SERVICE MARKETING

Chapter 2- Gap Model &

Service Quality
(SERVQUAL) Model

BRIG GEN AKM IQBAL AZIM, ndc, psc, G+, PhD 1

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 THE CUSTOMER & THE PROVIDER GAPS
 Customer Gap. The customer gap is the difference between
customer expectations and perceptions (see figure 2.1). Customer
expectations are standards or reference points that customers
bring into the service experience, whereas customer perceptions
are subjective assessment of actual service experiences.

 For example, when you visit an expensive restaurant, you

expect a high level of service, which will be considerably superior
to the level you would expect in a fast food restaurant. Closing the
gap between what customers expect and what they perceive is
critical to delivering quality service; it forms the basis for the gaps
model.

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THE CUSTOMER & THE PROVIDER GAPS

The Customer Gap

Expected Service

Customer Gap

Perceived Service

FIGURE 2.1 The Customer gap 5

THE CUSTOMER & THE PROVIDER GAPS
 Customer satisfaction and customer focus are very critical to
competitiveness of firms. Any company interested in delivering
quality service must be with a clear understanding of its customers.

 The sources of customer expectations are marketer-controlled

factors (such as pricing, advertising, sales promises) as well as
factors that the marketer has limited ability to affect (innate
personal needs, word of mouth communications, and competitive
offerings).

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THE CUSTOMER & THE PROVIDER GAPS
 The Provider Gaps. To close the all-important customer gap,
the gaps model suggests that four other gaps i.e. the provider gaps
need to be closed. These gaps occur within the organization
providing the service (hence the term provider gaps).

Gap 1: The Listening Gap

Gap 2: The Service Design and Standards Gap
Gap 3: The Service Performance Gap
Gap 4: The Communication Gap

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THE CUSTOMER & THE PROVIDER GAPS
 Provider gap 1 - The Listening Gap: The listening gap is
the difference between customer expectations of service and
company’s understanding of those expectations. Unknowing of
firm about accurate understanding of those expectations.

 Many reasons exist for managers not being aware of what

customers expect: they may not interact directly with customers,
or they may be unprepared to address them.

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THE CUSTOMER & THE PROVIDER GAPS
 When people with the authority and responsibility for setting
priorities, do not fully understand customers service expectations,
they may trigger a chain of bad decisions and suboptimal resource
allocations that result in Perceptions of poor service quality.

Figure 2.2 shows, the key factors responsible for provider gap 1.
An inadequate marketing research orientation is one of the critical
factors. Formal and informal methods to capture information
about customer expectations must be developed through
marketing research.

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THE CUSTOMER & THE PROVIDER GAPS
Techniques involving a variety of traditional research approaches
among them are customer interviews, survey research, complaint
systems, and customer panels etc. More innovative techniques,
such as service quality gap analysis etc.

 Another key factor is lack of upward communication. Frontline

employees often know a great deal about customers; if
management is not in contact with frontline employees and does
not understand what they know, the gap widens.

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 THE CUSTOMER & THE PROVIDER GAPS
Customer Expectations
 Inadequate marketing research orientation
Gap
Insufficient marketing research
1
Research not focused on service quality
Inadequate use of market research
 Lack of upward communication
Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management
  Insufficient relationship focus
Lack of market segmentation
Focus on transactions rather than relationships
Focus on new customers rather than relationship customers
  Inadequate service recovery
Lack of encouragement to listen to customer complaints
Failure to make amends when things go wrong
No appropriate recovery mechanism in place for service failure

 
 
  Company Understanding of Expectations
FIGURE 2.2 Key Factors leading to Provider  Gap 1: The Listening Gap 11
THE CUSTOMER & THE PROVIDER GAP-1 Cont…

 The listening gap is a lack of company strategies to retain

customers and strengthen relationships with them, an approach
called relationship marketing. Relationship marketing is distinct
from transactional marketing, the term used to describe the more
conventional emphasis on acquiring new customers, rather than on
retaining them.

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THE CUSTOMER & THE PROVIDER GAP-1 Cont…
Relationship marketing has always been a practice of wise and
successful business. Some companies often take a short-term view
and see each sale as a transaction. When companies focus too
much on attracting new customers, they may fail to understand the
changing needs and expectations of their current customers.

