MBA Sales & Marketing SEM Iv

Subject Name: Service Marketing

Module 3: Service Quality
Definition of Service Quality
• There are a number of different “definitions” as to what is meant by services quality.
• In its simplest form service quality is a product of the effort that every member of the organization
invests in satisfying customers.
• In its broadest sense service quality is defined as superiority or excellence as perceived by the
customer.
More especially service quality has been defined as:

• The delivery of excellent or superior service relative to customer expectations.

• Quality is behavior – an attitude – that says you will never settle for anything less community, your
stockholders or colleagues with whom you work every day.

• When we want to be effective – delivering good quality to the customer – we must produce services
that meet “as much as possible” the needs of the consumer.

• Quality is providing a better service than the customer expects.

Meaning of Service Quality:
• Service quality is generally viewed as the output of the service delivery system, especially in the
case of pure service systems. Moreover, service quality is linked to consumer satisfaction.

• Although there is no consensus in the research community about the direction of causality
relating quality and satisfaction, the common assumption is that service quality leads to satisfied
customers.

• For example – customers leaving a restaurant or hotel are asked if they were satisfied with the
service they received. If they answer “no,” one tends to assume that service was poor.

• Direct service providers, such as waitresses, also note that at times the best service efforts are
criticized because the customer’s perceptions of the service are clouded by being in a bad mood
or having a disagreement with someone just before arriving at the restaurant.
 Service Quality – Characteristics
• (i) Clients are a direct part of the process, bringing perceptions and expectations to the transaction that
become part of their interaction with you.

• (ii) Unlike a manufactured product, which can be made, inspected, and controlled for quality before it is
released to the client, service quality cannot be inspected before delivery.

• (iii) Because clients participate fully in the transaction, they are concerned both with the output or result
of the transaction, and the process for delivering that outcome.

• (iv) In a production environment, eliminating variance is critical to making high-quality goods. In

delivering service, satisfying clients depends not on eliminating variance, but rather on personalizing
the service delivery to the unique circumstances of each transaction. Applying certain principles
consistently rather than providing an identical response to each transaction, is the key to delivering
quality service.

• (v) Client satisfaction is subjective. It is made up of two essential ingredients—expectations and

perceptions of delivery. Clients have unique expectations based on their individual experience and
needs. They have their own perception of what they received. Any difference between what they
expected to get and what they perceive they got, will affect their satisfaction
Quality Perspectives

• Product-based - from another hand, this perspective is about measured how good is the product. And
it's an impartial thing, far away from how the customer feels about this product. It's answer a question:
how does the product work? The product based scenario based on some hard data, e.g. how fast it
restart, or how much time left between failures, etc. Limitation, in that case, is that the higher quality of
the product can't ensure that the people will like the product. This perspective doesn't care about
customers individual taste or preference.

• User-based - it's about how product fulfill the customer needs and expectations. It's also quite tricky
because customers have a wide spectrum of interests, needs, and expectations. We have to choose if
we want to deeply satisfy a few customers or partially satisfy many customers.

• Value-based - quality from value-based perspective is about costs and price. What cost/price will be
acceptable in this case.
Quality Perspectives

• Manufacturing-based - it relates to the production and engineering requirements. When we think

about quality from a manufacturing point of view we want to set up the requirements, specifications,
and technology inside the company. Improvement there is for example to reduce scratch. Quality, in
this case, cares about how manufacturing process looks like. The customer doesn't see this inside
work. And he or she wants to reduce production costs by reducing quality from manufacturing
perspective. It's quite a dangerous situation.

• Transcendent - it means that quality is hard to define. It's quite blurred to define. It's like I can’t define
it, but I know when I see it.. The examples of this point of view are: "I love this product", "I feel beautiful"
(after usage of some cosmetic). It's mainly feelings about something.
Gap Model of Service Quality

• This model can help a firm desirous of improving service quality to focus better on its strategies and
service processes.
• This model can not only be used to find and identify areas in service delivery and designs (which
might lack quality), but also measure and monitor quality in service.

• The model professes two types of gaps:

• The Customer Gap
• The Provider Gap
•
a) The Customer Gap

• Customer Gap is the gap between customer expectations and customer perceptions. This, in other words, is the
service quality shortfall as seen by the customers. Customers develop expectations from receipt of external
stimuli from many sources - ranging from those that are Notes company-controlled to social influences. These
form the bases of his reference-to-come for the service experience. The customer’s perceptions indicate the
service as actually received, for all practical purposes, since what we perceive is what is real to us. Perceptions
are everything.

