introduction and techniques

1. Service Quality

2. Contents
 Introduction
 Literature review
 Five Dimensions of Quality Service
 Customer Satisfaction
 SERVQUAL model
 Service Recovery
 Conclusion

3. Introduction
 Consumers all over the world have become more quality conscious; therefore
customers‟ requirements for higher quality service have been increased (Lee,
2005).
 In spite of the criticality of service quality to businesses, measuring service quality
causes difficulties to service providers, as of the unique characteristics of
services: intangibility, heterogeneity, inseparability and perishability (Douglas &
Connor, 2003). In sight of this, services need a distinctive framework for quality
clarification and measurement. Among the major frameworks, SERVQUAL model
developed by Parasuraman et al. (1985; 1988) is most preferred and widely used
model for measuring service quality in the service industry.
 SERVQUAL was originally measured on 10 aspects of service quality: Reliability,
Responsiveness, Competence, Access, Courtesy, Communication, Credibility,
Security, Understanding the customer , Tangibles to measure the gap between
customer expectation and experiences.

4. Literature review – Service
• Some of basic definitions of service as defined by Management Gurus are :
1. “ A service is any activity or benefit that one party can offer to another which is essentially intangible and
does not result in the ownership of anything.” -- By Kotler, Armstrong, Saunders and Wong
2. “Services are economic activities that create value and provide benefits for customers at specific times
and places as a result of bringing about a desired change in or on behalf of the recipient of the service.” --
By Christopher Lovelock
3. “Services are the production of essentially intangible benefits and experience, either alone or as part of a
tangible product through some form of exchange, with the intention of satisfying the needs, wants and
desires of the consumers.” -- By C. Bhattachargee
• Our understanding:
1. “services are some intangible activities provided by the servers to fulfill the customers’ needs.”

5. Literature review – Quality
 Quality has been defined from diverse perspectives. Quality was primarily seen as a
defensive mechanism but it is seen as a competitive weapon for emergence of new
markets as well as growing market share (Davis et al., 2003).
 Quality can be defined as satisfying or exceeding customer requirements and
expectations, and consequently to some extent it is the customer who eventually
judges the quality of a product (Shen et al., 2000).

6. Literature review – Service quality
• Definition of service quality:
1. Service quality(SQ) is a comparison of expectations (E) with performance (P) SQ=P-E.
2. Customers form service expectations from past experiences, word of mouth and
advertisement. In general, Customers compare perceived service with expected service
in which if the former falls short of the latter the customers are disappointed.
• The importance of service quality:
1. A business with high service quality will meet customer needs whilst remaining
economically competitive. Improved service quality may increase economic
competitiveness.
 Reference: https://en.wikipedia.org/wiki/Service_quality

7. Five Dimensions of Service Quality
 In 1988 the 10 components of SERVQUAL model were collapsed into 5 dimensions (RATER). Reliability, tangibles
and responsiveness remained distinct, but the remaining 7 components collapsed into 2 aggregated dimensions:
assurance and empathy.
 Reference:http://www.revistas.usp.br/reeusp/article/viewFile/78084/82144

8. Five Dimensions of Service Quality
 1. Reliability: Perform promised service dependably and accurately.
Example: receive mail at same time each day.
 2. Responsiveness: Willingness to help customers promptly.
 Example: avoid keeping customers waiting for no apparent reason.
 3. Assurance: Ability to convey trust and confidence.
 Example: being polite and showing respect for customer.

9. Five Dimensions of Service Quality
 4. Empathy: Ability to be approachable.
 Example: being a good listener.
 5. Tangibles: Physical facilities and facilitating goods.
 Example: cleanliness.

