Topic 5

Chapter 12

Defining and Measuring

Service Quality

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 The major objectives of this chapter are to
introduce you to the concepts of service quality,
service quality measurement, and service
quality information systems.

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 Introduction
• One of the few issues on which service quality
researchers agree is that service quality is an
elusive and abstract concept that is difficult to
define and measure.
• This particular problem is challenging for
academicians and practitioners alike.

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 What Is Service Quality?
• The best way to begin a discussion of service
quality is to attempt first to distinguish service
quality from customer satisfaction.
• Most experts agree that customer satisfaction is
a short-term, transaction-specific measure,
whereas service quality is an attitude formed by
a long-term, overall evaluation of a performance.
• The two concepts of customer satisfaction and
service quality are intertwined.
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• However, the relationship between these two
concepts is unclear.
• Some believe that customer satisfaction leads to
perceived service quality, while others believe
that service quality leads to customer
satisfaction.
• the relationship between customer satisfaction
and service quality and the way these two
concepts relate to purchasing behavior remains
largely unexplained.
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 One plausible explanation is that..
satisfaction assists consumers in revising service quality perceptions.
1. Consumer perceptions of the service quality of a firm with which
he or she has no prior experience is based on the consumer’s
expectations.
2. Subsequent encounters with the firm lead the consumer through
the disconfirmation process (where perceptions and expectations
are compared), and revised perceptions of service quality are
formed.
3. Each additional encounter with the firm further revises or
reinforces service quality perceptions. In other words, if we added
up a customer’s satisfaction over time with a single firm, this
would equate to the customer’s service quality perception (e.g.,
Sat1 Sat2 Sat3 Sat4 Satn Service Quality).
4. In turn, revised service quality perceptions modify future
consumer purchase intentions toward the firm.

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The Difference in Quality Perspectives
between Goods and Services
• Service quality offers a way of achieving
success among competing services.
• Establishing service quality may be the only
way of differentiating oneself.
• Service quality differentiation can generate
increased market share and ultimately mean
the difference between financial success and
failure.

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 Diagnosing Failure Gaps in Service
Quality
• In the hopes of better understanding how a firm
can improve its overall service quality, the service
quality process can be examined in terms of five
gaps between expectations and perceptions on
the part of management, employees, and
customers
• The most important gap, the service gap (for our
purposes also known as Gap 5), describes the
distance between customers’ expectations of
service and their perception of the service
actually delivered.

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 The Customer Gap
is the difference between customer expectations and
perceptions.

Customer expectations
are standards or reference Expected service
points that customers bring
into the service experience. Customer gap

Customer perceptions
are subjective assessments Perceived service
of actual service
experiences.
Conceptual Model of Service Quality

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Word of Mouth Personal Needs Past Experience
Communication

Expected Service

CUSTOMER Gap 5

Perceived Service

Gap 4
External
Gap 1 Service Delivery Communications
to Customers
Gap 3
COMPANY
Customer-driven
Service designs &
standards
Gap 2
Management
Perception of
Customer Expectation
• Gap 1: The knowledge gap—the difference between
what consumers do expect of a service and what
management perceives that consumers expect.
• Gap 2: The standards gap—the difference between
what management perceives that consumers expect
and the quality specifications set for service delivery.
• Gap 3: The delivery gap—the difference between the
quality specifications set for service delivery and the
actual quality of service delivered. For example, do
employees perform the service as they were trained?
• Gap 4: The communications gap—the difference
between the actual quality of service delivered and the
quality of service described in the firm’s external
communications (e.g., advertising, point-of-purchase
materials, and personal selling efforts).

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 The Provider Gaps
are the gaps occur within the organization
providing the service.