 Company-controlled external stimuli are: service product/offer, price, advertising, promotions, displays, outlets
etc.
 Social influences as external stimuli are: word of mouth communications and reference groups.
 Other influencers of expectations are: personal needs and past experience of the customer.
a) The Customer Gap

• A customer is satisfied with a certain restaurant; but his last experience there (it could be because of a new
waiter) could leave him embittered, washing away years of happy experiences at one go.

• The quality of a service has two components:

 Technical Quality: This is the end result of the service operations process.
 Functional Quality: This is about the process, especially concerning the interaction between the customer and
service provider.
b) The Provider Gap

• There are four provider gaps and these in sum total are the cause of the Customer Gap. They are the
shortfalls within the service firm. To close the customer gap, the provider gap (or, as also known,
Company Gap) has to be bridged. The four provider gaps are:

Gap 1: Customer Expectation-Management Perception Gap

Gap 2: Management Perception- Service Quality Expectation Gap

Gap 3: Service Quality Specifications - Service Delivery Gap

Gap 4: Service Delivery - External Communications to Customer

The Service Triangle Management Model

• There is a revolution taking place in the service industry, necessitating a radical change in every service
professional’s perspective.

• Two models typify the change in the service perspective today:

 The Industrial Management Model: This is prevalent today and is a hangover from the industrial era.

• Example: Jewellers of Mumbai employing Bengali goldsmiths. Even basic hygiene factors aren’t met and the
goldsmiths live and work in abysmal conditions. Another example would be the myriad call centres that are
sprouting all over India today. To get clients and projects, they are pursuing cost-cutting measures as the means
to control expenses.

• The Market-focused Management Model:

• This is the model which can be used by service firms as a replacement to meet the new environment changes
for survival. It is focuses on the components of the firm that facilitate the firm’s service delivery system. It
proposes that the firm should be supportive of those personnel who serve the customers and interact with
them.
Different types of marketing during the service transaction

• 1. External Marketing:

• The company does external marketing on the customer.

• It promises benefits, explains features and assures satisfaction by way of advertising, public relations exercises
and other forms of corporate communication. It uses mass-media to convey its promises.

• It makes promises to the customers.

• 2. Internal Marketing:

• The Company does internal marketing to its providers. The company has to provide working space like offices,
and equipment’s, like computers, and telephones to its provider.

• It also has to recruit, select and trained appropriate employees, channel partners, and franchisees.

• It enables the providers to complete the service transaction. The company enables its promises.
Different types of marketing during the service transaction

• 3. Interactive Marketing:

• The providers do interactive marketing with the customer.

• The provider is the one who interacts with the customers.

• The provider is the face of the company and represents the company. Both the customer as well and provider
get instant feedback about each other during a service transaction.
SERVQUAL Model
Importance of Quality

• The importance of quality can be assessed by going through the following points:

• Lower Costs:

• Higher quality of services imply fewer mistakes for any repeat tasks, service recovery exercises or refunds to
disgruntled customers. Preventive and corrective measures through quality control processes lower costs and
increases productivity.

• Immune or Less Vulnerable to Price War:

• Service firms known for their high-quality services have an additional differentiating attribute and can avoid the
service commodity trap. They can afford to have a higher price as they offer more benefits than the
competition.

• Higher Customer Loyalty:

• As mentioned in the previous unit and section, service quality ensures customer satisfaction that drives
customer loyalty and enhanced profits.
Importance of Quality

• Higher Market Share:

• Loyal customers contribute to positive word-of-mouth publicity (the ‘buzz effect’), which broadens customer
base with minimal costs.

• Loyal Internal Customers:

• The previous unit has explored the linear relationship between happy employees and customer loyalty, and a
firm’s profitability. Employees become proud of the firm for which they are working; having a sense of belonging
is known for inspiring and delivering high quality services. Lower attrition level lowers manpower and training
costs and the service firm can leverage on the knowledge and skill of its employees.

• Higher RoI:

• The service-profit chain had established in the previous unit that high quality services contribute to higher
profitability.
T h a n k Yo u !