Marketing of services

Marketing of Services
Services: A service is any act or performance, 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.

Customer Service: It is the service provided in support of a company’s core
products. It includes, answering questions, taking orders, handling complaints,
repairs etc. These are for building customer relationships and not the ones
provided for sale by a company.

Service Marketing Mix: The service marketing mix comprises off the 7’p’s.
These include:
• Product
• Price
• Place
• Promotion
• People
• Process
• Physical evidence.

People: An essential ingredient to any service provision is the use of appropriate
staff and people. Recruiting the right staff and training them appropriately in the
delivery of their service is essential if the organization wants to obtain a form of
competitive advantage. Consumers make judgments and deliver perceptions of
the service based on the employees they interact with.

Process: Refers to the systems used to assist the organization in delivering the
service.

Physical Evidence: It is the element of the service mix which allows the
consumer again to make judgments on the organization. If you walk into a
restaurant your expectations are of a clean, friendly environment. On an aircraft if
you travel first class you expect enough room to be able to lay down! Physical
evidence is an essential ingredient of the service mix, consumers will make
perceptions based on their sight of the service provision which will have an
impact on the organizations perceptual plan of the service.

Tangibility Spectrum: Essentially services are intangible but sometimes
they may involve the use of some tangible goods. In such cases the title of the
goods doesn’t change from the service provider to the customer. But again some
services do have a tangible component. There are four types of offer involving
goods and services

1. pure tangible goods
2. tangible goods with accompanying services
3. major services accompanying minor goods
4. a pure service

Salt
 Soft Drinks
 Detergents
 Automobiles
 Cosmetics
 Fast-food
Outlets
 Intangible
Dominant
Tangible
Dominant 
Fast-food 

Outlets Advertising
Agencies
Airlines 
Investment 
Management
Consulting 
Teaching

Characteristics of Services: The services have unique characteristics
which make them different from that of goods. The most common characteristics
of services are:
Intangibility.
Inseparability.
Perish ability.
Variability
Intangibility: Services are activities performed by the provider, unlike physical
products they cannot be seen, tasted, felt, heard or smelt before they are
consumed.
Inseparability: Services are typically produced and consumed simultaneously. it
cannot be separated from the service provider. Thus, the service provider would
become a part of a service. Inseparability of production and consumption
increases the importance of the quality in services.
Perish ability:

Services are deeds, performance or act whose consumption take place
simultaneously; they tend to perish in the absence of consumption. Hence,
services cannot be stored. The services go waste if they are not consumed
simultaneously i.e. value of service exists at the point when it is required.
Variability:
Services are highly variable, as they depend on the service provider, and where
and when they are provided. Service marketers face a problem in standardizing
their service, as it varies with experienced hand, customer, time and firm.

Service Process: A service is essentially a process and not a physical
product. The process is directed at different ends depending upon the nature of
service.
Some services process people and some may process objects. This leads to an
important classification on the basis of two important dimensions:

1. What is processed? Object or a Person

2. How is it processed? What is the Nature of Process? Tangible or
Intangible actions

People Processing : Here the customers must physically enter the system (like
Transportation) and they must be prepared to spend time actively cooperating
with the service operation. The level of involvement and output quality may vary.

Possession Processing: Here the service is more directed towards the goods
or other possession rather towards the customer. People are less physically
involved and usually there is no real need for them to enter the service for
example dry cleaning. The output in each instance should be a satisfactory
solution to a stated problem.

Mental Stimulus Processing: these Services interact with people’s mind like
education. Recipients should spend time but not necessarily be physically

present in a service factory; just mentally in communication with information
being presented.

Information Processing: Most intangible form of service output. The customer
involvement determined more by tradition or personal desire to meet face to face
and not by the needs of the operational process.

