressed in meaningful consumer
terms
131. Consumers who are last to adopt a product are
known as laggards
Innovation diffusion process is the spread of new
idea from its source of invention
Booz, Allen and Hamilton (1982) suggested that 2
principal dimensions need to considered:
i. How new is the product to the company?
ii. How new is it to the marketplace?
132. ROLE OF I.T. IN SERVICE MKTG.
Information-based services, both mental stimulus-
processing and information-processing services,
gain the most from the advances in I.T.
Telecom and internet allow the operation to be
physically separated from customers
A growing number of banks are adding internet
capabilities
133. ROLE OF I.T. IN SERVICE MKTG.
Also, web is having increasing impact on
distribution strategy
As we understand, service marketing demands
more personalized services which requires
personalized communication.
Technologies like SFA(Sales Force Automation)
and CRMs are good examples of how technology
can help in winning customer’s loyalty.
134. Service marketing requires up-to-date information
regarding the communications happened between
the service provider and the customer.
Information-based services are less likely to face
capacity limitations
Technology is a pretty good enabler for the
extended Ps of service Marketing.
ROLE OF I.T. IN SERVICE MKTG.
