1. The document discusses customer perception of service quality and satisfaction. It defines customer satisfaction as a consumer's fulfillment response that is influenced by expectations, product/service attributes, emotions, fairness perceptions and other people. Service quality focuses on five dimensions: reliability, assurance, tangibles, empathy and responsiveness. 2. It describes different types of customer encounters: remote (e.g. websites), phone and face-to-face. Encounters shape customer perceptions and satisfaction levels based on factors like employee behavior, problem resolution and flexibility. Service quality aims to positively influence encounters.

1. Customer
Perception of
Service
Objectives:
1. Demonstrate the importance of Customer satisfaction-what
it is, the factors that influence it, and the significant
outcomes resulting from it.
2. Develop critical knowledge of service quality and its five key
dimensions.

2. Image by: https://gettalkative.com/
As we move through this chapter, keep in mind that
perceptions are always considered relative to
expectations. Because expectations are dynamic,
evaluations may also shift over time-from person to
person and from culture to culture. What is considered
quality service or the things that satisfy customers
today may be different tomorrow. Also keep in mind that
the entire discussion of quality and satisfaction is based
on customer’s perception of the service- not some
predetermined objective criteria of what service is or
should be.
Customer Perception Quality and Satisfaction Source: Parasuraman et al. (1988)
SATISFACTION vs SERVICE QUALITY
The two concepts are fundamentally
different in terms of their underlying causes
and outcomes. Although they have certain
things in common, satisfaction is generally
viewed as a broader concept, whereas service
quality focuses specifically on dimensions of
service.
As shown in the figure above (Customer Perception Quality and
Satisfaction Source: Parasuraman et al. (1988), service quality is a focused
evaluation that reflects the customer’s perception of reliability, assurance,
responsiveness, empathy, and tangibles. Satisfaction, on the other hand, is
more inclusive; it is influenced by perceptions of service quality, product
quality, and price, as well as situational factors and personal factors.
CUSTOMER
PERCEPTIONS

3. TRANSACTION vs CUMULATIVE PERCEPTIONS
Research suggests that it is important to understand all these types of
perceptions for different reasons and that the viewpoints are
complementary rather than competing. Understanding perceptions at
the transaction-specific level is a critical for diagnosing service issues
and making immediate changes. These isolated encounters are also
the building blocks for overall, cumulative experience. On the other
hand, cumulative experience evaluations are likely to be better
predictors of overall loyalty to a company. That is, customer loyalty,
most often results from the customer’s assessment of all is
experiences, not just one single encounter.
“Everyone knows what
satisfaction is, until asked to
give a definition. Then it seems
nobody knows.”
This quote from Richard
Oliver, respected expert and
long-time writer and
researcher on the topic of
customer satisfaction,
expresses the challenge of
defining this most basic of
customer concepts.
Satisfaction is the consumer’s fulfillment response. It is a
judgement that a product or service feature of the product or
service itself, provides a pleasurable level of consumption-related
fulfillment.
In less technical terms, we interpret this definition to mean that
satisfaction is the customer’s evaluation of a product or service in
terms of whether that product or service has met the customer’s
need or expectations. Failure to meet needs and expectations is
assumed to result in dissatisfaction with the product or service.

4. As shown in the figure above, customer
satisfaction is influenced by specific product or service
features, perceptions or products and service quality,
and price. In addition, personal factors such as the
customer’s mood or emotional state and situational
factors such as family member opinions will also
influence satisfaction.
1. PRODUCT AND SERVICE FEATURES.
Customers satisfaction with a product or service is influenced
significantly by the customer’s evaluation of product or service
features.
2. CONSUMER EMOTIONS.
Customer’s emotions can also affect their perceptions of
satisfaction with products and services. Positive emotions such
as happiness, pleasure, elation, and a sense of warm-
heartedness enhances customer satisfaction. While Negative
emotions including anger, depression, guilt and humiliation
had a strong effect on customers’ dissatisfaction ratings.
3. ATTRIBUTIONS FOR SERVICE SUCCESS OR FAILURE.
Attributions- the perceived causes of events- influence
perceptions of satisfaction as well.
4. PERCEPTION OF EQUITY OR FAIRNESS
Customer satisfaction is also influenced by perceptions of
equity and fairness. Notions of fairness are central to
customer’s perceptions of satisfaction with products or
services, particularly in service recovery situations.
5. OTHER CONSUMERS, FAMILY MEMBERS, AND CO-
WORKERS
In addition to product and service features and one’s own
individual feelings and beliefs, consumer satisfaction is often
influenced by other people