Classification Of Services
1. Nature of the organization : at the first level the purpose, structure and
type of the service is identified.
2. Nature of the service: the second level, addresses the nature of the
service in terms of degree of tradability and merchantability
3. Customer relationship : at the third level relationship is established it can
be formal or informal
4. Nature of demand : in terms of the fourth level, nature of demand, its
demand and supply, and demand trend is being analyzed
5. Service package: it addresses the group of services and goods offered by
a service firm
6. Delivery method : it deals with the delivery of the services

detail in page 14-15

Positioning of Services :
Services can be positioned in 6 different ways.
1. Service attributes: it involves positioning the services in terms of what it
does best. Example, Federal Express tries to position itself as the best
firm for overnight delivery
2. Use or application: fitness centers are often positioned in this way, some
cater to individuals who want to reduce weight, while others position
themselves who want to exercise for fitness
3. Price/quality relationship: Kingfisher Red has positioned itself as the low
price, no frills airline in the leisure travel market.
4. Service class: pizza hut is positioned as a dine in restaurant and not a fast
food restaurant
5. Service users: Business class of Jet Airways offers the highest level of
service quality to the business airline travelers
6. Competitors :

Service Encounter: A service encounter has been defined as a social
interaction involving one human being interacting with other. Given the high
degree of person-to-person interaction and, quite frequently the absence of an
exchange of tangible goods, the service encounter becomes a critical component
of service quality.
There are three key players involved in a service encounter that shape the
outcome of any encounter:
The service firm, which sets policies and guidelines;
The employees, who enact the policies of the firm;
and the customer, who seeks to satisfy a range of needs and wants.

Moment of truth occurs any time and every time the customer interacts with the
firm or the service provider. All encounters put together form a cascade. The
cascade can potentially be critical in determining customer satisfaction and
loyalty.

Self-Service Technologies: These are technological interfaces that enable customers
to produce a service independent of direct service employee involvement.
Advantages of SSTs
• SSTs can improve service quality perceptions, offer flexibility and customize
services to individual consumer needs
• Successful implementation of SSTs leads to operational cost reduction;
increasing customer satisfaction and loyalty; and reaching of new markets.
• SSTs allow staff to be relieved from routine duties and concentrate on aspects of
the service delivery where personal touch is more valuable.
Disadvantages of SSTs
• The limitations of SSTs from a service provider perspective are related to
investment expenses, and staff and consumer. If the service technology does not
gain adoption with consumers, the company may face increased expenses because
it needs to keep the operational staff, as well as pay for the new technology.
• SSTs also reduce the points of customer contact during the service delivery
process which leaves fewer chances for early detection of complaints and
opportunities for service recovery
• Even people who have favorable attitudes towards technology may avoid SSTs
because they can not replace the personal interaction.
• SSTs also require higher levels of consumer participation and responsibility, so
they are perceived as riskier than personal services

Purchase Model for Services: It has got three distinct phases:
Pre-Purchase Phase: It is when the purchase options are considered and decisions are
actually made. During, this phase consumers weigh the alternatives available to them and
the benefits to each alternative. The decision making process is influenced by four
different factors:
• Internal Factors: four internal factors impact a consumer’s decision during the
pre- purchase phase. These factors are individual needs and wants of consumers,
past experience, expectations and level of involvement.

• External Factors: Three external factors influence the purchase decision during
the pre purchase phase: the competitive options available to the consumer, the
social context of the purchase, and word of mouth communications.
• Firm Produced Factors: Promotions, Pricing and the distribution system are firm
produced factors that impact the purchase decisions.
• Perceived Risk: Risk has two components: 1. Uncertainty (probability that a
particular outcome or consequence will occur) 2. Consequences (the degree of
importance that a particular importance and danger of the outcome itself).

There are six types of perceived risk:

Functional - Will the product perform as I expect? If the customer is buying
sweet corn, this means, "Will this corn be as good as what I remember from last
year or what I had last week?" If the customer is buying petunias, the risk is, "Will
they make my garden look the way I want it to look?"

Physical - Can the product hurt me, my children or my pets? The use of
pesticides in the production of food crops is frequently the concern here, but
ornamentals that bear poisonous fruit can also be a concern.

Social - What will my peers think? If customers are buying sweet corn to eat in
the privacy of their home, the risk here is low. If they buy petunias and plant them
in the front yard and petunias are socially out this year, it's like having a big sign
in your yard for five months saying, "geek lives here".

Psychological - Am I doing the right thing? This can be a strong motivator in
plant sales for the environ-mentally concerned or an impossible obstacle for the
truly paranoid.

Financial - Can I afford the purchase? This is not a major problem for most
people buying sweet corn or petunias. It is a major obstacle for customers
consider-ing a specimen plant or flowering trees that may cost $60 to $100.