10. Not All Dimensions Are Equal
 All dimensions are important to customers, but some more than others. Service
providers need to know which are which to avoid majoring in minors. At the same time
they can’t focus on only one dimension and let the others suffer.
 SERVQUAL research showed dimensions’ importance to each other by asking customers
to assign 100 points across all five dimensions. Here’s their importance to customers:
Source: Click here

11. Methodology – SERVQUAL model
• Survey
• Data analysis and implementation

12. 1. Survey
• 2 sections
 -customer expectation
 -customer perception
• 22 attributes corresponding to 5
dimensions
• Determination of Likert scale

13. 2. Data Analysis and Implementation
• Statistical data analysis
 Hypothesis test
 ANOVA

14. Perceived Service Quality
Word of
mouth
Personal
needs
Past
experience
Expected
service
Perceived
service
Service Quality
Dimensions
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Service Quality Assessment
1. Expectations exceeded
ES<PS (Quality surprise)
2. Expectations met
ES~PS (Satisfactory quality)
3. Expectations not met
ES>PS (Unacceptable quality)

15. Unconditional Service Guarantees
• Unconditional (L.L. Bean)
• Easy to understand and communicate (Bennigan’s)
• Meaningful (Domino’s Pizza)
• Easy to invoke (Cititravel)
• Easy to collect (Manpower)
Customers’ Views

16. Unconditional Service Guarantees
• Focuses on customers (British Airways)
• Sets clear standards (FedEx)
• Guarantees feedback (Manpower)
• Promotes an understanding of the service delivery system
(Bug Killer)
• Builds customer loyalty
Management’s Views

17. Customer Satisfaction
 All customers want to be satisfied.
 Customer loyalty is only due to the lack of a better
alternative
 Giving customers some extra value will delight them by
exceeding their expectations and insure their return

18. Expressing Dissatisfaction
Dissatisfaction
occurs
Action
No Action
Public Action
Private Action
Seek redress directly from
the firm
Take legal action
Complaint to business, private,
or governmental agencies
Stop buying the product or
boycott the seller
Warn friends about the product
and /or seller

19. Service Recovery
 Case-by-case addresses each customer’s complaint
individually but could lead to perception of unfairness.
 Systematic response uses a protocol to handle complaints but
needs prior identification of critical failure points and
continuous updating.
 Early intervention attempts to fix problem before the
customer is affected.
 Substitute service allows rival firm to provide service but
could lead to loss of customer.

20. SERVQUAL model
 The SERVQUAL service quality model was developed by a group of American
authors, 'Parasu' Parasuraman, Valarie Zeithaml and Len Berry, in 1988. It
highlights the main components of high quality service. The SERVQUAL model
comes as a facilitator to measure, evaluate and manage quality analysis of
services and has also been named as a method of analysis of the deficiencies
in service from the process to improve the service provided.
Professor A. Parasuraman Dr. Valarie Zeithaml Dr. Leonard L. Berry

21. SERVQUAL model
 The SERVQUAL model is dependent on three major bases:
1. The 5 gaps: there are 5 gap that create a void between the
customers’ expectations and the service delivered by the service
providers. Organizations should measure, manage and minimize
these 5 gaps for successfully marketing their service.
2. Causes and solution to gaps: Identifying the causes and
appropriate solutions are very crucial to minimize that void.
3. The key service dimensions: the aspects that should be
stressed upon so as to allow the service to be adopted by
targeted segments.
SERVQUAL as
management model
SERVQUAL as
measurement model

22. The Five Gaps
Source: Click here
Perceived
Service
Expected
Service
CUSTOMER
COMPANY
Customer
Gap
Gap 1
Gap 2
Gap 3
External
Communications
to CustomersGap 4
Service Delivery
Customer-Driven Service
Designs and Standards
Company Perceptions of
Consumer Expectations

23.  Customer gap:
◦ Difference between expectations and perceptions
 Provider gap 1:
◦ Not knowing what customers expect
 Provider gap 2:
◦ Not selecting the right service designs and standards
 Provider gap 3:
◦ Not delivering to service standards
 Provider gap 4:
◦ Not matching performance to promises

