BBA-M-2: SERVICE MARKETING

UNIT- 5 Service Performance: Evaluating Success of Service Offering: Service quality and
measurement, Complaint handling, Service Guarantees. Role of CRM, The Gaps Model of
Service Quality, Latest issues in service marketing with reference to Uber, Ola, OYO,
Swiggy, Zomato.

➢ Service quality and measurement

Service quality refers to the degree of excellence in the service provided by a
business or organization. It is a critical factor in customer satisfaction and loyalty.
Measuring service quality is essential for businesses to identify areas for
improvement and ensure that customer expectations are met or exceeded. Various
models and frameworks have been developed to measure service quality, and one
of the most widely used is the SERVQUAL model.

SERVQUAL Model:
Developed by Parasuraman, Zeithaml, and Berry, the SERVQUAL model identifies
five key dimensions of service quality:

1. Tangibles: The physical appearance of facilities, equipment, personnel, and

communication materials.

2.Reliability: The ability to perform the promised service dependably and

accurately.

3. Responsiveness: The willingness to help customers and provide prompt service.

4. Assurance: The knowledge and courtesy of employees and their ability to convey
trust and confidence.

5. Empathy: The provision of caring, individualized attention to customers.

To measure service quality using the SERVQUAL model, businesses typically

conduct surveys or interviews to gather customer perceptions and expectations
related to each dimension. The perceived service quality is then calculated by
subtracting the expectation score from the perception score for each dimension. A
 positive difference indicates that the service exceeds expectations, while a negative
difference suggests a gap in service quality that needs attention.

Other Methods for Measuring Service Quality:

1. Service Encounter Surveys: Collect feedback from customers immediately after

a service interaction.

2. Mystery Shopping: Use anonymous individuals to assess service quality by

posing as customers and evaluating their experience.

3. Customer Feedback and Complaints: Monitor and analyze customer feedback

and complaints to identify areas for improvement.

4. Net Promoter Score (NPS): Measures the likelihood of customers recommending

a business to others, providing an indication of overall satisfaction.

5. Employee Feedback: Engage employees in providing insights into service quality

since they often have firsthand knowledge of customer interactions.

6. Benchmarking: Compare service quality against industry standards or

competitors to identify relative strengths and weaknesses.

➢ Complaint handling
-Importance
- Customer complaints are inevitable in any business, including service-oriented ones.
How a company handles complaints can significantly impact its reputation and customer
loyalty.
- Effective complaint handling can turn a dissatisfied customer into a loyal one, as it
demonstrates a commitment to customer satisfaction.
 Key Steps in Complaint Handling:
1. Prompt Response: Acknowledge the complaint as quickly as possible. This
shows customers that their concerns are taken seriously.
2. Active Listening: Understand the customer's perspective by actively listening
to their concerns. This helps in addressing the root cause of the problem.
3. Apologize and Empathize: Apologize for the inconvenience and express
empathy. Customers appreciate a sincere acknowledgment of their issues.
4. Resolution: Provide a solution or take corrective action to resolve the
problem. This may involve offering a refund, replacement, or other appropriate measures.
5. Feedback and Follow-Up: Encourage customers to provide feedback on the
resolution process. Follow up to ensure their satisfaction and to show a commitment to
improvement.

- Benefits of Effective Complaint Handling:

- Retention of customer loyalty.
- Positive word-of-mouth marketing.
- Improvement of products or services based on customer feedback.
- Enhancement of brand reputation.

➢ Service Guarantees
Service guarantees are promises made by a service provider regarding the quality,
reliability, and satisfaction of their services. They assure customers that certain
standards will be met, and if not, compensation or remedies will be provided.

Key Components of Service Guarantees:

1. Clear Terms: Clearly define the terms and conditions of the guarantee,
including what is covered and any limitations.
2. Measurable Standards: Specify measurable standards or benchmarks that
customers can use to evaluate the service.
 3. Compensation: Outline what compensation or remedies will be provided in
case the service falls short of the guaranteed standards.
4. Communication: Effectively communicate the service guarantee to
customers to build trust and confidence.

- Benefits of Service Guarantees:

- Builds trust and confidence among customers.
- Differentiates the service provider from competitors.
- Encourages a customer-centric focus on service quality.
- Provides a competitive edge in the market.

Customer relationship management (CRM)

Customer relationship management (CRM) refers to the principles, practices, and
guidelines that an organization follows when interacting with its customers.

From the organization's point of view, this entire relationship encompasses direct
interactions with customers, such as sales and service-related processes, forecasting,
and the analysis of customer trends and behaviors. Ultimately, CRM serves to enhance
the customer's overall experience.

Customer Relationship Management (CRM) plays a crucial role in the success of

businesses across various industries. Its primary focus is on managing and nurturing
relationships with customers. Here are key roles and benefits of CRM:

1. Customer Data Management: CRM systems store and organize customer

information in a centralized database. This includes contact details, purchase
history, preferences, and interactions.
2. Improved Customer Understanding: By analyzing customer data, businesses
can gain insights into customer behavior, preferences, and needs. This
understanding allows for more personalized and targeted marketing and
customer service efforts.
3. Enhanced Communication: CRM facilitates better communication between
different departments within a company. Sales, marketing, and customer
service teams can access a shared database, ensuring everyone is on the same
page regarding customer interactions and history.

