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Servqual model

Servqual model and its uses in service industry.

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Servqual model

  1. 1. The SERVQUAL Model By Group-3 Section-C PGDM- Ist Year
  2. 2. 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 quality 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.
  3. 3. 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. Dimensions Scale Reliability 4 Assurance 5 Tangibles 4 Empathy 5 Responsiveness 4
  4. 4. 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
  5. 5. 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
  6. 6. The SERVQUAL Gaps Gap 1 M a na ge m e nt P e r c e p t io n s o f C u s to m e r E x p e c t a t io n s 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. E x p e c te d S e r v ic e
  7. 7. The SERVQUAL Gaps Gap 2 S e r v ic e Q u a lity S p e c i f ic a t i o n s 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 prerequisites 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? M a na ge m e nt P e r c e p t io n s o f C u s to m e r E x p e c t a t io n s
  8. 8. The SERVQUAL Gaps Gap 3 S e r v ic e D e liv e r y 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. 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. S e r v ic e Q u a lity S p e c i f ic a t i o n s
  9. 9. The SERVQUAL Gaps Gap 4 S e r v ic e D e liv e r y  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. E x te rn a l C o m m u n ic a t io n s to C u s to m e rs
  10. 10. The SERVQUAL Gaps Gap 5 E x p e c te d S e r v ic e • 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. P e r c e iv e d S e r v ic e
  11. 11. 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
  12. 12. Causes for the Gaps 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
  13. 13. Causes for the Gaps GAP 3 - The service performance gap E.g. : XYZ Events Ltd had promised the most exquisite catering and wedding cake, but the food was not appreciable and the bride didn’t like the cake at all. Causes: Poor employee or technology fit - the wrong person or wrong system for the job Deficiencies in human resource policies such as ineffective recruitment, role ambiguity, role conflict Failure to match demand and supply Too much or too little control Lack of teamwork within the organisation
  14. 14. Causes for the Gaps GAP 4 - When promises do not 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. Causes: inadequate horizontal communication Over-promising in external communication campaign Failure to manage customer expectations Failure to perform according to specifications given to customers
  15. 15. Causes for the Gaps GAP 5 - The difference between customer perception of service and the expectation they 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 can be: cultural background, family lifestyle, personality, demographics, advertising, experience with similar service information available online
  16. 16. Solution for the Gaps No Solutions as such, but rather, measures that can be taken to minimize the gaps Gap Definitions Measures 1 Customers’ expectations versus management perceptions Use of good Customer Relationship Management Techniques to profile & know customer’s expectations, tastes and needs E.g: XYZ Events Ltd should conduct sample surveys to know what customers expect nowadays 2 Management perceptions versus service specifications Managers need to make sure the organization is defining the level of service they believe is needed. E.g.: XYZ Events Ltd could have offered pre-set wedding packages at different prices with different services set. 3 Service specifications versus service delivery Managers need to audit the customer experience that their organization currently delivers in order to make sure it lives up to the expected level. E,g.: XYZ Events Ltd needs to ask customers to give their post experience feedbacks 4 Service delivery versus external communication: Use of good Communication skills and avoid ambiguous or fraudulent terms to confuse or mislead the customer. E.g.: XYZ Events Ltd should clearly inform the customer about something that will not be possible to implement 5 The discrepancy between customer expectations and their perceptions of the service delivered Application of all the above measures to make sure the service delivered meets the expectations of the customer
  17. 17. 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.
  18. 18. SERVQUAL; Good or Bad???  SERVQUAL “remains the most complete attempt to conceptualize and measure service quality” – Nyeck, et al. (2002)  The main benefit to the SERVQUAL measuring tool is the ability of researchers to examine numerous service industries such as healthcare, banking, financial services, and education  Nyeck et al. (2002) reviewed 40 articles that made use of the SERVQUAL measuring tool and discovered “that few researchers concerned themselves with the validation of the measuring tool”, which means it is well anchored as a trusted model.  Service Quality is widely regarded as a driver of corporate marketing and financial performance
  19. 19. 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 we deal with. 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 outcome perceptions. service
  20. 20. 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
  21. 21. 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)
  22. 22. 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-forprofit 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
  23. 23. 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.