24. Causes and solution to gap 1
 Some of the examples:
 The internet service company:
was not offering USB dongle
internet
 The restaurant: was not offering
some drinks
 The bank: has limited online
payment services

25. Key factors leading to provider gap 1
• Inadequate marketing research orientation
 Insufficient marketing research
 Research not focused on service quality
 Inadequate use of market research
• Lack of upward communication
 Lack of interaction between management and customers
 Insufficient communication between contact employee and managers
 Too many layers between contact personnel and top management
• Insufficient relationship focus
 Lack of market segmentation
 Focus on transactions rather than relationships
 Focus on new customers rather than relationship customers
• Inadequate service recovery
 Lack of encouragement to listen to customer complaints
 Failure to make amends when things go wrong
 No appropriate recovery mechanisms in place for service failures

26. Closing gap 1: learn what customers
expect
• Use research, complaint analysis, customer panels
• Increase direct interactions between managers and customers
• Improve upward communications
• Act on information and insights
listen to
customers

27. Causes and solution to gap 2
 Some of the examples:
 The internet service company:
then started USB dongle but not
up to standard;
 The restaurant: started offering
the drink but not of high quality;
 The bank: started offering online
payment service but not of
excellent quality;

28. Key factors leading to provider gap 2
• Poor service design
 Unsystematic new service development process
 Vague, undefined service designs
 Failure to connect service design to service positioning
• Absence of customer-driven standards
 Lack of customer-driven service standards
 Absence of process management to focus on customer requirements
 Absence of formal process for setting service quality goals
• Inappropriate physical evidence and Servicescape
 Failure to develop tangibles in line with customer expectations
 Servicescape design that does not meet customer and employee needs
 Inadequate maintenance and updating of the Servicescape

29. Closing gap 2: Establish the right service
quality standards
• Top management commitment to providing service quality
• Set, communicate, and reinforce customer-oriented service standards
• Establish challenging and realistic service quality goals
• Train managers to be service quality leaders
• Be receptive to new ways to deliver service quality
• Standardise repetitive tasks
• Prioritise tasks
• Gain employee acceptance of goals and priorities
• Measure performance of service standards and provide regular feedback
• Reward managers and employees for achievement of quality goals Service Quality Awards

30. Causes and solution to gap 3
 Some of the examples:
 Internet service company: has no
user guide given by the customer
service officer;
 The restaurant: unavailability of
the desserts;
 The bank: service not on time;

31. Key factors leading to provider gap 3
• Deficiencies in HR policies
 Ineffective recruitment
 Role ambiguity and role conflict
 Poor employee-technology job fit
 Inappropriate evaluation and compensation systems
 Lack of empowerment, perceived control and teamwork
• Failure to match supply and demand
 Failure to smooth peaks and valleys of demand
 Inappropriate customer mix
 Over-reliance on price to smooth demand
• Customer not fulfilling rules
 Customers lack knowledge of their roles and responsibilities
 Customers negatively impact each other
• Problems with service intermediaries
 Channel conflict over objectives and performance
 Channel conflict over costs and rewards
 Difficulty controlling quality and consistency
 Tension between empowerment and control

32. Closing gap 3: Ensure that service
performance meets standards
• Attract the best employees
• Select the right employees
• Develop and support employees
 train employees
 provide appropriate technology & equipment
 encourage and build teamwork
 empower employees
 internal marketing
• Retain good employees
 measure and reward service quality achievements
 develop equitable and simple reward systems

33. Causes and solution to gap 4
 Some of the examples:
 The internet service company:
excellent services but not exactly
what it advertises
 The restaurant: it’s good to eat,
but not as much as the mouth
watering ad seems to be;
 The bank: delivered service is
good, but not exactly the same as
depicted in the ads;