Time - How much time and effort may I expend to make this purchase? This may
be the greatest perceived risk for the plant and produce retailer to overcome.
Picture your potential customer in their car thinking, "Do I want to pull into that
crowded parking lot? Do I want to stand in that line for a dozen ears of corn?"
This is scary! Many of the stands I visit fail to overcome this perceived risk. Their
potential customers drive by.

Risk Reduction strategies

Performance risk: to reduce the uncertainty of performance risk, service firms
must increase the perceived probability the service will perform as consumers
desire. This can be done through communication, branding, and certification. To
reduce the consequences of performance risk, firms should ensure that the
service provider follow uniform quality control standards and procedures. By
doing this chances of service failure are reduced

Financial Risks: to reduce the uncertainty of financial risk, service firms should
offer trial purchases, sampling and promotional incentives, as it allows the
customers to evaluate the service provider with no financial risk. To reduce the
consequence of financial risk, service firms can offer money back guarantees.

Time loss and opportunity risk: uncertainty can be reduced by branding, the
presence of the brand name will reduce the perceived chances of poor service
performance, which in turn will reduce the perceived chances of time loss n the
part of the consumer. To reduce the consequences of time loss risk, service firms
can offer some kind of compensation in the case of service failure, and for
opportunity risk, the firm must ensure that there are quality control standards and
procedures in place and that these are followed by service personnel.

Psychological and social risk: uncertainty can be reduced by branding and
communication. Recognized brand names carry the assuarance to the customer
that the service will coincide with the consumers self image and will be well
recived by his or her social group. Whereas communication aimed at the
customer through advertising and interaction with service personnel can reduce
the uncertainty of psychological and social risk. Consequences can be reduced
by following strict quality control standards and procedures, thus reducing
variability of service

Physical risk: uncertainty is reduced by adhering to strict safety standards,
instructions and communications. Consequences are reduced by establishing
and following safety standards.

Service Encounter :

Post Purchase Phase: the third phase of the purchase process is the post
purchase phase. During this phase, customers make an evaluation of the service
quality they received and their overall level of satisfaction or dissatisfaction. For
satisfied customers post purchase actions include
• Repeat purchases
• Counter loyalty
• Positive word of mouth communication
For dissatisfied customers, these actions include:
• Switching vendors
• Negative word of mouth communication

Managing Customer Expectation
Pre Purchase Phase: Managing customer expectations during the pre purchase
phase consist of three steps:
1st learn what customer expects
2nd tell customers what they can expect

3rd consistently provide the service that customers expect

Service Recovery: three strategies can be used during the service encounter to
manage customer expectations
1st service personnel must communicate with the customer during the service
encounter
2nd if possible, service provider should modify service to meet the customers
expectations
3rd if the service cannot bee modified the service personnel must explain why the
customers expectations cannot be meet.

Post Purchase Phase: strategies that can be used after service has completed
1st companies should communicate with customers immediately after the service
has been completed
2nd firms can use follow up program
3rd develop a procedure for dealing with dis-satisfied customers.

Porter's Generic Competitive Strategies (ways of competing)

A firm's relative position within its industry determines whether a firm's
profitability is above or below the industry average. The fundamental basis of
above average profitability in the long run is sustainable competitive advantage.
There are two basic types of competitive advantage a firm can possess: low cost
or differentiation. The two basic types of competitive advantage combined with
the scope of activities for which a firm seeks to achieve them, lead to three
generic strategies for achieving above average performance in an industry: cost
leadership, differentiation, and focus. The focus strategy has two variants, cost
focus and differentiation focus.

1. Cost Leadership

In cost leadership, a firm sets out to become the low cost producer in its industry.
The sources of cost advantage are varied and depend on the structure of the
industry. They may include the pursuit of economies of scale, proprietary
technology, preferential access to raw materials and other factors. A low cost

producer must find and exploit all sources of cost advantage. if a firm can
achieve and sustain overall cost leadership, then it will be an above average
performer in its industry, provided it can command prices at or near the industry
average.

2. Differentiation

In a differentiation strategy a firm seeks to be unique in its industry along some
dimensions that are widely valued by buyers. It selects one or more attributes
that many buyers in an industry perceive as important, and uniquely positions
itself to meet those needs. It is rewarded for its uniqueness with a premium price.