4. Sales Automation: CRM systems often include features that automate sales
tasks such as lead generation, opportunity tracking, and quote generation. This
streamlines the sales process and helps sales teams focus on building
relationships.

5. Marketing Campaign Management: CRM tools enable businesses to plan,

execute, and track marketing campaigns. By understanding customer
preferences, businesses can create more targeted and effective marketing
strategies.

6. Customer Service Improvement: CRM helps in managing customer support

interactions more efficiently. Customer service representatives can access
customer information quickly, leading to faster issue resolution and improved
customer satisfaction.

7. Customer Retention: By providing personalized experiences and addressing

customer needs, CRM contributes to customer loyalty and retention. Retaining
existing customers is often more cost-effective than acquiring new ones.

8. Analytics and Reporting: CRM systems offer reporting and analytics tools that
allow businesses to track key performance indicators (KPIs), measure the
success of campaigns, and identify areas for improvement.

9. Cross-Selling and Upselling: With a comprehensive view of customer

preferences and purchasing history, businesses can identify opportunities for
cross-selling or upselling additional products or services.
 10. Workflow Automation: CRM systems automate routine tasks and workflows,
reducing manual efforts and the likelihood of errors. This enhances overall
operational efficiency.

11. Mobile Access: Many CRM systems offer mobile applications, allowing sales and
service teams to access crucial information while on the go, enhancing
productivity and responsiveness.

The Gaps Model of Service Quality

The Gaps Model of Service Quality, also known as the SERVQUAL model, is a framework
developed by A. Parasuraman, Valarie Zeithaml, and Leonard Berry. It is designed to help
organizations understand and measure the gaps that may exist between customer
expectations and perceptions of service. The model identifies five key gaps that can affect
service quality:

1. Gap 1: Knowledge Gap (Lack of Understanding)

This gap represents the difference between customer expectations and management
perceptions of those expectations. It occurs when there is a lack of understanding or
awareness of what customers expect from the service.

2. Gap 2: Policy Gap (Inadequate Service Quality Specification)

Gap 2 is the difference between management perceptions and service quality

specifications. It arises when there is a failure to set clear service quality standards
or when the standards set are not aligned with customer expectations.

3. Gap 3: Delivery Gap (Service Performance Gap)

This gap occurs between service quality specifications and the actual service
delivery. It reflects the difference between what the company promises to deliver
and what is actually delivered to the customer.
 4. Gap 4: Communication Gap (Lack of Communication with Customers)

Gap 4 is the difference between service delivery and external communications. It

arises when there is a lack of communication or miscommunication between the
service provider and the customer regarding what to expect from the service.

5. Gap 5: Perception Gap (Customer Perception vs. Customer Expectation)

Gap 5 represents the difference between customer expectations and perceptions

of the service received. It is the ultimate gap and is influenced by the previous four
gaps. If this gap is large, it indicates a significant difference between what
customers expect and what they perceive they have received.

To measure and analyze service quality, the SERVQUAL model uses a set of standardized
survey instruments to gather customer perceptions and expectations across these five
gaps. The instrument typically includes questions related to tangibles, reliability,
responsiveness, assurance, and empathy. The comparison of perceived and expected
service quality helps organizations identify areas for improvement and enhance overall
customer satisfaction.

By addressing the gaps identified by the model, organizations can improve the quality of
their services and better meet customer expectations, leading to increased customer
satisfaction and loyalty.
➢ Latest issues in service marketing with reference to Uber, Ola,
OYO, Swiggy, Zomato.
1. Regulatory Challenges:
Ride-sharing services like Uber and Ola have faced regulatory challenges in
various regions globally. Many cities and countries have implemented or
considered regulations that impact the operation of these services, ranging
from safety standards to licensing requirements.

Food delivery services like Swiggy and Zomato have also faced regulatory issues
related to food safety, hygiene, and the classification of gig workers.

2. Labor and Gig Economy Concerns:

Companies in the gig economy, including Uber and Ola, have faced criticism
regarding the classification of workers as independent contractors rather than
employees. This has led to debates about workers' rights, benefits, and job
security.
Swiggy and Zomato have faced similar issues in their food delivery services,
where delivery personnel are often considered gig workers.

3. Competition and Market Saturation:

The intense competition in the ride-sharing and food delivery sectors has led to
aggressive marketing strategies, including heavy discounts and promotions.
This can impact profitability and long-term sustainability.
Market saturation in certain regions might make it challenging for these
companies to continue growing at the same pace.

4. Customer Trust and Safety:

Trust and safety concerns, especially in ride-sharing services, can significantly
impact customer satisfaction and usage. Issues related to driver behavior,
vehicle safety, and user data privacy have been important in this context.
5. Technological Disruptions:
The rapid evolution of technology can present challenges in terms of keeping
up with customer expectations. Companies need to continuously innovate to
stay relevant and provide a seamless user experience.

6. Public Relations and Brand Image:

Negative incidents or controversies, such as safety concerns, legal issues, or
public relations mishaps, can harm the brand image of these service providers.
Maintaining a positive public perception is crucial for long-term success.

7. Pandemic-Related Challenges:
The COVID-19 pandemic has affected travel, hospitality, and restaurant
industries. Companies like OYO, Swiggy, and Zomato have had to adapt to
changing consumer behavior, lockdowns, and health and safety concerns.