16- Service Quality

Introduction:

Because of the fundamental distinction between service and goods, service marketers confront numerous obstacles.

• Understanding customer demands and service expectations;
• Tangibilizing the service offerings are just a few problems they face regularly.
• Dealing with a diverse range of people – both internal and external customers – as well as delivery challenges;
• Following through on promises made to customers.

The assessment and monitoring of quality, however, is the most exciting task. Some questions about service quality have yet to be answered definitively:

• How can service quality be defined and improved when the product is intangible and non-standardised?
• How can new services be adequately planned and evaluated when they are fundamentally intangible processes?
• How can the service company ensure that its communication is effective, consistent, and relevant, especially when its other marketing channels are also communicating? This concern is especially strong regarding the role of service providers in the transaction.

Service Quality:

Service businesses strive for comprehensive quality in their work. Complete quality marketing aims to achieve high performance the first time around. The entire organization should focus on creating positive consumer views of quality. Service companies can set targets for 100 percent performance right away. Unlike manufacturing companies, some service companies require 100 percent quality performance. In all its activities, an airport cannot accept anything short than perfect performance. Any failure, no matter where it occurs, can be disastrous.

Some ideas linked to service quality must be developed or respected by service firms. The following are some of the philosophies that produce a positive work environment.

Philosophies of Total Quality Services Marketing:

The following are the whole quality services marketing philosophies:

1. Quality must be perceived by Customers:

The service firm’s employees and customers participate in the service production. Both parties will perceive the quality of the service encounter. The service provider cannot claim quality performance if the employee is satisfied with the quality but the consumer is not. If the impressions are the opposite, the service firm’s problem is purely internal. It can educate employees to recognise the quality of client responses. Only the customer’s perception of quality should serve as a goal for service businesses.

2. Quality must be reflected in every Company Activity:

A customer who has reserved a hotel room for five days will engage with hundreds of people, from the gatekeeper to facilitating service performance, supporting service performance and consistency, co-customers, events, and so on. The sum of all of these events will help to shape a customer’s overall perception of quality. The basic service page’s excellent performance in some places, acceptable performance in others, and poor performance in others cannot contribute to customers’ good opinions. Every activity should be a reflection of high-level performance. As a result, rather than performing quality in bits and pieces, organisations should establish a holistic vision of the service product.

3. Quality requires Total Employees Commitment: 

Employees are a service company’s most valuable asset. Only humans can elicit varied feelings and experiences in customers at different times. Employees who are happy with their jobs demonstrate a sense of belonging to the company and are more involved in a variety of scenarios. Employee dedication is a must for service organisations who wish to assure total quality service marketing. Internal marketing must be run effectively to boost employee morale and drive them to provide better service.

4. Quality can always be improved:

Regarding services, there is no such thing as a quality ceiling. The possibility of future progress is always present. As a result, even if clients express happiness, service providers should not be satisfied with present quality performance criteria. For quality enhancement, ongoing research is required. Employees in service organisations should form quality circles and strategic groups to have a bank of ideas for future improvement. Minor changes can sometimes have a big impact on consumers’ perceptions of quality.

5. Improving quality standards does not cost more:

Top management of service organisations is frequently reluctant to improve quality standards because they believe it would cost more. They also believe that when allocating more time to each customer, the opportunity cost of employee time is essential. In the case of services, however, these perceptions are incorrect. Without spending more costs, the quality of service can be increased. Zero Investment Improvements (ZII) is a concept developed by Japanese companies. In an airline service office, for example, customer quality perceptions differ depending on whether no one notices his presence until he introduces himself, if someone recognises his presence, if someone greets him with a welcome wish, or if someone greets him with a wish smile and shake a hand, and so on. All of these performance improvements are free to the organisation, but they substantially impact quality perceptions. It is not always possible to improve quality at a higher expense. Yes, pricing is frequently associated with quality performance. However, the benefits would be significant both in the short and long term. Customers are lost as a result of poor quality on cost factors. As a result, businesses should focus their efforts on improving quality.

