Quality

Quality is the ability of a

product or service to
consistently meet or exceed
customer expectation.
Relationship between
Quality, Market Share, and ROI
 Higher quality yields a higher return-on-
investment (ROI) for any given market share
 Quality also pays in the form of customer
retention – customer defections represent a
significant cost to companies
 Adopting quality principles strongly
correlates to corporate stock and earnings
appreciation
Service Quality
 Customers also form perceptions of quality
during the service transaction - how effectively
and efficiently the service was delivered and the
speed and convenience of completing the
transaction.
 Finally, customers evaluate support activities
that occur after the transaction, that is post-sale
services
Definitions of Service Quality

Service quality can also be defined according

to both the what and how a product or
service is delivered.
■ Gronroos distinguishes between “technical
quality” and “functional quality”.
■ Technical Quality is concerned with the
outcome of the delivered product or service.
Definitions of Service Quality – cont.
Customers use service quality attributes such as
reliability, competence, performance,
durability, etc. to evaluate technical quality.
■Functional Quality has more to do with how
the technical quality is transferred to the
consumer. Service quality attributes such as
responsiveness and access would be
important in helping the customer judge the
functional quality of the service encounter.
Cardinal Principles of Service Quality
 Listening precedes action
 Reliability is key
 Flawless execution of the “basics”
 Pay attention to service design
 Perform service recovery well
 Surprise customers
 Practice “fair play”
 Promote teamwork
 Internal service begets/causes
external service
Adapted from Zemke, Ron (2002)
Consumer Evaluation Processes for Services
 Search Qualities
 attributes a consumer can determine prior to
purchase of a product
 Experience Qualities
 attributes a consumer can determine after
purchase (or during consumption) of a product
 Credence Qualities
 characteristics that may be impossible to
evaluate even after purchase and consumption
Service Quality Challenges
 Defining quality for services is more
difficult than for products because of the
intangible, variable nature of service
characteristics.

■ Unlike product quality, consumers

frequently lack the necessary information
to evaluate service quality. cont.
Service Quality Challenges – cont.
Quality Perceptions
■ Search quality and experience quality are
more applicable to determining product
quality
■ However, with services consumers are usually
limited to using credence quality to evaluate
the experience, relying solely on the overall
credibility of the service provider
Service Continuum
☛Another challenge presented in assessing
service quality arises when viewing services
along a continuum ranging from pre-sale to
post-sale activities
Dimensions of Service Quality
 Reliability: Perform promised service dependably and
accurately. Example: receive mail at same time each day.
 Responsiveness: Willingness to help customers promptly.
Example: avoid keeping customers waiting for no apparent
reason.
 Assurance: Ability to convey trust and confidence. Example:
being polite and showing respect for customer.
 Empathy: Ability to be approachable. Example: being a good
listener.
 Tangibles: Physical facilities and facilitating goods. Example:
cleanliness.
SERVICE QUALITY DIMENSIONS-
THE ERRATa

EMPATHY S
RELIABILITY E
E
RESPONSIVENESS
C R
ASSURANCE
I V
TaNGIBLES
 Definitions of the SERVQUAL Dimensions

 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.

 Assurance: Knowledge and courtesy of employees and their ability

to inspire trust and confidence.

 Empathy: Caring, individualized attention the firm provides its

customers.

© A. Parasuraman, University of Miami; not to be reproduced or disseminated without the author’s permission 22
ServQual dimensions
Get it right
 Reliability the first time!
 dependability
 delivering on promises
 accuracy
 consistency
 Responsiveness
 promptness
 helpfulness
and on time!
 Assurance
 competence
 courtesy I feel
safe
 credibility
 security
 Empathy
 easy access
 good communication
 customer understanding
They listen
 personalised attention to me
 Tangibles
 physical evidence People look
smart
Objectives
The Gaps Model of Service Quality
 Introduce a framework, called the gaps model of service quality,
which is used to organize this textbook.
 Demonstrate that the gaps model is a useful framework for
understanding service quality in an organization.
 Demonstrate that the most critical service quality gap to close is
the customer gap, the difference between customer expectations
and perceptions.
 Show that four gaps that occur in companies, which we call
provider gaps, are responsible for the customer gap.
 Identify the factors responsible for each of the four provider gaps.
Gaps Model of Service Quality

