The document discusses key aspects of service quality management. It defines services in several ways and notes their intangible nature. Services are characterized by intangibility, inseparability, variability, perishability, and customer participation without ownership. The document outlines various classifications of services and introduces the service process matrix. It then discusses dimensions of service quality using the gaps model to identify six potential gaps: knowledge, policy, delivery, communication, perception, and quality. Suggestions are provided for closing these gaps through improved communication and monitoring of soft and hard quality measures. Tools like surveys, control charts, fishbone diagrams, and blueprinting are presented to analyze problems and ensure high service quality.

1. Chapter-8
Service Quality Management

2. • What are services?
The word service originally associated with the work
performed by servants for their masters.
“ the action of serving, helping or benefiting; conduct tending
to the welfare or advantage of another”
Services are acts, deeds, performance or efforts.
The aim of service is to provide solution to the customers
problem.
SRM/M1/SS

3. Services is an activity or series of activities take place by
interaction between customer and service employees
It’s an economic activity which is consumed at a time it is
produced and provide added value in forms of Convenience,
amusement, timeliness , comfort or health
SRM/M1/SS

4. Services Defined…
“Activities, Benefits or Satisfactions
which are offered for sale
or
provided in connection with the sale of goods”
American Marketing Association
SRM/M1/SS

5. Services Defined…
“Separately identifiable, intangible activities which
provide want satisfaction
when marketed to consumers and/or industrial users
and which are not necessarily tied to the sale of a
product or another service”
William J. Stanton
SRM/M1/SS

6. Services Defined…
“Any activity or benefit that one party can offer to
another that is essentially intangible and does not
result in the ownership of anything.
Its production may or may not be tied to a physical
product”
Philip Kotler and Bloom
SRM/M1/SS

7. Why Services Marketing ???
Goods Vs. Services
• Goods are tangible • Services are intangible
• Goods are homogeneous • Services are heterogeneous
• Goods are produced in the • Services are produced in buyer-
factory seller interactions
• Production, distribution and • Production, distribution and
consumption are separate and consumption take place
independent functions in goods simultaneously in the case of
services
SRM/M1/SS

8. Goods Vs. Services
• Consumers do not generally • Consumers are co-
participate in the producers in services
production of goods
• Services can not be stored
• Goods can be stored
• In the sale of services,
• In sale of goods, transfer of transfer of ownership will
ownership takes place not take place
SRM/M1/SS

9. Characteristics of Services…
• Intangibility
• Inseparability
• Variability
• Perishability
• Customer participation
• No ownership
SRM/M1/SS

10. Perishability…
• Challenges : • Strategic Options :
- Storage of service is not - Demand management
possible - Capacity management
- Sales volume - Tactical approaches
continuously in relation - Continuous study on
to the capacity demand patterns and
- Time pressure in sales competitive parameters
SRM/M1/SS

11. Customer Participation…
• Challenges : • Strategic Options:
- Customers are not - Effective external marketing
controllable - Customer education and
- Production quality also training
depends upon customer’s - Effective interactive
knowledge and ability to marketing
participate - Management of
- Customers are evaluating at movements of truth
every stage of service - Effective internal marketing
production
SRM/M1/SS

12. No ownership…
• Challenges: • Strategic Options:
- Nothing remains after - Making communication
consumption tangible
- Very less time to the - Customer relationship
consumer to evaluate the marketing
product - Managing high level of
- High consumer dissonance company image
SRM/M1/SS

13. Classifications of Services in
Economy
 Value Added Services
Financing, Leasing, Insurance
 Infrastructure service
Communications, Transportation, Utilities, Banking
Manufacturing Services inside company
Finance, Accounting, Legal , R&D and design
 Distribution service
Wholesaling, Retailing, Repairing
SRM/M1/SS

14. Cont…..
 Personal Service
Health care, Restaurants, Hotels
 Business Service supporting Manufacturing
Consulting, Auditing, Advertising, Waste Disposal
 Governments Service
Military, Education, Judicial, Police and fire
protection
SRM/M1/SS

15. Service Classification :Service process Matrix
Degree of Interaction and Customization
LOW High
Degree of Labor intensity
Service Shop
Service factory •Hospitals
LOW •Airlines •Auto Repair
•Trucking
•Other repair services
•Hotels
•Resorts & Recreation
High Mass services Professional
•Retailing
•Wholesaling Services
•School •Physicians
•Retail aspect of •Lawyers
•Accountants
commercial Banking
•Architects
SRM/M1/SS

16. Dimensions of Service Quality

17. The Gaps Model

18. Six Service Quality Gaps

19.  Gap 1: The Knowledge Gap
 Gap 2: The Policy Gap
 Gap 3: The Delivery Gap
 Gap 4: The Communications
Gap
 Gap 5: The Perceptions Gap
 Gap 6: The Service Quality Gap
SRM/M1/SS