Such strategies might involve a well-defined complaint handling

procedure and an emphasis on empowering employees to react
on the spot, service guarantee or ways to compensate the
customer.

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THE CUSTOMER & THE PROVIDER GAPS

 Provider gap 2 - The Service Design and Standard Gap.

Accurate perceptions of customers’ expectations are necessary for
delivering superior quality service. It reflects accurate perceptions
of customer.

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 THE CUSTOMER & THE PROVIDER GAPS
Companies face difficulty in translating customer expectations
into service quality specifications that employees can understand
and execute. Provider gap 2 is the difference between company
understanding of customer expectations and development of
customer driven service designs and standards.

 Customers driven standards are different from the conventional

performance standard. Operations standards should correspond
to customer expectations and priorities rather than company
concerns.

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 THE CUSTOMER & THE PROVIDER GAPS
Customer Expectations

 Poor service design

Gap
Unsystematic new service development process
2 Vague undefined service designs
Failure to connect service design to service positioning
 Absence of customer driven standards
Lack of customer-driven service standards
Absence of process management of focus on customers’ requirements
Absence of formal process for setting service quality goals
 Inappropriate physical evidence and services scape
Failure to develop tangibles in line with customer expectations
Service scape design that does not meet customer and employee needs
Inadequate maintenance and updating of the service scape
 
 
 
Development of Customer Driven Service
 
 
FIGURE 2.3 Key Factors Leading to Provider Gap 2: Service Design and Standards Gap 16
THE CUSTOMER & THE PROVIDER GAPS

 Some management believe that customers’ expectations are

unreasonable or unrealistic.

 Technology changes and improvements are particularly helpful

in closing this gap. Example: Digital service Design and Planning
Lab inaugurated by Honorable President on 22 Jan 20 to bring all
151 Universities under same digital platform…admission, service.
BUP is top ranking in digital platform.

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THE CUSTOMER & THE PROVIDER GAPS

 All people involved (managers, frontline employees, and behind

the scenes support staff) should be working with the same
concepts of the new service, based on customer needs and
expectations.

 For a service, suffer unless everyone has the same vision of the
service and associated issues.

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THE CUSTOMER & THE PROVIDER GAPS

 New and exciting services should be developed and improved in

a careful manner as possible. We will see the tools that are most
effective in-service development and design, including service
blueprinting.

The quality of service delivered by customer contact personnel is

critically influenced by the standards against which they are
evaluated and compensated.

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THE CUSTOMER & THE PROVIDER GAPS

 Provider Gap 3: The Service Performance Gap. Firm must have

systems, processes, and people in place to ensure that service
delivery actually matches (or is even better than) the designs and
standards in place.

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THE CUSTOMER & THE PROVIDER GAPS
 Provider gap 3 is the discrepancy between development of
customer driven service standards and actual service
performance by company employees.

 Standard must be backed by appropriate resources

(systems/technology, process and people) and be enforced to be
effective.

Narrowing the performance gap by ensuring that all the

resources needed to achieve the standards are in place.

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 THE CUSTOMER & THE PROVIDER GAPS
Customer Driven Service Design and Standards
 Deficiencies in human resource Policies
Ineffective recruitment
Gap Role ambiguity and role conflict
Poor employee technology job fit
3 Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control and teamwork
 Failure to match supply and demand
Failure to smoke peaks and valleys of demand
Inappropriate customer mix
Over reliance on price demand
 Customer not fulfilling roles
Customer lack knowledge of their roles and responsibilities
Customers negatively impact each other
 Problem with service intermediaries
Channel conflict over objectives and performance
Channel conflict over cost and rewards
Difficulty controlling quality and consistency
Tension between empowerment and control
 

  
 
Service Delivery
 
FIGURE 2.4 Key Factors Leading to Provider Gap 3: The Service Performance Gap 22
THE CUSTOMER & THE PROVIDER GAPS

Even if contact employees and intermediaries provides 100

percent consistent service delivery, the uncontrollable variables
of the customer can affect variability in service delivery.

Understanding customer roles and how customers behave

themselves can influence service delivery and outcomes are
critical.