3. Focus

The generic strategy of focus rests on the choice of a narrow competitive scope
within an industry. The focuser selects a segment or group of segments in the
industry and tailors its strategy to serving them to the exclusion of others.

The focus strategy has two variants.

(a) In cost focus a firm seeks a cost advantage in its target segment, while in

(b) differentiation focus a firm seeks differentiation in its target segment.

Both variants of the focus strategy rest on differences between a focuser's target
segment and other segments in the industry. The target segments must either
have buyers with unusual needs or else the production and delivery system that
best serves the target segment must differ from that of other industry segments.
Cost focus exploits differences in cost behavior in some segments, while
differentiation focus exploits the special needs of buyers in certain segments.

Service Recovery: The goal of service recovery is to identify customers with
issues and then to address those issues to the customers' satisfaction to promote
customer retention. However, service recovery doesn't just happen. It is a
systematic business process that must be designed properly and implemented in
an organization.

Service Recovery in an organization progresses through a series of stages,
shown in the nearby diagram.

Stage 1 Moribund. There is no complaint handling. Angry customers are
ignored. Letters to VPs and even the CEO about a damaged shipment go
unanswered.
Stage 2: Reactive. Customer complaints are heard, and a response is made.
But it's a haphazard process with no defined goals for the response and no one
owning this business process.
Stage 3: Active Listening. At this stage, the response to issues voiced by
customers is structured. Specific people have the responsibility to respond to

complaints and guidelines are in place for the response. However, it is still
reactive.
Stage 4. Solicitous. The critical change from Stage 3 to 4 is the move from
reactive to proactive solicitation of customers with issues. The reason this is so
important is that most customers don't bother to complain. They just move on to
other suppliers of products.
The solicitous role is accomplished by encouraging customer to voice their
complaints. Event surveys (also known as transactional or transaction-driven
survey) are a commonly used technique to get issues voiced.
Stage 5: Infused. The pinnacle of Service Recovery Practices is achieved when
the complaint identification merges with business process improvement or six
sigma programs to support root cause identification and resolution. The owners
of business processes that cause customer issues are notified of the
occurrences to prompt reexamination of the process design.

Steps to Service Recovery

Service recovery includes all the actions people take to get a disappointed
customer back to a state of satisfaction. There are six caring actions that
combine to make service recovery systematic, memorable, and satisfying.

1) Apologize The point is not to determine who's to blame. It's to solve the
problem. The first step to problem solving is to acknowledge the fact that – at
least in the customers' eyes—a problem exists. So start by having employees tell
them, personally and sincerely, "I'm sorry."

2) Listen and empathize: This is not the time to instruct customers in the finer
points of what they should have done to avoid the problem in the first place.
Customers resent being lectured to. What they mostly want customers service
reps people to do is just listen. Listening and empathizing helps customers
unwind, get it out of their systems, and feel they're talking to someone who really
cares about taking care of things.

3) "Fair fix" the problem. After listening (so they know exactly what's at issue),
employees people can work to resolve the problem. Usually, what customers
want now is what they wanted originally—and the sooner the better.

4) Offer atonement. A recovery system will earn high marks from customers if it
includes, even symbolically, some form of atonement that, in a manner
appropriate to the issue at hand, says, "I'd like to make it up to you. Of course,
the bigger the service breakdown—and the more valued the customer—the more
impressive the atonement will have to be to restore aggrieved customers to a
state of satisfaction.

5) Keep your promises: .Recovery time is double jeopardy "where the stakes
are doubled and the scores can really change." Your system has already failed
once. If employees make promises they can't keep in trying to get the business
back in the customer's good graces it will be throwing gas on the fire. Employees
need to know how to be realistic about what they can and can't deliver, and how
quickly.

6) Follow-up. In a few days, or a few weeks, employees should check back to
make sure things really did work out to the customer's satisfaction. That kind of
thoroughness and demonstrated concern builds loyalty that can weather future
storms—and helps set the organization apart from competitors.

Customer Expectations of Service: Pretrial beliefs a consumer has
about the performance of a service that are used as the standard or reference
against which service performance is judged. Consumer expectations consist of
5 levels:
1. Ideal Service level: Consumers wished for level of service
2. Desired Service level: level of performance customers want or hopr to
receive from a service
3. adequate level of service: minimum level of service a consumer will
tolerate and accept without being dissatisfied
4. predicted service level: level of service consumers actually expect from
service firm

Service Failure: these are instances when a service either is not performed
or is performed poorly. Service failure do not automatically result in firm switching
behaviour and negative word of mouth communications. Customers can often be
recovered. The manner in which post service failures are handled will have a
greater impact on future purchase behavior then the level of dis satisfaction of
the original service experience.

