Quality of Service in Marketing MOUZHI GE PV240 INTRODUCTION TO SERVICE MARKETING q Evaluation for marketing purpose q Understand the importance of QoS q Position service quality in information systems q Describe the five dimensions of service quality q Understand the gap model in QoS q Perform SERVQUAL deployment q Able to plan for service recovery q Perform a walk-through in SERVQUAL and RATER Learning Objectives Evaluation Position Measurement Model Summary Marketing focus shifting Motivation in Marketing q Superior product/service quality relative to competitors is the most important factor affecting profitability (Profit Impact of Market Strategy - PIMS study) q Premium prices q Customer preference q Customer retention q Market expansion/market share q Other benefits: productivity, advertising, distribution/access Concept to clarify: Quality q “although we cannot define quality, we know what quality is” (Pirsig, 1987) q “quality is fitness for use, the extent to which the product successfully serves the purpose of the user during usage” (Juran, 1974) q “quality is zero defects - doing it right the first time”, Parasuraman, Zeithaml and Berry, 1985) q “quality is exceeding what customers expect from the service”, Zeithaml, Parasuraman and Berry, 1990) Quality in practice q Conformance quality ◦producing the product/service according to specification every time, with no correction required q Quality-in-use ◦ customer judgements about quality received and resultant level of customer satisfaction q Technological quality ◦superior performance features of product/service derived from advanced new technologies Service Quality – early definitions q "service quality results from a comparison of what customers feel a service provider should offer (i.e. their expectations) with the provider’s actual performance" (Parasuraman, 1996: 145) q "Service quality is a measure of how well the service level delivered matches customer expectations. Delivering quality service means conforming to customer expectations on a consistent basis" Lewis and Booms (1983) Service Quality - shifting focus q In the past, industry focused particularly on defining and meeting internal quality or technical standards q Today the focus has shifted to quantifying customers’ assessments of services and products (external measurement) and then translating these into specific internal standards q Delivering quality service is fundamental to corporate success because research shows it is closely linked to profits QoS in Information Systems •Delone and Mclean, Information Systems Success Theory Service Quality – profits q Increase profits, particularly to: q fewer customer defections q stronger customer loyalty q more cross-selling of products and services q Improving service quality cuts costs q fewer customers to replace q less corrective work to do q fewer inquiries and complaints to handle q lower staff turnover and dissatisfaction Enhancing service value Concept to clarify: Evaluation q There are two types of evaluations q (1) Get a concrete score, like your exam q (2) Comparision q We mainly focus on (2) Comparision today q Comparision in real life Service Quality or Quality of Service How good your service is? When there is certain service, how good this service is? Scope of Service Quality q View quality from five perspectives • Content – are standard procedures being followed? • Process – is the sequence of events in the service process appropriate? • Structure – are the physical facilities and organizational design adequate for the service? • Outcome – what change in the status has the service effected? Is the consumer satisfied? • Impact – what is the long-range effect of the service on the consumer? Service Quality Example Hotel example q Supporting facility ◦Design of the building q Facilitating goods ◦Room furnishings like: bedside tables, carpet cleaning q Explicit services ◦Maids are trained to clean and make up rooms q Implicit services ◦Pleasant appearances of individuals at front office Evaluation of Service Quality Metircs/Criteria/Dimensions SERVQUAL SERVQUAL: The Five Key Service Dimensions Dimension No. of Items in Questionnaire Definition Reliability 5 The ability to perform the promised service dependably and accurately Assurance 5 The knowledge and courtesy of employees and their ability to convey trust and confidence Tangibles 4 The appearance of physical facilities, equipment, personnel and communication materials Empathy 5 The provision of caring, individualized attention to customer Responsiveness 4 The willingness to help customers and to provide prompt service q Reliability: •Perform promised service dependably and accurately. •Example: receive mail at same time each day. q q Responsiveness: •Willingness to help customers promptly. •Example: avoid keeping customers waiting for no apparent reason. •Quick recovery, if service failure occurs Dimensions of Service Quality (1) q Assurance: •Ability to convey trust and confidence. •Give a feeling that customers’ best interest is in your heart •Example: being polite and showing respect for customer. q Empathy: •Ability to be approachable, caring, understanding and relating with customer needs. •Example: being a good listener. q Tangibles: •Physical facilities and facilitating goods. •Example: cleanliness. Dimensions of Service Quality (2) §Providing