CUSTOMER

Expected Service

Customer
Gap Perceived
Service

External
COMPANY Service Delivery Communications
GAP 4 to Customers
GAP 1 GAP 3
Customer-Driven Service
Designs and Standards

GAP 2
Part 1 Opener Company Perceptions of
Consumer Expectations
The Gaps Model of Service Quality
 The Customer Gap
 The Provider Gaps:
 Gap 1 – not knowing what customers expect
 Gap 2 – not having the right service designs and standards
 Gap 3 – not delivering to service standards
 Gap 4 – not matching performance to promises
 Putting It All Together: Closing the Gaps
WHAT’S GAP MODEL ABOUT?

 That there exists gaps in what is expected

and what is delivered and that it alters the
perceptions, both for the Customer and the
Provider
 As the aim of the Service Marketers’ is to
close the customer gap they need to know the
Consumer Behavior
The Customer Gap
Expected
service

Customer Gap

Perceived
service
CE AND CP
CE: The Reference Points Customers
Have When They Plan To Utilize or
Enter Into a Service.
CP: The Perceptions formed as the
customers receive the actual Service.
THE GLARING GAP
THE ORIGINAL GAP IS

THE CUSTOMER GAP

The gap between Customer
Expectations (CE) and Customer
Perception (CP)
 THE OTHER GAPS
These are called the Provider Gaps, as they pertain to
the SBU, which tries to close the Customer Gap
 Gap1 Not Knowing What Customers Want
 Gap 2 Not Selecting the Right Service
Designs and Standards
 Gap 3 Not Delivering to Standards
 Gap 4 Not Matching Performance to
Promises
 Gaps Model of Service Quality
 Customer Gap:
 difference between customer expectations and perceptions
 Provider Gap 1 (The Knowledge Gap):
 not knowing what customers expect
 Provider Gap 2 (The Service Design & Standards Gap):
 not having the right service designs and standards
 Provider Gap 3 (The Service Performance Gap):
 not delivering to service standards
 Provider Gap 4 (The Communication Gap):
 not matching performance to promises
Key Factors Leading to the Customer Gap

Customer
Customer Expectations
Gap

 Provider Gap 1: Not knowing what customers expect

 Provider Gap 2: Not selecting the right service designs and standards

 Provider Gap 3: Not delivering to service standards

 Provider Gap 4: Not matching performance to promises

Customer
Perceptions
Key Factors Leading to Provider Gap 1
Customer Expectations
 Inadequate marketing research orientation
Insufficient marketing research
Research not focused on service quality
Inadequate use of market research

G  Lack of upward communication

Lack of interaction between management and customers
Insufficient communication between contact employees and managers
A Too many layers between contact personnel and top management
 Insufficient relationship focus
P Lack of market segmentation
Focus on transactions rather than relationships

1 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 mechanisms in place for service failures

Company Perceptions of
Customer Expectations
Strategies to overcome Gap 1
 Communicate with the customers about
what they expect.
 Conduct Market research to learn what
customers expect.
 Encourage Upward Communication.
 Decrease the number of layers of
management.
Key Factors Leading to Provider Gap 2
Customer-Driven Service
Designs and Standards
 Poor service design
Unsystematic new service development process
Vague, undefined service designs
Failure to connect service design to service positioning
G  Absence of customer-driven standards
Lack of customer-driven service standards
A Absence of process management to focus on customer
requirements

P Absence of formal process for setting service quality goals

 Inappropriate physical evidence and servicescape
Failure to develop tangibles in line with customer expectations
2 Servicescape design that does not meet customer and
employee needs
Inadequate maintenance and updating of the servicescape

Management Perceptions
of Customer Expectations
Strategies to overcome GAP 2
Customer-Driven
Service Designs & Standards
• Top management commitment to
providing service quality
• Develop Service Quality goals.
• Standardization of tasks.
Management Perceptions
of Customer Expectations