6. Quality Improvement Sometimes Requires Quantum Leaps:

Service companies should not be afraid to make significant changes to their organisational structure if these changes result in higher customer satisfaction. Top management of nationalised banks and insurance businesses pushed for computerization to provide consumers with quick and accurate services. Even though such a transformation involves billions of rupees in investment, causes substantial disruption in work for some time, staff dissatisfaction or adaptability, fear of retrenchment, and other issues, computerization was undertaken to improve customer service quality. Service businesses should be ready for such shifts at any moment.

7. Everyone contributes to Customer Perceived Quality:

All employees will improve the customer-perceived quality in the organisation. Whether an employee interacts with customers or not, whether in the line of sight or not, his contribution to quality perceptions will be present. When a customer is depositing money in a bank branch, and several staff who are not interacting with the customer disagree over some job-sharing issue, it will undoubtedly hurt the consumer, even though he had nothing to do with the occurrence. Furthermore, suppose a client is delayed by frontline employees owing to a delay in support services, even if the contact staff are pleasant. In that case, the consumer becomes unsatisfied after a certain amount of time has passed.

8. Quality should be monitored by the Employees themselves throughout the Organization:

In a university college, traditional control mechanisms can force a teacher to take courses on time and depart on time, but no one can force him to educate or train his students well. Only the teacher should become acquainted with the material. The presence of a head or principal to monitor the teaching could exacerbate the problem. As a result, service companies should have faith in their personnel and offer them methods that provide feedback on their performance. Employees aim to improve their performance based on feedback so customers receive a high-quality product.

Zero Defects vs. Zero Defections:

Ron Zemke has identified ten important differences in total quality marketing that service firms can identify when compared to manufacturing firms. The required shift in the philosophy of service firms against manufacturing firms:

	Zero Defects (Manufacturing  Firms)	Zero Defections (Service Firms)
1.	Technical  quality	Customer quality.
2.	Treating errors as mortal sins	Treating errors as opportunities to excel
3.	Precise standards and performance.	Transactions that delight customers.
4.	Minimizing the human element.	Capitalizing on the human element.
5.	Creating standards and protocols for every aspect of the transaction.	Standards for technical quality. Empowerment and recovery strategies for customer quality.
6.	No surprises standard operating procedures, rote and drill.	Speed, flexibility, ability to respond, and reliability for unique standards.
7.	Production  quality	Performance  quality
8.	Developing a satisfactory and mutually beneficial relationship	Building lasting, creative customer relationships.
9.	Customer satisfaction.	Customer retention.
10.	Reworking every policy and procedure to perfection, creating seamless performance.	Experimenting, leapfrogging the competition, taking measured risks and learning from them.

Manufacturing companies strive for zero defects as their quality goal. The product that does not meet the quality criteria will be rejected at the quality control locations. However, many industrial organisations have adopted the complete quality management approach, which states that there should be no defects in the performance and that the goal should be to attain 100 percent perfection the first time. Customers are offered promises first when it comes to services. A defection occurs when a service provider fails to deliver on its promises. As a result, service firms should strive for zero defections; Zemke’s suggested shift in perspective will undoubtedly bring more significant insights to service firms to assure comprehensive quality services marketing.

Research on Service Quality:

Service firms can obtain information on service quality through research. The following are some research methods that service firms might employ to obtain relevant information on general or specialised service quality issues.

• Regular customer surveys: In this strategy, customer surveys are conducted regularly. Regularly, either a census survey or a sample study will be done.
• Use of consumer panels: Consumer panels comprise selected customers from whom particular feedback will be sought. The committees will also be allowed to recommend various problems to the organisation for future improvement.
• Transactional analysis: Service organisations frequently deal with disgruntled customers. Through transactional analysis, real reasons for unhappiness can be traced, and important solutions can be provided. However, this strategy has a restricted utility for obtaining market intelligence because it can only engage with a few people. In the case of employees, this technique is quite helpful in identifying the causes of problems and taking steps to address them.
• Perception surveys: These surveys are used to learn about consumer views of various aspects of the service and the technical and functional quality of the service.
• Mystery shopping: Many service providers employ this strategy. The organization’s top management will personally visit service outlets and examine ongoing activity without exposing their names to customers or frontline personnel. They may interact with consumers and frontline personnel to learn about their experiences and problems and to make rapid improvements.
• Complaint analysis: Consumer complaints are service providers’ most common form of feedback. The complaints should be correctly categorised and forwarded to the appropriate persons at the appropriate time so that corrective action can be taken. The complainants should not be regarded solely as a source of compensation for service execution flaws. They should be used as a resource for discovering operational flaws. Correction should be institutionalised to ensure that such errors do not recur.
• Employee satisfaction research: Employee satisfaction levels should be tracked regularly. Employee research gives policymakers the knowledge they need to establish programmes and policies that keep employees happy all the time.
• Comparable Industry Studies: Studies undertaken by service providers in similar industries can also shed light on changing industry trends.
• Intermediary research: Service quality research is also conducted by some social organisations, research institutes, universities, trade groups, and other organisations. The findings of such research studies benefit service businesses by gathering market information on service quality.