service as promised §Dependability in handling customers’ service problems §Performing services right the first time §Providing services at the promised time §Maintaining error-free records §Keeping customers informed as to when services will be performed §Prompt service to customers §Willingness to help customers §Readiness to respond to customers’ requests RELIABILITY RESPONSIVENESS §Employees who instill confidence in customers §Making customers feel safe in their transactions §Employees who are consistently courteous §Employees who have the knowledge to answer customer questions ASSURANCE §Giving customers individual attention §Employees who deal with customers in a caring fashion §Having the customer’s best interest at heart §Employees who understand the needs of their customers §Convenient business hours EMPATHY §Modern equipment §Visually appealing facilities §Employees who have a neat, professional appearance §Visually appealing materials associated with the service TANGIBLES SERVQUAL Attributes 4-23 24 SERVQUAL Example in University Gap Model in Service Quality Concept to clarify: Expectation q Expectations can be formulated in terms of “what should be done” and “what will be done” Concept to clarify: Perception q “perception is defined as the process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world” (Schiffman and Kanuk, 1987) q subjective and selective q resulting attitudes about a particular service provider may change over time (long-term attitudes may be more stable than immediate attitudes) •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 • ESPS (Unacceptable quality) • Gap Model of Service Quality Word-of-mouth Communications Personal Needs Past experience Expected Service Perceived Service Service Delivery External Communications To Customers Service Quality Specs Management Perceptions of Customer Expectations CUSTOMER PROVIDER Gap 1 Gap 2 Gap 3 Gap 4 Gap 5 What are the SERVQUAL Gaps? Gap 1: The difference between management perceptions of what customers expect and what customers really do expect Gap 2: The difference between management perceptions and service quality specifications - the standards gap What are the SERVQUAL Gaps? Gap 3: The difference between service quality specifications and actual service delivery - are standards consistently met? Gap 4: The difference between service delivery and what is communicated externally - are promises made consistently fulfilled? What are the SERVQUAL Gaps? Gap 5: The difference between what customers expect of a service and what they actually receive ◦expectations are made up of past experience, word-of-mouth and needs/wants of customers ◦measurement is on the basis of two sets of statements in groups according to the five key service dimensions ØGap1: Market research gap üManagement may not understand how customers formulate their expectations from past experience, advertising, communication with friends vImprove market research vFoster better communication between employees and its frontline employees vReduce the number of levels of management that distance the customer Ø ØGap 2: Design gap üManagement unable to formulate target level of service to meet customer expectations and translate them to specifications vSetting goals and standardizing service delivery tasks can close the gap Problems with Gaps in Service Quality ØGap 3: Conformance gap üActual delivery of service cannot meet the specifications set by management vLack of teamwork vPoor employee selection vInadequate training vInappropriate job design Ø ØGap 4: Communication gap üDiscrepancy between service delivery and external communication vExaggerated promises in advertising vLack of information provided to contact personnel to give customers ◦ Problems with Gaps in Service Quality ØGap 5: Customer expectations and perceptions gap üCustomer satisfaction depends on minimizing the four gaps that are associated with service delivery Ø Problems with Gaps in Service Quality Summary for Service Quality q The method essentially involves conducting a sample survey of customers so that their perceived service needs are understood. q 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. q 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 Methodology 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) Functions of SERVQUAL q 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-for-profit settings. q Some of the published studies include : Hotels ,travel and tourism Car servicing, business schools Accounting firms, architectural services Airline catering Mobile Telecommunications in Macedonia Applications of SERVQUAL q SERVQUAL is considered to be useful model for qualitatively exploring and assessing customers' service experiences q It is an efficient model in helping an organization shape up their efforts in bridging the gap between perceived and expected service q SERVQUAL is used to track customer's expectations and perceptions over time to compare the company's SERVQUAL scores against competitors. q 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. Summary RATER q We can assess service quality from the customer’s perspective q q We can track customer expectations and perceptions over time and the discrepancies between them q q We can compare a set of SERVQUAL scores against those of competitors or best practice examples Remarks for SERVQUAL