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 THE CUSTOMER & THE PROVIDER GAPS
 Provider gap 4- the Communication Gap. It is the difference
between service delivery and the external communications.
Promises made by a service company through its media
advertising, sales force, and other communications.

Broken promises can occur for many reasons: overpromising in

advertising or personal selling, inadequate coordination between
operations and marketing, and difference in policies and
procedures across service outlets.

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 THE CUSTOMER & THE PROVIDER GAPS
Service Delivery
  
Lack of integrated services marketing communications
Gap Tendency to view each external communication as independent
Not including interactive marketing and communications plan
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Absence of strong internal marketing program
 Ineffective management of customer expectations
Not managing customer expectations through all forms of
communication
Not adequately educating customers
 Overpromising
Overpromising in advertising
Overpromising in personal selling
Overpromising through physical evidence cues
 Inadequate horizontal communications
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Difference in policies and procedures across branches or units
   Inappropriate pricing
High prices that raise customers’ expectations
Prices that are not tied to customers perceptions of value

External Communications to Customer

 
FIGURE 2.5 Key  Factors Leading to Provider Gap 4: The Communication Gap 25
THE CUSTOMER & THE PROVIDER GAPS

Service companies frequently fail to capitalize on opportunities

to educate customers to use services appropriately.

 Communications to customers involve issues that cross

organizational boundaries. This type of marketing is called
interactive marketing i.e. the marketing between contact people
and customers.

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THE CUSTOMER & THE PROVIDER GAPS
It must be coordinated with the conventional types of external
marketing used in product and service firms.

 When employees who promote the service, do not fully

understand the reality of service delivery. Effectively coordinating
actual service delivery with external communications narrows the
communications gap.

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THE CUSTOMER & THE PROVIDER GAPS
 Putting it all together: Closing the gaps. The key to closing
customer gap is to close provider gaps I through 4 and keep them
closed.

The Strategic Insight provides a service quality gaps audit, based

on the model.

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 THE CUSTOMER & THE PROVIDER GAPS
CUSTOMER Expected Service

Customer Gap

Perceived Service

Service Delivery External

communications
COMPANY Performance Communication to customer
Gap 3 gap 4
Listening gap1
Customer driven service
designs and standards
Service design and standards gap2

Company perceptions of
consumer expectations

FIGURE 2.6 Overall Gaps Model of Service Quality 29

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 MEASURING SERVICE QUALITY: SERVQUAL
 
Measurements of customer satisfaction and service quality are
both obtained by comparing perceptions with expectations.

 Satisfaction compares consumer perceptions with what

consumers would normally expect. Service quality compares
perceptions with what a customer should expect from a firm that
delivers high quality services.

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A frequently used measure of service quality is the SERVQUAL
scale. According to its developers SERVQUAL is a diagnostic tool
that uncovers was a firm’s broad weaknesses and strengths in the
area of service quality.

The five dimensions include tangibles, reliability, responsiveness

assurance and empathy. They provide the basic skeleton of service
quality.

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SERVQUAL instrument consists of two sections: First 22 item
section that records customer expectations of excellent firms in the
specific service industry, and Second 22 item section measures
consumer perceptions of particular company.

Results from the two sections are then compared to arrive at gap
scores for each of the five dimensions. Larger the gap, lesser is the
performance.

Measured on a seven-point Likert scale with anchor levels of

strongly agree and strongly disagree. SERVQUAL is a 44-item scale
regarding five service quality dimensions.

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 The Tangibles Dimension

Consumers often rely on tangible evidence. Tangibles dimension

compares consumer expectations with the firm’s performance
regarding the firm's ability to manage its tangibles.

A firm’s tangibles consist of variety of objects such as carpeting,

desks, lighting, wall colors, brochures, appearance of firm’s
personnel etc. Tangibles component focus on two dimensions: one
focusing on equipment and facilities, and another, focusing on
personnel and communications materials.

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 TANGIBLES EXPECTATIONS
 
E1. Excellent companies will have modern looking equipment.
E2. The physical facilities at excellent companies will be visually
appealing.

E3. Employees of excellent companies will be neat in appearance.

E4. Materials associated with the service (such as multimedia) will
be visually appealing.

 TANGIBLES PERCEPTIONS
 
P1 XYZ/BUP has modern looking equipment.
P2. XYZ’s physical facilities are visually appealing.

