10/25/21, 11:53 PM CHAPTER 8: PRODUCT/SERVICES AND QUALITY

PRODUCT/SERVICES AND QUALITY

P2, S3, T1

 
Introduction
 
 Products and Services that
meet or exceed customer expectations result in
customer satisfaction.
Quality is the expected product/service being realized. Before a
customer makes a purchase (exchanges money for a product/service) he or she
does a
mental calculation:  “Is the
worth of the product/service (as I perceive and expect)
equal to the money that
I am about to exchange?” 
 
Products/services that are produced and manufactured to specifications that are
appropriate to the price (money to be given in exchange by the customer) of the
product/service is an operational or manufacturing view of quality.  Here, the customer
receives the value that he or she expects since operations has built quality standards
into the product. An operations view of quality is a common view of the concept of
quality.
 
            However,
quality is a function of how the customer views the product/service
that he or
she receives. The customer view always compares what they expect with
what they
actually receive regardless of how operations conceives quality. How do
customers arrive at their expectations?
 
Marketing, especially sales, has a
major effect on how the customer views
quality.  As mentioned earlier, customer satisfaction is based on receiving
the actual
product/service as expected. 
When marketing and sales enthusiastically promises a
product/service
that manufacturing or operations (in the case of a hospitality service)
cannot
deliver, then expectations are not met, the customer is dissatisfied, and
quality
(in the customers’ eyes) is not realized.
 
            Quality is
not an absolute to be determined by operations or manufacturing. 
Variables that affect quality are: (a) customer
expectations (obtained from marketing
and sales, as well as word of mouth
and previous experience), (b) actual
product/service received (how a service is
performed by operational people and actual
tangibles received (cold food for
example).  The following models explain
these basic
concepts. 
 
Discussion
 
 
What is Quality?
 
            There are
two perspectives and lenses through which to view quality:  Tangible
Product Orientation
and Intangible Service Delivery Orientation.  Both are necessary,

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however, the latter is the most important

since most tangible hospitality products are
becoming
            Tangible Product Orientation. Here focus is on the product itself but from
another two perspectives (Kotler, Bowen, and Makens, 1996):
 
1.         Product/Service Features. The product/service is seen as a set of features that
enhance customer satisfaction. While this may or may not be a customer focus
(depending if the customer truly asked what product enhancements they wanted), in
reality adding additional features in a hope that they will create customer satisfaction is
the approach. This approach adds to the cost of the product.  Justification for these
added features must be paid for by additional customer expenditure or the organization
gaining a pay-off due to increased customer loyalty.
 
Company image, word-of-mouth, and
marketing/sales (promotion and price-
levels) form customer expectations.  A hotel guest staying at the Ritz and paying
$300
per night will have very different expectations than a hotel guest of
Motel 6 paying $45
per night.  Thus,
both the guest at Motel 6 and the guest at the Ritz may conclude after
their
stay that they received quality rooms. Why can both Motel 6 and Ritz deliver a
quality room?  Because the room at the
Ritz and Motel 6 are not compared against one
another.  The in each case, the customers’
expectations were met by the room received
for the price (which is one variable
that signals expectations) that they paid.
 
Product features quality relates to
customer expectations.
 
2.         Freedom from Deficiencies. In the example above, the rooms at both the Ritz
and Motel 6 must be clean and the beds made-up daily. NOTE: Is there a price level
below which even these deficiencies ARE acceptable, for example, a low-end and run-
down motel?
 
           
 
            Seriously,
products must work.  At a basic
level, they must operate as they are
supposed to or the customer will determine
that the quality is inadequate.
 
            Intangible Service Delivery Orientation. Here the focus is on the process of
delivering the service. This involves two basic components: (a) Technical quality – the
means of service delivery and (b) Functional quality – the how of service delivery.
 
1.         Technical Quality. This includes the systems and infrastructure designed and
created to organize delivery of the service.  For example: computerized systems,
machines technical solutions, and know-how.
 
2.         Functional Quality.  The hospitality customer goes through many interactions
with employees in the creation and delivery of a hospitality experience.  A successful
meeting is the result of all functional areas of a hotel being synchronized and focused
on creating a beautiful symphony. Technical quality must be in place to facilitate such
coordination and allow the employees to work together.  Functional quality includes

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employee: attitudes, behavior, service mindedness, appearance, accessibility internal

relations and customer contacts.
 
 Quality Models
 
Models help us understand the
complexity of service quality. First, we will
discuss an early
foundational model:  The Perceived Service Quality Model developed
by
Christian Gronroos in 1982.  Second, we
will discuss an evolutionary form of the
Gronroos model, the Gap Analysis Model developed by
V. A. Zeithaml, A.
Parasuraman, and L. L. Berry in 1988.  This last model, currently packaged as the
SERVQUAL Model, is widely used
in the hospitality industry to understand and
improve the quality of
hospitality service.
 