“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

Key Factors Leading to Provider Gap 3
Customer-Driven Service
Designs and Standards
 Deficiencies in human resource policies
Ineffective recruitment
Role ambiguity and role conflict
Poor employee-technology job fit
Inappropriate evaluation and compensation systems
G Lack of empowerment, perceived control, and teamwork
 Customers who do not fulfill roles
A Customers who lack knowledge of their roles and responsibilities
Customers who negatively impact each other

P  Problems with service intermediaries

Channel conflict over objectives and performance
Difficulty controlling quality and consistency
3 Tension between empowerment and control
 Failure to match supply and demand
Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Overreliance on price to smooth demand

Service Delivery
Strategies to reduce Gap 3
Service Delivery
• Enhance Teamwork among the employees
• Ensure there is good employee-job fit.
• Ensure there is technology job – fit.
•Provide employees some control on how
they can perform the service and power to
modify the service to meet customer
requests.
• Develop a supervisory control system that
reward employees.
• Reduce employee Role-Conflict and Role-
ambiguity. Customer-Driven
Service Designs & Standards
Key Factors Leading to Provider Gap 4
Service Delivery
 Lack of integrated services marketing communications
Tendency to view each external communication as independent
Not including interactive marketing in communications plan
G Absence of strong internal marketing program
 Ineffective management of customer expectations

A Absence of customer expectation management through all forms of

communication
Lack of adequate education for customers
P  Overpromising
Overpromising in advertising
4 Overpromising in personal selling
Overpromising through physical evidence cues
 Inadequate horizontal communications
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches or units

External Communications to
Customers
Closing gap 4: Ensure that service
delivery matches promises
 Seek input from operations personnel on what
can be done
 ‘Reality’ advertising
 real employees, real customers, real situations
 Seek input from employees on advertising
 Gain communications between sales, operations
and customers
 Ensure consistent standards in multi-site
operations
 In advertising, focus on service Why do we
characteristics that are always have
to wait?
important to customers
 Manage customer’s
expectations
 What are realistic expectations?
 Explain industry realities
Gaps Model of Service Quality
Expected Service
CUSTOMER Customer Gap

Perceived
Service

External
COMPANY Service Communications to
Delivery Gap 4 Customers
Gap 3
Customer-Driven
Gap 1 Service Designs and
Standards
Gap 2
Company Perceptions of
Consumer Expectations
Closing the gaps
 Gap 1: Learn what customers expect
 Gap 2: Establish the right service quality
standards
 Gap 3: Ensure that service performance
meets standards
 Gap 4: Ensure that delivery matches
promises
Statements of the SERVQUAL instrument
This survey deals with your opinions of hospitals. Please show the extent to which you think a
Hospital should posses the following features.
What we are interested in here is a number that best shows your expectations about
Hospital/school/college offering health/education services.

Strongly Disagree Moderately Neutral Moderately Agree Strongly

Disagree Disagree Agree Agree

1 2 3 4 5 6 7
E1. They should have up-to-date equipment.
E2. Their physical facilities should be visually appealing.
E3. Their employees should be well dressed and appear neat.
E4. The appearance of the physical facilities of these firms should be in keeping with the type of
services provided.
E5. When these firms promise to do something by a certain time, they should do so.
E6. When customers have problems, these firms should be sympathetic and reassuring.
E7. These firms should be dependable.
E8. They should provide their services at the time they promise to do so.
E9. They should keep their records accurately.
E10. They shouldn't be expected to tell customers exactly when services will be performed. (-)
E11. It is not realistic for customers to expect prompt service from employees of these firms. (-)
E12. Their employees don't always have to be willing to help customers. (-)
E13. It is okay if they are too busy to respond to customer requests promptly. (-)
E14. Customers should be able to trust employees of these firms.
E15. Customers should be able to feel safe in their transactions with these firms' employees.
E16. Their employees should be polite.
E17. Their employees should get adequate support from these firms to do their jobs well.
E18. These firms should not be expected to give customers individual attention. (-)
E19.Employees of these firms cannot be expected to give customers personal attention. (-)
E20. It is unrealistic to expect employees to know what the needs of their customers are. (-)
E21. It is unrealistic to expect these firms to have their customers' best interests at heart. (-)
E22. They shouldn't be expected to have operating hours convenient to all their customers. (-)
The following set of statements relate to your feelings about hospital service .
For each statement, please show the extent to which you believe that this hospital has the
feature described by the statement.
Once again, 7 means that you strongly agree that your hospital has that feature,
and 1 means that you strongly disagree. There is no right or wrong answers.
All we are interested in is a number that best shows your perceptions about the
hospital/School /College chosen by you.