Gap 1: Not knowing what customer expect

Gap 2: Not selecting the right service design and standards
Gap 3: Not delivering to service design and standards
Gap 4: Not matching performance to promises
Gap 1. Not knowing what customer expect

Customer expectations

Company perceptions
of customer expectation
1. Inadequate marketing research orientation
• Insufficient marketing research
• Research not focused on service quality
• Inadequate use of market research

2. Lack of upward communication

• Lack of interaction between management & customers
• Insufficient communication between contact employees &
managers
• Too many layers between contact personnel & top
management
3. Insufficient relationship focus
• Lack of market segmentation
• Focus on transactions rather than relationships
• Focus on new customers rather than relationship
customers

4. 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 to
service failures
 Gap 2. Not selecting the right service designs and
standards

Customer-driven service
designs & standards

Management perceptions
Of customer expectations

1. Poor service design

• Unsystematic new service development process
• Vague, undefined service designs
• Failure to connect service design to service positioning
2. 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

3. Inappropriate physical evidence and servicescape

• Failure to develop tangibles in line with customer
expectations
• Servicecape design that does not meet customer &
employee needs
• Inadequate maintenance and updating of the servicescape
Gap 3: Not delivering to service designs and standards

Customer-driven service
designs & standards

Service delivery
1. Deficiencies in human resource policies
• Ineffective recruitment
• Role ambiguity and role conflict
• Poor employee-technology job fit
• Inappropriate evaluation and compensation systems
• Lack of empowerment, perceived control, and team-work

2. Customer who do not fulfilling roles

• Customers lacking knowledge of their roles and
responsibility
• Customer negatively impacting each other
3. Problems with service intermediaries
• Channel conflict over objectives and performance
• Difficulty controlling quality and consistency
• Tension between empowerment and control

4. Failure to match supply and demand

• Failure to smooth peaks and valleys of demand
• Inappropriate customer mix
• Overreliance on price to smooth demand
Gap 4: Not matching performance to promises

Service delivery

External communication
to customers
1. Lack of integrated services marketing communication
• Tendency to view each external communication as
independent
• Absence of interactive marketing communication
• Absence of strong internal marketing program

2. Ineffective management of customer expectations

• Absence of customer expectation management through
all forms of communication
• Lack of adequate education for customers
3. Overpromising
• Overpromising in advertising
• Overpromising in personal selling
• Overpromising through physical evidence cues

4. Inadequate horizontal communications

• Insufficient communication between sales & operations
• Insufficient communication between advertising &
operations
• Differences in policies and procedures across branches or
unit
 Measuring Service Quality:
The SERVQUAL Measurement Scale
• Although measurements of customer satisfaction
and service quality are both obtained by
comparing perceptions to expectations,
differences between the two concepts are seen in
their operational definitions.
• Satisfaction compares consumer perceptions to
what consumers would normally expect, service
quality compares perceptions to what a
consumer should expect from a firm that delivers
high-quality services.

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SERVQUAL: AN INSTRUMENT FOR MEASURING
SERVICE QUALITY

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 SERVQUAL
• The SERVQUAL measurement scale is based on
five service quality dimensions.
• The five dimensions include:
1. Tangibles
2. Reliability
3. Responsiveness
4. Assurance
5. Empathy
• 22 questions of expectations and 22 questions
of perceptions  gap scores
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 10 to 5 Dimensions of SERVQAL
Original Ten
Dimensions for
Tangibles Reliability Responsiveness Assurance Empathy
Evaluating
Service Quality
Tangibles
Reliability
Responsiveness
Competence
Courtesy
Credibility
Security
Access
Communication
Understanding the
Customer
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 Dimension and Definition
Dimension Definition
Tangibles Appearance of physical facilities, equipment, personnel, and
communication materials.
Reliability Ability to perform the promised service dependably and accurately
Responsiveness Willingness to help customers and provide prompt service.
Competence Possession of the required skills and knowledge to perform the
service.
Courtesy Politeness, respect consideration, and friendliness of contact
personnel.
Credibility Trustworthiness, believability, honesty of the service provider.
Security Freedom from danger, risk, or doubt.
Access Approachability and ease of contact.
Communication Keeping customers informed in language they can understand and
listening to them
Understanding the Making the effort to know customers and their needs.
Customer
Assurance Knowledge and courtesy of employees and their ability to convey
trust and confidence.
Empathy Caring, individualized attention the firm provides its customers. 29
 The Tangibles Dimension
Tangibles Expectations:
1. E1. Excellent companies will have modern looking equipment.
2. E2. The physical facilities at excellent companies will be visually
appealing.
3. E3. Employees of excellent companies will be neat in appearance.
4. E4. Materials associated with the service (such as pamphlets or
statements) will be visually appealing in an excellent company.