Customer Complaints and Types of Customers: The handling of
customer complaints is an important component of providing Superior Customer
Performance. Three important aspects of the complaint process are actively
seeking customer complaints, recognizing the type of customer that is
complaining, and responding appropriately based on the type of complainer.

Actively Seeking Customer Complaints: It is important to realize that
organizations that are totally customer-focused do not just respond effectively to
customer complaints; they actively seek them out. What specific activities does
the organization utilize to provide customers with easy opportunities to register
their dissatisfaction? Are these activities sufficient. Many dissatisfied customers
just quietly take their business elsewhere. Therefore, organizations that are truly
committed to delivering Superior Customer Performance work hard at providing
their customers opportunities to complain.

Types of Complainers and How to Respond Effectively
At least five types of complainers can be identified. Each type is motivated by
different beliefs, attitudes, and needs. Consider the following definitions of the
types of complainers.

• The Meek Customer/ Passive Customer : Generally, will not complain.
• The Aggressive Customer / Voicers : Opposite of the Meek Customer.
Readily complains, often loudly and at length.
• The High-Roller Customer. Expects the absolute best and is willing to pay
for it. Likely to complain in a reasonable manner, unless a hybrid of the
Aggressive Customer.
• The Rip-Off Customer. The goal is not to get the complaint satisfied but
rather to win by getting something the customer is not entitled to receive.
A constant and repetitive "not good enough" response to efforts to satisfy
this customer is a sure indicator of a rip-off artist.
• The Chronic Complainer Customer. Is never satisfied; there is always
something wrong. This customer's mission is to whine. Yet, he is your
customer, and as frustrating as this customer can be, he cannot be
dismissed.

Zone of Tolerance: The zone of tolerance is usually defined as the range of
customer perceptions of a service between desired and minimum acceptable
standards. In essence it is the range of service performance that a customer

considers satisfactory. Performance below the zone is seen as dissatisfying and
performance above the zone is seen as delighting.

The importance of this zone of tolerance is that customers may accept variation
within a range of performance, and any increase or decrease in performance
within this area will only have a marginal effect on perceptions. Only when
performance moves outside this range will it have any real effect on perceived
service quality. If a customer's zone of tolerance is narrow, then he or she may
be highly sensitive to the service experience, with a greater likelihood of
dissatisfying or delighting outcomes. Conversely, if a customer has a wide zone
of tolerance, then he or she may be much less sensitive to the service
experience, thus increasing the likelihood of a satisfactory or acceptable
outcome.

Service Blueprinting: A service blueprint describes a service in enough
detail to implement and maintain it carefully. Service blueprints need to describe
time in a service. This includes the sequence of events of a service experience,
its durations and timings. A blueprint should graphically and narriatively describe
this time element. It also describes the service process, the points of customer
contact, and the evidence of service from the customer’s point of view.

Components of Service Blueprints: There are five components of a typical
service blueprint

• Customer Actions,
• Onstage/Visible Contact Employee Actions,
• Backstage/Invisible Contact Employee Actions,
• Support Processes, and
• Physical Evidence.

Customer actions include all of the steps that customers take as part of the
service delivery process. What makes blueprinting different from other
flowcharting approaches is that the actions of the customer are central to
the creation of the blueprint, and as such they are typically laid out first so that all
other activities can be seen as supporting the value proposition offered to or co-
created with the customer.

Onstage/visible contact employee actions : separated from the customer by the
line of interaction. Those actions of frontline contact employees that occur as part
of a face-to-face encounter are depicted as onstage contact employee actions.
Every time the line of interaction is crossed via a link from the customer to a
contact employee (or company self-service technology, etc.), a moment of truth
has occurred.

Backstage/invisible contact employee actions: separated from the onstage
actions by the very important line of visibility. Everything that appears above the
line of visibility is seen by the customer, while everything below it is invisible.
Below the line of visibility, all of the other contact employee actions are
described, both those that involve non- visible interaction with customers (e.g.,

telephone calls) as well as any other activities that contact employees do in order
to prepare to serve customers or that are part of their role responsibilities.