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P3. XYZ’s employees are neat in appearance.
P4. Materials associated with services are visually appealing at XYZ.

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 The Reliability Dimension
 
 Reliability dimension reflects the consistency and dependability
of a firm’s performance. Does the firm provide the same level of
service time, after time, or does quality vary with is encounter?
Does the firm keep its promises, bill its customers accurately and
perform the service correctly ?

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 RELIABILITY EXPECTATIONS
 
E5. When excellent companies promise to do something by a
certain time they will do so.
E6. When customers have a problem, excellent companies will
show a sincere interest in solving it.

E7. Excellent companies will perform the service right the first
time.
E8. Excellent companies will provide their services at the time they
promise to do so.
E9. Excellent companies will insist on error free records.

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 RELIABILITY PERCEPTIONS
 
P5. When XYZ Firm promises to do something by a certain time it
does so.
P6. When you have a problem, XYZ shows a sincere interest in
solving it.

P7. XYZ promises the service right the first time.

P8. XYZ provides it services at the time it promises to do so.
P9. XYZ insist on error free records.

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 Responsiveness Dimension
 
 Responsiveness reflects a service firm’s commitment to provide
it services in a timely manner. It concerns the willingness and/or
readiness of employees to provide a service.

 It reflects the preparedness of the firm to provide the service.

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 RESPONSIVENESS EXPECTATIONS
 
E10. Employees of excellent companies will tell customers
exactly when services will be performed.
E11. Employees of excellent companies will give prompt service
to customers.

E12. Employees of excellent companies will always be willing to

help customers.
E13. Employees of excellent companies will never be too busy to
respond to customer request.

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 RESPONSIVENESS PERCEPTIONS
 
P10. Employees of XYZ tell you exactly when service will be
performed.
P11. Employees of XYZ give you prompt service.

P12. Employees of XYZ are always willing to help you.

P13. Employees of XYZ are never too busy to respond to your
requests.

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 Assurance Dimension
 
 Assurance dimension addresses the competence of the firm.
Competence pertains to the firms knowledge and skill in
performing its service.

 Reflects politeness, friendliness, and consideration for the

customer’s property.

 Security reflects a customer’s feelings that he or she is free form

danger, risk, and doubt.

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 ASSURANCE EXPECTATIONS
 
E14. The behavior of employees of excellent companies will give
initial confidence in customers.
E15. Customers of excellent companies will feel safe in their
transaction.

E16. Employees of excellent companies will be consistently

courteous of customers.
E17. Employees of excellent companies will have the knowledge
to answer customers questions.

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 ASSURANCE PERCEPTIONS
 
P14. The behavior of employees of XYZ instills confidence in
customers.
P15. You feel safe in your transactions with XYZ.

P16. Employees of XYZ are consistently courteous to you.

P17. Employees of XYZ have the knowledge to answer your
questions.

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 Empathy Dimension
 
 Empathy is the ability to experience another’s feelings as one’s
own. Empathetic firms understand their customer needs and make
their services accessible to their customers.  

 In contrast firms that do not provide their customers

individualized attention when requested and that offer operating
hours convenient to the firm and not its customers fail to
demonstrate empathetic behaviors.

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EMPATHY EXPECTATIONS
 
E18. Excellent companies will give customers’ individual
attention.
E19. Excellent companies will have operating hours convenient
to all their customers.

E20. Excellent companies will have employees who give

customers personal attention.
E21. Excellent companies will have customer’s best interest at
heart.
E22. The employees of excellent companies will understand the
specific needs of their customers.

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EMPATHY PERCEPTIONS
 
P18. XYZ give you individual attention.
P19. XYZ has operating hours convenient to all its customers.

P20. XYZ has employees who give you personal attention.

P21. XYZ has your best interests at heart.
P22. Employees of XYZ understand your specific needs.

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 Criticisms of SERVQUAL
 
 Major criticisms of the instrument involve the length of the
questionnaire, the validity of the five service quality dimensions,
and the predictive/analytical power of the instrument in regard to
subsequent consumer purchases.

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 ANSWE
QUEST
and R
ION
Session

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THANK YOU VERY MUCH

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