20. Suggestions for Closing the Six Service Quality Gaps

21. Suggestions for Closing the Six Service Quality Gaps

22. Suggestions for Closing the Six Service Quality Gaps

23. Suggestions for Closing the Six Service Quality Gaps

24. Measuring and Improving
Service Quality

25. Measures of Service Quality
Soft Measures Hard Measures
 Can be counted, timed, or
 Not easily observed, must be
measured through audits
collected by talking to customers,
employees or others  Typically operational
processes or outcomes
 Provide direction, guidance and
feedback to employees on ways to  Standards often set with
achieve customer satisfaction reference to percentage of
occasions on which a
 Can be quantified by measuring
particular measure is
customer perceptions and beliefs
achieved
 e.g., SERVQUAL, surveys, and
customer advisory panel

26. Customer Feedback Collection Tools

27. Hard Measures of
Service Quality

28. Hard Measures of Service Quality
• Service quality indexes
– Embrace key activities that have an impact on customers
• Control charts to monitor a single variable
– Offer a simple method of displaying performance over time against
specific quality standards
– Enable easy identification of trends
– Are only good if data on which they are based are accurate
• FedEx: One of the first service companies to understand the need
for an index of service quality that embraced all the key activities
that affect customers

29. Control Chart for Departure
Delays

30. Tools to Analyze and
Address Service Quality
Problems

31. Tools to Analyze and Address Service Quality Problems
• Fishbone diagram
– Cause-and-effect diagram to identify potential causes of
problems
• Pareto Chart
– Separating the trivial from the important. Often, a majority of
problems are caused by a minority of causes (i.e., the 80/20
rule)
• Blueprinting
– Visualization of service delivery, identifying points where
failures are most likely to occur

32. Cause-and-Effect Chart for Flight Departure Delays

33. Analysis of Causes of Flight Departure Delays

34. Blueprinting
• Depicts sequence of front-stage interactions experienced by
customers plus supporting backstage activities
• Used to identify potential fail points
– where failures are most likely to appear
• Shows how failures at one point can have a ripple effect
• Managers can identify points which need urgent attention
– Important first step in preventing service quality problems

35. Service Blueprinting
© Oxford University Press 2008.
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36. Return On Quality (ROQ)
• Assess costs and benefits of quality initiatives
– ROQ approach is based on four assumptions:
• - quality is an investment
• - quality efforts must be financially accountable
• - it’s possible to spend too much on quality
• - not all quality expenditures are equally valid
– Implication: Quality improvement efforts may benefit from being related to
productivity improvement programs
– To determine feasibility of new quality improvement efforts, determine costs and
then relate to anticipated customer response
• Determine optimal level of reliability
– Diminishing returns set in as improvements require higher investments
– Know when improving service reliability becomes uneconomical

37. When Does Improving Service Assumption: Customers are
Reliability Become Uneconomical? equally (or even more) satisfied
with the service recovery than
with a service that is delivered
as planned.
Satisfy Target
Satisfy Target
Customers Through
Customers Through
100%
Service Recovery
Service Recovery
Service Reliability
Optimal Point of
Optimal Point of
Reliability: Cost of
Reliability: Cost of
Failure = Service
Failure = Service
Recovery
Recovery
Satisfy Target
Satisfy Target
Customers Through
Customers Through
Service Delivery as
Service Delivery as
A B C D Planned
Planned
Small Cost, Investment
Large Cost,
Large Improvement Small Improvement

38. Productivity in a Service
Context
• Productivity: amount of output produced relative to amount of inputs
– Improvement in productivity means an improvement in the ratio of outputs to
inputs.
• Intangible nature of service makes it hard to measure productivity of
service firms, especially for information-based services
– Both input and output are hard to define
– Relatively simpler in possession-processing services, as compared to information-
and people-processing services

39. Service Efficiency, Productivity, and Effectiveness
• Efficiency: involves comparison to a standard, usually time-based (e.g.,
how long employee takes to perform specific task)
– Focus on inputs rather than outcomes and may ignore variations in service
quality/value
• Productivity: involves financial valuation of outputs to inputs
– Consistent delivery of outcomes desired by customers should command higher
prices
• Effectiveness: degree to which firm meets goals
– Cannot divorce productivity from quality and customer satisfaction

40. Stopwatch Time Study
• Standard time duration means the time taken by an
average worker to perform a task at a sustainable
rate under the given facility arrangements.
• A performance rating (P) is multiplied with the
observed time of the job to arrive at the normal time
(N) of the job.
• Standard time (S) is normal time plus allowances.
Allowances have to be made for time consumed in
adjusting or repairing the machines, workers drinking
water, or taking rest breaks.
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