34. Key factors leading to provider gap 4
• Lack of integrated services marketing communications
 Tendency to view each external communications as independent
 Not including interactive marketing in communications plan
 Absence of strong internal marketing program
• Ineffective management of customer expectations
 Not managing customer expectations through all forms of communication
 Not adequately educating customers
• Overpromising
 Overpromising in advertising
 Overpromising in personal selling
 Overpromising through physical evidence cues
• Inadequate horizontal communications
 Insufficient communication between sales and operations
 Insufficient communication between advertising and operations
 Differences in policies and procedures across branches or units

35. Closing gap 4: Ensure that service
delivery matches promises
• Seek input from operations personnel on what can be done
• ‘Reality’ advertising
 real employees, real customers, real situations
• Seek input from employees on advertising
• Gain communications between sales, operations and customers
• Internal marketing programs
• Ensure consistent standards in multi-site operations
• In advertising, focus on service characteristics that are important to customers
• Manage customer’s expectations
 What are realistic expectations?
 Explain industry realities
• Tiered service options
 Offer different levels of service - user pays

36. Brief Summary Gaps in Service Quality
Gap Problem Cause(s)
1. Consumer expectation
– mgmt. perception
The service features offered don’t
meet customer needs
Lack of marketing research; inadequate upward
communication; too many levels between contact
personnel and management
2. Management
perception – service
quality specification
The service specifications defined do
not meet management’s perceptions
of customer expectations
Resource constraints; management indifference; poor
service design
3. Service quality
specification – service
delivery
Specifications for service meet
customer needs but service delivery
is not consistent with those
specifications
Employee performance is not standardized; customer
perceptions are not uniform
4. Service delivery –
external communication
The service does not meet customer
expectations, which have been
influenced by external
communication
Marketing message is not consistent with actual service
offering; promising more than can be delivered

37. Advantages Vs Disadvantages of
SERVQUAL modelAdvantages Disadvantages
It can be used on a regular basis to track customer perceptions of
service quality of a particular firm compared to its competitors.
First of all Validity, the validity of the SERVQUAL model
as a generic instrument for measuring service quality
across different service sector has been raised.
It provides the opportunity for a firm to assess its service quality
performance on the basis of each dimension individually as well
as the overall dimensions
Secondly Gaps Model, there is little evidence that
customers access service quality in terms of
Perception (P) minus Expectation (E) gaps.
It allow the firm to classify its customers into different segments
based on their individual SERVQUAL scores
Process Orientation, SERVQUAL is process oriented it
focus on the process of service delivery, not on the
outcomes of the service encounter , while process and
outcome together is a better predictor of consumers
choice than process or outcome alone
SERVQUAL model can be used in various service setting/sectors
and provides a basic skeleton that can be adapted to fit the
specific attributes of a particular organization.
In the fourth place Dimensionality, SERVQUAL five
dimensions are not universal. Items do not always
load on to the factors which one would a priori
expect; and there is a high degree of inter correlation
between the five dimensions.
SERVQUAL gap analysis approach seems a logical and
straightforward concept and the questionnaire is also pre-
described and can be adapted as required
Finally Model Objections, SERVQUAL is based on an
expectation model rather than an attitudinal model
besides SERVQUAL fails to draw on establishing
economic and psychological theory (fail to draw on
the large literature on the psychology of perception).
SERVQUAL is a tried and tested instrument which can be used
comparatively for benchmarking purposes.

38. Ramifications of SERVQUAL model
 SERVPERF model
 LODGQUAL model
 LODGSERV model
 DINESERV model
 GROVQUAL model

39. Conclusion
 SERVQUAL has been used in many ways, such as identifying specific
service elements requiring improvement, and targeting training
opportunities for service staff.
 Proper development of items used in the SERVQUAL instrument provides
rich item-level information that leads to practical implications for a
service manager.
 The service quality dimensions evaluated by SERVQUAL should be
adjusted for optimal performance in different industry, public and private
sector applications.
 SERVQUAL scores are highly reliable, but when used in different industries
may fail to produce a clear delineation of the five basic dimensions.
Other measures, such as the Six Sigma model should be considered for
applicability in quantifying the gap between service expectations and
perceptions.

40. Q & A