Perceived Service Quality Model  (Figure 1)
In 1982, Christian Gronroos, of the
Swedish School of Economic, Helsinki,
Finland, introduced The Perceived Service Quality Model (see
Figure 1). According to
Gronroos, service quality studies and subsequent model
development has from the
beginning beenbased on what customers perceive as
quality.  In other words, service
quality is an outgrowth of the marketing concept; focus on the customer.  What is
important is what is perceived as
quality by the customer and not what designers or
operations people feel is
good or bad quality.
 
Customer buying behavior theories
have strongly influenced many service
quality models.  The notion that the customer’s post-purchase perception is a
function
of his or her pre-purchase expectations is the foundation of the
confirmation/disconfirmation concept of service quality.  The
confirmation/disconfirmation concept is
the foundation concept of both Gronroos’
1982, Perceived Service Quality Model
and the well-known  (1988) Gap Analysis
and
SERVQUAL models by V. A. Zeithaml, A. Parasuraman, and L. L. Berry
(Gronroos,
1991).
 
According to the Perceived Service
Quality model (Figure 1), the quality of a
service, as perceived by the
customer, is the result of a comparison between the
expectations of the
customer and his or her real-life experiences. 
If the “experienced
quality” exceeds “expected quality,” the “total
perceived quality” is positive. If
expectations are not met by performance or
the actual experience, the perceived quality
is low. There are multiple
customers in an internship program: students, internship
suppliers, and
sponsoring entities, for example.  Final
success is dependent on initial
expectations compared to actual performance.
 
 
 
 
 
 
 
 

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Figure 1
The Perceived Service Quality Model
Source: Gronroos, C. (1991). “Quality Comes to Service,” in The Service
Quality Handbook.
 
 
 
 
The Five-Gap Model
of Service Quality  (Figure 2)
 
Another widely used model of
service quality is known as the five gap model
(Kotler, Bowen, and Makens,
1996, pp. 357 - 361).  Knowing what
coustomers expect
is the first and possibly the most critical step in delivering
service quality.  Thus, the
marketing/
organization must know what customers expect to be able to provide
services
that customers perceive as excellent. 
This an extension of the marketing
concept and consultative selling
approach that: (a) first, learns through thorough
questioning (read extensive
market research) what the customer needs and wants

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(customer’s problem that

they want to be solved) and (b) second, delivering the
product/service benefits
that will solve the problem (satisfy the needs/wants).
 
 
 
 
 
 
 
 
 

           

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Figure 2
 
The Gap Analysis Model of Service Quality
 
Source:  Adapted from Kotler, P, Bowen, J and Makens,
J. (1996).  Marketing for
Hospitality
and Tourism.  Upper Saddle
River, NJ: Prentice Hall,  p. 358.
 
Gap 1: Consumer Expectations vs. Management Perceptions
 
           

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            Often
hospitality managers fail to understand what customers expect in the
offered
product/service. And, this includes understanding which features (of the
product)
are necessary to deliver high-quality service. Gap 1 occurs when this
breakdown of understanding occurs.
For example, a manager might develop a system
to ensure that all guests wait no
longer than 15 minutes to check in.  If
the hotel guest
gets upset after a 10 minute wait, then Gap 1 exists.
 
            Often,
hospitality firms initially survey customers to understand their
expectations.  However, over time these
customer expectations change (change is
constantly happening). If the
product/service does not adapt to these changes, then Gap
1 widens.
 
            Ongoing
research is essential to stay apprised of the changing customer
expectations.  Formal research plus
informal research (managers walking around and
talking to hospitality guests,
for example) is one source of information. 
The salesforce,
especially, for complex group business, is a vital
source of changing customer
expectations.
 
Gap 2:  Management Perception vs. Service Quality Specifications
 
            When
hospitality managers know what customers expect, BUT cannot or will
not
develop products/services and systems to deliver it, then Gap 2 occurs. Several
reasons for Gap 2 are:
 
1.         Inadequate
commitment to service quality,
2.         Lack of
perception of the feasibility of addressing customer expectations
3.         Inadequate task
standardization (within the hospitality organization)
4.         Absence of
goal-setting by management and inability to get employee “buy-
in.”
 
            The
hospitality industry has been accused of being short-term oriented.  Short-
term profits and unwillingness to invest
in human resources and technological tools
and equipment almost always causes
service quality delivery problems.
 
Gap 3:  Service Quality Specifications vs. Service Delivery
 
                        When
hospitality managers know what customers expect AND have
developed products/services,
systems, and specifications to deliver it BUT employees
are unable or unwilling
to deliver the service, then Gap 3
occurs. Several reasons for
Gap 3 are:
 
1.         Employees
are not given the tools and working conditions to do the job.
2.         Employees
are not correctly selected, trained, and motivated.
3.         Employees
are not properly “led” by managers
(Are managers really
“leaders?”)
Gap 4:  Service Delivery vs. External Communications
 

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            When
hospitality management (represented by marketing and sales executives)
promises
more in its external communications than it can deliver (operations) then Gap
4 occurs. External
communications includes, but is not limited to, advertising, public
relations,
pricing messages, and personal selling. 
 