5. 1. What is customer satisfaction, and
why is it so important?
2. Discuss how customer satisfaction
can be influenced by each of the
following:
• Product attributes and features
• Customer emotions
• Attributes for success or failure
• Perceptions of fairness
• Family members or other
customers

6. SERVICE QUALITY
(SERVQUAL)
a critical element of
customer perceptions.
In the case of pure services (e.g., health care, financial
services, education), service quality will be dominant element in
customers’ evaluations. In cases in which customer service or
services are offered in combination with a physical product (e.g.,
IT services, auto services), service quality may also be critical in
determining customer satisfaction.
OUTCOME, INTERACTION, AND PHYSICAL
ENVIRONMENT QUALITY
Interaction quality would include such factors as timeliness
in returning phone calls, empathy for the client and his/her
courtesy and listening skills.
Technical Outcome Quality
(Ex: A restaurant customer will judge the service on her
perceptions of the meal.)
Interaction Quality
(Ex: On how the meal was served and how the employees
interacted with her.)
Physical Environment Quality
(Ex: The decor and surroundings of an office or restaurant will
also affect the customer’s perceptions of overall service quality.)
SERVICE
QUALITY
(SERVQUAL)

7. SERVICE
QUALITY
DIMENSIONS
Image by: www.marketing91.com
1. Reliability: ability to perform the promised service
dependably and accurately.
2. Assurance: employees’ knowledge and courtesy and their
ability to inspire trust and confidence.
3. Tangibles: appearance of physical facilities, equipment,
personnel, and written materials.
4. Empathy: caring, individualized attention given to
customers.
5. Responsiveness: willingness to help customers and provide
prompt service.

8.  Reliability: Delivering on Promises
Of the five dimensions, reliability has been consistently shown to be
the most important determinant of perceptions of service quality.
Reliability is defined as the ability to perform promised service
dependably and accurately. In it’s broadest sense, reliability means
that the company delivers on its promises-promises about delivery,
service provision, problem resolution, and pricing. Customers want
to do business with companies that keep their promises, particularly
their promises about the service outcomes and core service
attributes.
 Responsiveness: Being Willing to Help
Responsiveness is the willingness to help customers and to provide
prompt service. This dimension emphasizes attentiveness and
promptness in dealing with customer requests, questions,
complaints and problems. Responsiveness is communicated to
customers by the length of time they have to wait for assistance,
answers to questions, or attention to problems.
To excel on the dimension of responsiveness, a company must
view the process of service delivery and the handling of requests
from the customer’s point of view rather than from the company’s
point of view. Standards for speed and promptness that reflect the
company’s view of internal process requirements may be very
different from the customer’s requirements for speed and
promptness. To truly distinguish themselves on responsiveness,
companies need well-staffed customer service departments as well
as responsive frontline people in all contact positions.
 Assurance: Inspiring Trust and Confidence
Assurance its employees to inspire and customer trust and confidence.
This dimension defined as employees’ knowledge and courtesy and the
ability of the firms and n is likely to be particularly important for services
that customers perceive as high risk or for services of which they feel
uncertain about their ability to evaluate outcomes -for example, banking,
insurance, brokage, medical, and legal services.
 Empathy: Treating Customers as Individuals
Empathy is defined as the caring, individualized attention that the firm
provides its customers. The essence of empathy is conveying through
personalized or customized service, that customers are unique and
special and that their needs are understood. Customers want to feel
understood by and important to firms that provide service to them.
 Tangibles: Representing the Service Physically
Tangibles are defined as the appearance of physical facilities, equipment,
personnel, and communication materials. Tangibles provide physical
representations or images of the service that customers, particularly new
customers, will use to evaluate quality. Service Industries that emphasize
tangibles in their strategies include services in which the customer visits
the establishment to receive the service, such as restaurants and hotels,
retail stores and entertainment companies.
Although tangibles are often used by service companies to enhance their
image, provide continuity, and signal quality to customers, most
companies combine tangibles with another dimension to create a service
quality strategy for the firm

9. SERVICE ENCOUNTERS:
THE BUILDING BLOCKS
FOR CUSTOMER
PERCEPTIONS
We have just finished a discussion of customer perceptions,
specifically customer satisfaction and service quality. Next, we
turn to what have been termed the building blocks for customer
perceptions-service encounters, or “moment of truth.” Service
encounters are where promises are kept or broken and where
proverbial rubber meets the road- sometimes called “real-time
marketing.” It is from these service encounters that customers
build perceptions.
SERVICE ENCOUNTERS OR MOMENT OF TRUTH
From the customers point of view, the most vivid impression of
service occurs in the service encounters or moment of truth,
when the customer interacts with the service firm.