Tangibles Perceptions:
1. P1. XYZ has modern-looking equipment.
2. P2. XYZ’s physical facilities are visually appealing.
3. P3. XYZ’s employees are neat in appearance.
4. P4. Materials associated with the service (such as pamphlets or
statements) are visually appealing at XYZ.

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 The Reliability Dimension
Reliability Expectations:
1. E5. When excellent companies promise to do something by a certain
time, they will do so.
2. E6. When customers have a problem, excellent companies will show a
sincere interest in solving it.
3. E7. Excellent companies will perform the service right the first time.
4. E8. Excellent companies will provide their services at the time they
promise to do so.
5. E9. Excellent companies will insist on error-free records.

Reliability Perceptions:
1. P5. When XYZ promises to do something by a certain time, it does so.
2. P6. When you have a problem, XYZ shows a sincere interest in solving it.
3. P7. XYZ performs the service right the first time.
4. P8. XYZ provides its services at the time it promises to do so.
5. P9. XYZ insists on error-free records.

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 The Responsiveness Dimension
Responsiveness Expectations:
1. E10. Employees of excellent companies will tell customers exactly
when services will be performed.
2. E11. Employees of excellent companies will give prompt service to
customers.
3. E12. Employees of excellent companies will always be willing to
help customers.
4. E13. Employees of excellent companies will never be too busy to
respond to customer requests.

Responsiveness Perceptions:
1. P10. Employees of XYZ tell you exactly when service will be
performed.
2. P11. Employees of XYZ give you prompt service.
3. P12. Employees of XYZ are always willing to help you.
4. P13. Employees of XYZ are never too busy to respond to your
requests.
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 The Assurance Dimension
Assurance Expectations:
1. E14. The behavior of employees of excellent companies will instill
confidence in customers.
2. E15. Customers of excellent companies will feel safe in their
transactions.
3. E16. Employees of excellent companies will be consistently
courteous with customers.
4. E17. Employees of excellent companies will have the knowledge
to answer customer questions.

Assurance Perceptions:
1. P14. The behavior of employees of XYZ instills confidence in
customers.
2. P15. You feel safe in your transactions with XYZ.
3. P16. Employees of XYZ are consistently courteous with you.
4. P17. Employees of XYZ have the knowledge to answer your
questions.
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 The Empathy Dimension
Empathy Expectations:
1. E18. Excellent companies will give customers individual attention.
2. E19. Excellent companies will have operating hours convenient for
all their customers.
3. E20. Excellent companies will have employees who give customers
personal attention.
4. E21. Excellent companies will have the customer’s best interest at
heart.
5. E22. The employees of excellent companies will understand the
specific needs of their customers.

Empathy Perceptions:
1. P18. XYZ gives you individual attention.
2. P19. XYZ has operating hours convenient to all its customers.
3. P20. XYZ has employees who give you personal attention.
4. P21. XYZ has your best interests at heart.
5. P22. Employees of XYZ understand your specific needs.
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Determining the Importance of Each of the
Five Dimensions
• Reliability 30
• Responsiveness 20
• Tangibles 10
• Assurance 20
• Empathy 20
100

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 Criticisms of SERVQUAL
• Length of the Questionnaire
• The Validity of the Five Dimensions

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 The Seven Dimensions of E-QUAL
1. Accessibility
2. Navigation
3. Design and Presentation
4. Content and Purpose
5. Responsiveness
6. Interactivity, Customization, and
Personalization
7. Reputation and Security

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Thank you

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