Service Quality Issues:

Quality is “the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs.”

Defining quality in service:  The degree of conformity between declared goals and realised targets describes quality in manufacturing. As a result, measuring and adhering to a standard is rather simple. It is challenging to appreciate and measure quality in the service industry. This is due to the mother of all service qualities, the intangibility factor, which makes measuring and assessing service quality extremely difficult. All stakeholders involved in the service delivery process, including service providers, customers, and suppliers, have an opinion on service quality. As a result, they should be aware of each other’s notions of service excellence.

Quality can be viewed from a variety of perspectives:

• Product-based:

The definition is based on variables that can be measured. This is fine for commodities, but it’s problematic with services. The number of times a phone rings before a service provider picks up the receiver can be used to gauge responsiveness. For instance, Domino’s Pizza has effectively positioned itself as a company that promises to deliver its food in half an hour—in other words, it provides quantifiable quality requirements.

• User-based:

This definition is written from the client’s standpoint, confirming that “quality is in the eye of the beholder.” For example, if the students cannot understand the accent or the delivery is dull, an exceptionally well-read professor who follows all teaching criteria may be given a “poor” rating.

This aspect of subjectivity poses a problem: how to figure out:

• The customer’s expectations,
• Which characteristics should be provided to appeal to the broadest range of customers and
• How can we distinguish between satisfying features and those that signal quality?
• Where product-based quality definition ends, our method begins.
• Manufacturing-based:

This is based on compliance, and quality is seen as a result of the manufacturing process. If the output meets the design standards, it is deemed high quality. This is a factor that the service company can influence, but it ignores user happiness.

• Value-based:

This definition equates to quality and value. The service provider must balance conformity and performance, weighing benefits and price in the context of client happiness.

• Transcendental:

Quality can only be felt, not explained or documented, making it difficult for quality managers to manage. Tourism is one of those areas where, to some extent, quality can only be felt firsthand.

There are two perspectives on service quality (internal and external to the service firm):

Internal quality concerns the complete service delivery process, from conception to encounter, experience, transaction, and consumption. Internal quality concerns conformance to design standards, whereas external quality concerns the customer’s perception. While the service provider can manage the former, service quality is determined by how customers perceive it and should be measured accordingly. When any service quality evaluation is dependent on the manager’s perception of the customer’s expectations, all features of “marketing myopia” rear their ugly heads once more:

• Service providers may be unaware of the criteria used in service consumption decision-making.
• Management may have a blind spot regarding how customers judge the performance of competing products.
• Marketing myopia could set in, blinding management to customers’ changing needs. Market and environmental conditions, competitive responses, and technological advancements could all play a role in requirement development.

Service Quality Models:

There are various models of service quality, which are as follows:

I. The Gap Model:

Effective service marketing is a complex undertaking involving many strategies, skills and tasks. Executed of service organisations have long been confused about how to approach this complicated topic in an organised manner. The Gap model of service quality positions the key concepts, strategies and decisions in service marketing and will be used to guide the structure of the services.

-The Customer Gap:

The customer gap is the difference between customer expectations and perceptions. Customer expectations are Standards or reference points that customers bring into the service experience. Customer perceptions are subjective assessments of actual service experiences. Customer expectation often consists of what a customer believes should or what will happen. For example, a visit to an expensive restaurant creates a higher level of expectation for service than a visit to a fast food restaurant. Closing the gap between what customers expect and perceive is critical to delivering quality service. It forms a basis for the gap model.