Support processes separated from contact employees by the internal line of
interaction. These are all of the activities carried out by individuals and units
within the company who are not contact employees but that need to happen in
order for the service to be delivered. Vertical lines from the support area
connecting with other areas of the blueprint show the inter-functional connections
and support that are essential to delivering the service to the final customer.

Finally, for each customer action, and every moment of truth, the physical
evidence that customers come in contact with is described at the very top of the
blueprint. These are all the tangibles that customers are exposed to that can
influence their quality perceptions.

Servicescape : The concept of a servicescape was developed by Booms and
Bitner to emphasize the impact of the physical environment in which a service
process takes place. Booms and Bitner defined a servicescape as:

"The environment in which the service is assembled and in which the seller and
customer interact, combined with tangible commodities that facilitate
performance or communication of the service"

It can be classified in two dimensions:
I Servicescape usage
u Complexity of the servicescapes

I. The usage takes into account as to how organizations differs in terms of who
the servicescape will actually have an effect on when they come in contact with
the service facility-customers, employees, or both groups which gives rise to
three situations:

• Self-service (customers only)

• Interpersonal services (both, customer and employee)

• Remote services (employee only)

• Remoteservices (employee only)

2. The complexity of the servicescape has two environments:

• Lean (simple, few elements, few spaces, and few pieces of equipments)

• Elaborate (very complicated, many elements, and many forms)

For lean servicescapes, design decisions are relatively straightforward,
especially in self-service or remote service situations in which there is no
interaction among employees and customers.
For elaborate servicescapes, the full range of marketing and organizational
objectives can be approached through careful management of the servicescape.

Roles of Servicescape:
1. Package: wrap the service and convey an external image. It extends to the
appearance of contact personnel through their uniforms or dress and their
elements of their outward appearances.

2. Facilitator: Aiding the performances of persons in the environment. Make
service a pleasure to experience from the customer’s point of view and a
pleasure to perform from the employee’s.

3. Socializing: Aid in socializing of both employees and customers by conveying
the expected roles, behaviors, and relationships through office assignments,
quality of furnishings and location in organization.

4. Differentiator: Exclusive positioning as differentiated from its competitors and
signal the market segment the service it intends to provide. Use of colors, music,
sprice differentiation through variation of physical luxurious settings and sittings.s

The Services Marketing Triangle: The Services Marketing Triangle
model focuses upon making and keeping promises to customers and suggest
three structural relationships as the mode by which this occurs.
Company
Management

Internal Marketing External Marketing
“Enabling the promise” “setting the promise”
service environment the service product

Employees Customers

Interactive Marketing

“Delivering the promise” service delivery

The model is applied to the example of a typical university registry.

The Model University/Registry

Company Management Directorate
Registry managers/management team

Employees All registry staff

Customers Students
University staff
External bodies

External Marketing Consultation with Customers to identify needs
“Setting the promise” and obtain feedback on performance:
the service product • Course Organisers Forum
• Student Union Liaison meetings
• Student Services Committee
• Undergraduate Student Questionnaire
• Enrolment review

Service Statements/Plans:
• Service Provision Statement
• Departmental Plan

Internal Marketing Culture & philosophy
“Enabling the promise” Staff recruitment
the service environment Staff development/training
Motivation and involvement in planning
Team meetings/briefings
Technical resources

Interactive Marketing The serviscape and service encounter:
“Delivering the promise” Delivery of service
service delivery Physical environment
Meetings
Telephone

Customer Satisfaction and Service Quality

Satisfaction: It is a customers feeling of pleasure and disappointment that result
from comparing a products perceived performance to their expectations.

• If performance < expectations = Dissatisfied
• If performance = expectations = Satisfied
• If performance > expectations = Highly delighted

Quality: Service quality is an assessment of the quality dimensions made by the
service consumer during service consumption over time, spanning multiple
transactions and interactions with the service provider and its services. Service
quality is based on expectations across the five dimensions of a service.