            Hospitality
marketers must ensure that operations can deliver what marketing
(external communications) promises. 
General managers must fully understand the
marketing/selling process as
well as operational processes.  Why?  Because it is
obvious that the two areas
must “seamlessly” work together to meet customer
expectations.
 
Gap 5:  Expected Service vs. Perceived Service
 
            Gap 5 is where the
“rubber-meets-the-road.”  The size of
Gap 5 is dependent on
all of the other gaps.
 
1.         Expected
Service  is what the customer
expects to receive from the hospitality
organization.
 
2.         Perceived Service is what
the customer believes or perceives that he or she has
actually received from
the hospitality organization (after the service
experience).
 
3.         Gap 5 is the Difference
between the above.  Customer
satisfaction and quality
is dependent upon this gap being reduced or
eliminated.  Hospitality
management is
responsible for managing the absence or presence of this gap.
 
 
Summary of Models.
 
The two above quality models significantly affect the service industry. These
models offer ways for management to think about the way that they manage service
quality. Instead of the ineffective bandages of exhortations to employees to “smile,”
managers have these models to guide real structural changes that, if implemented, will
be both effective and efficient. 
 
Benefits of Service Quality
 
            The
hospitality industry has a reputation for being short-term oriented.  Often,
in this fast moving industry, there
is a large amount of “fire-fighting” that occurs. 
When problems arise seem to completely surround the hospitality
manager, survival is
key.  Thus, simply
handling the problem and moving to next is the pattern of activity. 
Long-term planning and serious thought seems
to be often overlooked.
 
            Ancient
wisdom continuously reminds the human being that, “if you don’t
know where you
are going, any road will take you there” (said the Cheshire Cat to
Alice in Through
the Looking-glass  by Lewis Carroll
written in the 1800s). The same
can be said for effective planning and
implementation by circumspect hospitality

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leadership. The hospitality industry

offers products and services that are often “me-
toos” and similar to
undifferentiated commodities such as salt or gasoline.  Anybody
can spend the money to build a beautiful
hotel, but not everybody can produce superior
service quality.  And, meeting customers’ expectations, as we
have seen above,
translates into service quality.
 
            Those
hospitality organizations that deliver service quality escape the
“commoditization” of the hospitality industry: 
they “stand-out” from their
competitors.  This differentiation leads to competitive advantage as well as
other
benefits. Some major benefits of delivering service quality are:
 
 
1.         Retaining Customers – This means “repeat business.”
 
2.         Referrals – Satisfied customers are happy to generate positive word-of-mouth.
 
3.         Avoidance of “Price” Competition – If your organization is seen by customers
as the same as others, then your product/service is essentially undifferentiated or like a
commodity.  As mentioned above, Differentiation is a strategy upon which to
effectively compete.  Price strategy is another way to compete, however this may not
always be possible or desirable. Attaining service quality allows competition based on
a differentiation strategy.
 
4.         Retention of Good Employees – Employees like to work for a “quality”
organization.
 
5.         Reduction of Costs – When quality is achieved, costs of correcting problems
(after they have occurred) is reduced.  Since a focus on quality stresses preventative
maintenance, then these costs are reduced.  Of course, many other costs are reduced
such as lowing employee turnover and the cost of having to motivate uninspired
employees (Kotler, Bowen, and Makens, 1996, pp. 362 - 364).  
 
Summary
 
Services are unique in the since
that they are intangible and, thus, customers
must have trust before
they purchase.  In predominantly selling
services, as in the
hospitality industry, quality and perception of
quality is essential. Service quality has
many benefits including the ability
for the organization to compete with a
“differentiation” strategy in a world of
“look-alike” hospitality products/services.
 
The good news is that thinking
hospitality managers have service quality
models that can guide them in
planning and implementing service quality systems. 
And, these systems are almost guaranteed to deliver “competitive
advantage.”
 
 
 
 

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References
            Berry, L.L.
and Parasuraman, A. (1991). Marketing Services: Competing
Through Quality.
New York: The Free Press.
 
Godfrey, A.B. and Kammerer,E.G.
(1991). “Service Quality vs. Manufacturing
Quality:  Five Myths Exploded,” in The Service Quality Handbook,
Scheuing, E.E and
Christopher, W.F. (Eds.). New York:  American Management Association.
 
Gronroos, C. (1990). Service
Management and Marketing: Managing Moments
of Truth in Service Competition.  Lexington, MA:  Free Press.
 
Gronroos, C. (1991). “Quality Comes
to Service,” in The Service Quality
Handbook, Scheuing, E.E and
Christopher, W.F. (Eds.). New York:  American
Management Association.
 
Kotler, P, Bowen, J and Makens, J. (1996).  Marketing for Hospitality and
Tourism.  Upper Saddle River, NJ: Prentice Hall.
 
 
Copyright ©2000 by Richard G. McNeill ALL RIGHTS RESERVED
 

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