Because customer satisfaction and customer focus are so critical to the competitiveness of firms, any company interested in delivering quality service must begin with a clear understanding of its customers.

– The provider Gaps:

The gaps model suggests that mother gas (the provider gaps) need to be closed to close all the important customer gaps. The organisation providing the service is termed as provider gap and includes:

– Gap 1: The Listening gap

– Gap 2: The service Design and Standards gap

– Gap 3: The service performance gap

– Gap 4: The communication gap

Let us understand in detail:

– Gap 1: The Listening gap

It is the Difference between customer Expectations of service and the company’s understanding of those expectations. The primary cause of many firms not meeting customer expectations is that the firm lacks an accurate understanding of exactly what those expectations are. Many reasons exist for managers not to be aware of what customers expect, such as:

1. They may not interact directly with customers.
2. They may be unwilling to ask about expectations.
3. They may be unprepared to address them.

When people with the authority and responsibility for setting priorities do not fully understand customer service expectations, they may trigger a chain of bad decisions and sub-optimal resource allocation, resulting in perceptions of poor service quality. This gap is large when management employees do not require accurate information about customer expectations. Another key factor related to listening is the lack of upward communication. Listening also occurs due to a lack of relationship marketing and service recovery.

– Gap 2: The service Design and Standards gap

An accurate perception of customers’ expectations and accessories is insufficient to deliver superior service. Another prerequisite is the presence of service design and performance standards that reflect those accurate perceptions. Gap 2 The service design and standard gap exist in the service organisation for a variety of reasons such as:

1. People setting the standards (management) sometimes believe that customer Expectations are reasonable and realistic.
2. They may also believe that the degree of variability in service defines standardization, and therefore, setting standards will not achieve the desired goal.
3. Because service is intangible, they are difficult to describe and communicate.

There are various ways to avoid Gap 2:

– to design service without oversimplification, incompleteness, subjectivity and bias.

– blueprinting of services.

– develop standards properly.

– The focus was made on physical evidence of servicescape.

-Gap 3: The service performance gap

Gap 3 is the discrepancy between the development of customer-driven service standards and actual service performance by the company’s employees. Even when guidelines exist for performing services well and treating customers correctly, high-quality service is not specific. Standards must be backed by corporate resources(people, systems, technology), and B was forced to be effective. When the level of Service Delivery falls short of the standard, it also falls short of what customers expect.

The gap can be narrowed by ensuring all the resources needed to achieve the standards are in place. Research has identified many critical inhibitors to closing the service performance gap.

The factors include:

1. Employees:

who do not clearly understand the roles they are to play in the company. who experience conflict between customers and the Company, management, employee selection, inadequate Technology, inappropriate compensation and recognition, and lack of empowerment and teamwork. This involves internal practices search such as recruitment, training, feedback, job design, motivation, and organizational structure for delivering better services.

2. Customer:

Lack of cooperation for customers negatively influences the quality of service and does not perform them appropriately.

3. Intermediaries (retailers, franchisees, agents, brokers):

Most service companies face an even more formidable task of attaining service excellence and consistency in the presence of intermediaries who interact with the customers yet are not under the direct control of the service provider. Another issue, along with the service performance gap, is the need for service firms to synchronize demand and capacity.

–Gap 4: The communication gap

Gap 4 illustrates the difference between service delivery and the provider’s external communication. The service company makes promises through its media advertising, salesforce, etc. May raise customer’s expectations. The discrepancy between the actual promise made and the service provided can widen the customer gap. Broken Promises can occur for many reasons, such as:

– over-promising in advertising and personal selling.

– inadequate coordination between operations and marketing.

– differences in policies and procedures across service outlets.

– Failing to educate customers on how to use service appropriately.

Interactive marketing must be coordinated with the conventional types of external marketing used in product and service firms. Effectively coordinating actual Service Delivery external communications narrows the communication gap and favourably affects the customer gap.