Service quality for a service and satisfaction for any service encounter arises
from perceptions made by users around one or more of the following five
dimensions also known as the Service Quality Dimension:

1. Tangibles: Appearance of physical facilities, equipment, personnel, and
communication materials.
2. Reliability: Ability to perform the promised service dependably and
accurately.
3. Responsiveness: Willingness to help customers and provide prompt
service.
4. Assurance: Knowledge and courtesy of employees and their ability to
convey trust and confidence.
5. Empathy: Caring, individualized attention the firm provides its customers.

Quality and satisfaction are different things altogether, yet many confuse these
basic concepts; contributing to the ever-widening gap between business and IT.

The difference between these concepts is that one may be satisfied and still feel
that service quality is low. Vice versa, one may be dissatisfied and feel that
service is of high quality. Service quality is a complex judgment about the overall
superiority of a service whereas satisfaction is related to contentment regarding a
specific transaction.

Customer Gap/ Service Delivery Gap

Five areas of GAP that causes unsuccessful delivery of service are:

1. GAP 1: Gap between consumer expectation and management
perception: management does not always perceive what customer want.
Hospital administrators may think patients want better food, but patients
may be more concerned with nurse responsiveness
2. GAP 2: Gap between management perception and service quality
specification: management might correctly perceive customers wants but
not set a performance standard. Hospital administrators may tell the
nurses to give fast service without specifying it in minutes
3. GAP 3: Gap between service quality specifications and service delivery:
personnel might be poorly trained, or incapable of or unwilling to meet the
standard; or they may be held to conflicting standards, such as taking
time to listen to consumers and serving them fast.
4. GAP 4: Gap between service delivery and external communications;
consumer expectations are affected by statements made by company
representatives and ads. If a hospital brochure shows a beautiful room,
but in reality the room is cheap and tacky looking, external
communication has distorted the customer’s expectations.
5. GAP 5: Gap between perceived service and expected service: this gap
occurs when the consumer misperceives the service quality. The
physician may keep visiting the patient to show care, but the patient may
interpret this as an indication that something really is wrong.

Strategies for reducing Customer GAP

Reducing GAP 1: service firms has four strategies available to them to reduce
the size of GAP 1. These strategies are : communicating with the customers,
conducting marketing research, encouraging upward communication in he
organization, and decreasing the layers of management.

Reducing GAP 2:
1. service firms must have the commitment of top management,
2. setting service quality goals, these goals must be set with the customer,
the service contact provider and management in mind.
3. Task standardization also reduces the GAP, this can be achieved through
hard technology( substituting machines or computers for people) or soft
technology ( improving work methods)

Reducing GAP 3:
1. Ensuring teamwork among the employees
2. Ensure there is good technology job fit
3. Developing a supervisory control system that reward employees for
providing service according to the specifications.

Reducing GAP 4:
1. Increase horizontal communications between the marketing department
and service personnel
2. Avoid the propensity to over promise to obtain a sale
3. Inform service personnel of promises made by salespeople and marketing
communications

Reducing GAP 5: ROQ analysis page no 103

Customer Service Guarantee

A customer service guarantee is a set of two promises:
• a commitment by a company to its customers to make good on a
promised level of service
• and a commitment to compensate its customers when the first promise is
not met.

Successful companies promote their service guarantees to everybody. The
classic service guarantee example is Fed-Ex: “If you want your package
absolutely, positively to be at someone's doorstep the next day, then Fed-Ex it!”
The company even guarantees a specific time for their overnight deliveries to
reach the customers, or the delivery is free.

5 Key Success Factors

Your customer service guarantees must contain the following five key success
factors:

1. Must be unconditional : A good service guarantee has no conditions. They
are for every customer, first-time or long-standing. If you cannot guarantee
all elements of a specific service unconditionally, don't bother developing
one.
2. Must be specific and easy to understand : A good service guarantee is
written in simple, concise language that pinpoints the promise.
3. Must be meaningful: A good service guarantee process is meaningful in
two respects. It guarantees those aspects of your service that are most
important to your customers, and it has financial significance to your
customers by providing a payout when a service promise is not kept.
4. Don't over-promise: It's important to offer customer service guarantees
within your capacity to deliver. If you can't consistently meet your service
guarantee, it will advertise to your customers that you have a service
weakness.
5. Provide employee service guarantee training: Before introducing your
service guarantees to your customers, you must first provide thorough
customer service guarantee training to all your employees. Every
employee should be encouraged and empowered to administer customer
service guarantees.

Marketing of services

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