10. TYPES OF SERVICE
ENCOUNTERS
SERVICE ENCOUNTER occurs
every time a customer interacts with
the service organization.
There are three general types of
service types of service encounters:
• remote encounters,
• phone encounters and
• face-to-face encounters.
1. REMOTE ENCOUNTERS- encounters can occur without any
direct human contact. In remote encounters the tangible
evidence of the service and the quality of the technical
processes and systems become the primary bases for the
judging quality.
Example:
• As when a customer interacts with a bank through the
ATM system.
• With a retailer thought its internet website (Lazada,
Shoppe, other Online shops)
• Firm send its billing statements or communicates with
other types of information to customers by mail.
2. PHONE ENCOUNTERS- the most frequent type of
encounter between an end customer and the firms occurs
over the telephone. Tone of voice, employee knowledge, and
effectiveness/efficiency in handling customer issues become
important criteria for judging quality in these encounters.
Example:
• Insurance companies, utilities and telecommunications
• Whether goods manufacturers or service businesses rely
on telephone encounters to some extent for customer
service, general inquiry, or order-taking functions.

11. 3. FACE-TO-FACE ENCOUNTERS- this type of encounter is the
one occurs between an employee and a customer in direct
contact. Both verbal and non-verbal behaviors are important
determinants of the quality, as are tangible cues such as
employee dress and other symbols of service (equipment,
informational brochures, physical settings). In face-to-face
encounters the customer also plays a role in creating quality
service for herself through quality service for herself through
her own behavior during the interaction.
Example:
• At Clinics/Hospitals face-to-face encounters occurs between
patients and reception staff, nurses, doctors, lab technicians,
food service workers, pharmacy staff, and others.
Sources of Pleasure and
Displeasure in Service
Encounters
1. Recovery- Employee Response to Service Delivery System Failure
2. Adaptability- Employee Response to Customer Needs and Request
3. Spontaneity- Unprompted and Unsolicited Employee Actions
4. Coping- Employee Response to Problem Customers

12. People
Physical
Evidence
Process
Theme Do Don’t
Recovery
Acknowledge Problem
Explain Causes
Apologize
Compensate./Upgrade
Lay out options
Take responsibility
Ignore customer
Blame customer
Leave customer to fend for
himself or herself
Downgrade
Act as if nothing is wrong
“Pass the buck”
Adaptability
Recognize the seriousness
of the need
Acknowledge
Anticipate
Attempt to accommodate
Adjust the system
Explain rules/policies
Take responsibly
Ignore
Promise, but fail to follow
through
Show unwillingness to try
Embarrass the customer
Laugh at the customer
Avoid responsibility
“Pass the buck”
Spontaneity
Take time
Be attentive
Anticipate needs
Listen
Provide information
Show empathy
Exhibit impatience
Ignore
Yell/laugh/swear
Steal from Customers
Discriminate
Coping
Listen
Try to accommodate
Explain
Let go of the customer
Take customer’s
dissatisfaction personally
Let the customer’s
dissatisfaction affect
others.
GENERAL SERVICE BEHAVIORS BASED ON SERVICE
ENCOUNTER THEMES
(DOS AND DON’TS)
• Operational flow
of activities.
• Steps in process
• Flexibility versus
standard
• Technology
versus human
• Tangible
communication
• Servicescape
• Guarantees
• Technology
• Website
• Contact employees
• Customer him/herself
• Other customers
The Evidence of Service
(From Customers Point of View
Source: Managing the Evidence of
Service” by M.J Bitner from the
Service Quality Handbook, ed. E.
E. Scheuing and W.F.
Christopher, 1993.: Reprinted by
the permission of the American
Marketing Association.

13. 1. Discuss the differences between perception of
service quality and customer satisfaction.
1. Describe a remote encounter, a phone
encounter, and a face-to-face encounter that
you have had in the past/recently. How did you
evaluate the encounter, and what were the
most important factors determining your
satisfaction/dissatisfaction in each case?