Another issue in gap 4 is associated with the pricing of services. In the case of packaged goods, customers possess enough price knowledge before purchase to judge whether the price is fair or in line with competition. With services, customers have no internal reference points for price before purchase and consumption. Techniques for developing prices for services are more complicated than those for pricing tangible goods.

Putting it all together: Closing the gaps

The full conceptual model conveys that the key to closing the customer gap is to close providers’ gaps 1, 2, 3, and 4 and keep them closed. The gap model of service quality serves as a framework for service organisations to improve quality service and service marketing.

The Gap Model positions the key concepts, strategies, and decisions in service marketing in a manner that begins with the customer and builds the organisation’s tasks around what is needed to close the gap between customer expectations and perceptions.

II. Service Triangle Management Model:

A revolution in the service industry is taking place, 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. The Industrial Management Model is an approach to organizing a firm that focuses on revenues and operating costs and ignores personnel’s role in generating customer satisfaction and sustainable profits.

The model is a hangover of manufacturing methods but, sadly, is still employed by many organisations. Firms that follow this model fully believe that the factors that bring in revenue are advertising, sales promotion, accessibility, distribution, and locational advantages. They are of the opinion that the cost drivers are personnel and operations and that these should be controlled. Even service sectors that seek price-competitive advantages follow this model.

Organizations following the industrial model believe that employees are indifferent, not very skilled, do not have the right attitude and motivation, and cannot be empowered for complex tasks. They would prefer to depend on automation and technology. Therefore, there is greater dependence on senior personnel and less on frontline personnel.

• The Market-focused Management Model:

This is the model that service firms can use as a replacement to meet the changes in the new environment for survival. The Market-focused Management Model focuses on the components of the firm that facilitate the firm’s service delivery system. It proposes that the firm should support and interact with the personnel who serve the customers. In other words, there is more emphasis by the organisation on employees on the front line. The support includes equipment, office space (hygiene factors), moral support, motivation initiatives, career growth and money.

If a service-oriented firm decides to follow this model, then customer interaction or service delivery becomes the most important part of their strategy, and the frontline personnel become their most important tool. This model is based on the Service Triangle framework.

The service triangle framework depicts the relationships among three groups of the service organisation:

• The service strategy,
• Systems embedded in the organisation and
• The people of the organisation.

The customer is at the centre, interacting with each of the groups.

The framework has the following six relationships:

1. The service firm’s strategy must be communicated to its consumers: This would apprise the consumer about its service product and distinguishing features and its commitment to delivery.
2. The service strategy also needs to be communicated to the firm’s employees: This would ensure transparency, eliminate misunderstandings, and aid in the sincerity of commitment that percolates the management levels.
3. There should be consistency in the service strategy: There should be consistency in the service strategy and the systems developed to run the day-to-day operations to achieve the strategic goal. Systems would be designed only after the service strategy becomes apparent and agreed upon. The systems would then greatly aid the service transactions/encounters. This would significantly affect the customers’ feelings, which would lead to their satisfaction.
4. The impact of organisational systems on customers: This would, in turn, greatly influence their service experience.
5. The importance of organisational systems and employee efforts: Rules and regulations should aid an employee in giving of his best, not hinder him in his service transactions.
6. The interaction between the customer and service provider gives rise to service encounters or critical incidents. They are also called Moments of Truth (MOT). The quality of these interactions is the source of customer satisfaction.

III. Service Triangle Marketing Model:

Services marketing is a game of “promises” between three parties involved in the service transaction. In a service transaction, there are three parties involved:

• The Company:

This organisation has dreamed up the service product and its various benefits. It offers the service product to the customer to achieve its service goals to the customers.

• The Customer:

The customer wants his needs and desires satisfied, and he will do so by consuming the service product.

• The Provider:

They are the internal customers of an organisation who invariably complete the service transaction on behalf of the company. They are primarily employees, including franchisees, channel partners, distributors, wholesalers, retailers, etc.

Three different types of marketing take place during the service transaction amongst the three entities:

• External Marketing: The company” externally markets” to the customer. It promises benefits, explains features, and assures satisfaction through advertising, public relations exercises, and other forms of corporate communication. It uses mass media to convey its promises. It “makes promises” to the customers.
• Internal Marketing: The Company does internal marketing to its providers. It has to provide working space, such as offices, and equipment, such as computers and telephones. It also has to recruit, select, and train appropriate employees, channel partners, and franchisees. It enables the providers to complete the service transaction. The company “enables its promises.”
• Interactive Marketing: The providers do interactive marketing with the customer. The provider interacts with the customers. The provider is the face of the company and represents the company. The customer and provider get instant feedback about each other during a service transaction. Their transaction reflects the perception of the quality of the service. The provider “keeps the promises” the company makes to the customers.

IV. SERVQUAL Model:

Zeithaml, Parasuraman, and Berry developed the SERVQUAL Model, an empiric model that compares service quality performance with customer service quality needs. It is used to do a gap analysis of an organization’s service quality performance against its customers’ service quality needs.

SERVQUAL is a multi-dimensional research instrument designed to capture consumer expectations and perceptions of a service along five dimensions that are believed to represent service quality. SERVQUAL is built on the expectancy-disconfirmation paradigm, which means that service quality is understood as the extent to which consumers’ pre-consumption expectations of quality are confirmed or disconfirmed by their actual perceptions of the service experience. When the SERVQUAL questionnaire was first published in 1985 by a team of academic researchers, A. Parasuraman, Valarie Zeithaml and Leonard L. Berry, to measure quality in the service sector, it represented a breakthrough in the measurement methods used for service quality research. The diagnostic value of the instrument is supported by the model of service quality, which forms the conceptual framework for the development of the scale (i.e. instrument or questionnaire). The instrument is relatively robust and widely applied in various contexts and cultural settings. It has become the dominant measurement scale in the area of service quality. Despite the long-standing interest in SERVQUAL and its myriad of context-specific applications, it has attracted some criticism from researchers.

This method says that customer service expectations can be measured along a few factors.

Dimensions of Service Quality:

1. David A. Garvin: Eight dimensions of quality were identified by Garvin:

1. Performance: Every product is supposed to deliver benefits, and the measure of its quality is the offer’s performance. A dish scourer, which can clean plates entirely and quickly, would be a performance measure.
2. Features: These are in addition to the core product, which does not come as standard ‘features’, like add-ons.
3. Reliability: This measures the degree of probability of the product delivering what had been promised.
4. Conformance: Delivery quality meeting design standards.
5. Durability measures the length of time a product can deliver benefits without deteriorating.
6. Serviceability: If the product can be repaired easily and quickly, then it is a measure of quality. This could include the behavioural dimension of service personnel, like their politeness.
7. Aesthetics: This measures the product’s looks, design, touch and feel.
8. Perceived quality: Consumers develop a perception due to company-controlled stimuli like advertising, publicity and brand promotion, and social effects like word-of-mouth.

 

2. A Parasuraman et al.: Parasuraman, Valerie Zeithaml and Leonard Berry identified five dimensions with which consumers judge services.

1. Reliability: The service should be performed with dependability and as per its promise.
2. Responsiveness: This concerns the service provider’s attitude toward providing service. It also includes their sensitivity and timeliness in responding to customer requests.
3. Assurance: This relates to the knowledge, skill, and competence of the service providers. It also indicates their ability to generate trust and faith and their capability in service delivery with politeness and consideration.
4. Empathy: This dimension relates to caring, feeling, and the ability to provide personalised service.
5. Tangibles: This is a measure of the effectiveness of the service provider’s physical evidence, such as design layout and facilities.

Importance of Quality:

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

• Lower Costs: Higher quality services imply fewer mistakes for repeat tasks, service recovery exercises, or refunds to disgruntled customers. Preventive and corrective measures through quality control processes lower costs and increase 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 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, which drives loyalty and enhanced profits.
• Higher Market Share: Loyal customers contribute to positive word-of-mouth publicity (the ‘buzz effect’), which broadens the customer base with minimal costs.
• Loyal Internal Customers: The previous unit explored the linear relationship between happy employees, 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 levels lower manpower and training costs, and the service firm can leverage the knowledge and skills of its employees.
• Higher RoI: The service-profit chain established in the previous unit that high-quality services contribute to higher profitability.