Strongly Disagree Moderately Neutral Moderately Agree Strongly

Disagree Disagree Agree Agree

1 2 3 4 5 6 7
P1. XYZ has up-to-date equipment.
P2. XYZ's physical facilities are visually appealing.
P3. XYZ's employees are well dressed and appear neat.
P4. The appearance of the physical facilities of XYZ is in keeping with the type of services
provided.
P5. When XYZ promises to do something by a certain time, it does so.
P6. When you have problems, XYZ is sympathetic and reassuring.
P7. XYZ is dependable.
P8. XYZ provides its services at the time it promises to do so.
P9. XYZ keeps its records accurately.
P10. XYZ does not tell customers exactly when services will be performed. (-)
P11. You do not receive prompt service from XYZ's employees. (-)
P12. Employees of XYZ are not always willing to help customers. (-)
P13. Employees of XYZ are too busy to respond to customer requests promptly. (-)
P14. You can trust employees of XYZ.
P15. You feel safe in your transactions with XYZ's employees.
P16. Employees of XYZ arc polite.
P17. Employees get adequate support from XYZ to do their jobs well.
P18. XYZ does not give you individual attention. (-)
P19. Employees of XYZ do not give you personal attention. (-)
P20. Employees of XYZ do not know what your needs are. (-)
P21. XYZ does not have your best interests at heart. (-)
P22. XYZ does not have operating hours convenient to all their customers. (-)
A multidimensional Scale to Capture Customer Perceptions &
Expectations (GAP-5) of SQ
Company/organization_________________

I. Customer Expectations

Tangibles Dimension of SQ
Strongly Agree Strongly
E1. They should have up-to-date Disagree Agree
equipment. 1 2 3 4 5 6 7 8 9

E2. Their physical facilities should 1 2 3 4 5 6 7 8 9

be visually appealing.
E3. Their employees should be well 1 2 3 4 5 6 7 8 9
dressed and appear neat.
E4. The appearance of the physical 1 2 3 4 5 6 7 8 9
facilities of these firms should be in
keeping with the type of services
provided.
 Reliability Dimension of SQ
Strongly Agree Strongly
E5. When these firms promise to do Disagree Agree
something by a certain time, they 1 2 3 4 5 6 7 8 9
should do so.

E6. When customers have problems, 1 2 3 4 5 6 7 8 9

these firms should be sympathetic
and reassuring.
E7. These firms should be 1 2 3 4 5 6 7 8 9
dependable.
E8. They should provide their 1 2 3 4 5 6 7 8 9
services at the time they promise to
do so.
E9. They should keep their records 1 2 3 4 5 6 7 8 9
accurately.
 Responsiveness Dimension of SQ
Strongly Agree Strongly
E10. They shouldn't be expected to tell Disagree Agree
customers exactly when services will 1 2 3 4 5 6 7 8 9
be performed. (-)
E11. It is not realistic for customers to 1 2 3 4 5 6 7 8 9
expect prompt service from employees
of these firms. (-)
E12. Their employees don't always 1 2 3 4 5 6 7 8 9
have to be willing to help customers.
(-)
E13. It is okay if they are too busy to 1 2 3 4 5 6 7 8 9
respond to customer requests
promptly. (-)
 Assurance Dimension of SQ
Strongly Agree Strongly
E14. Customers should be able to Disagree Agree
trust employees of these firms. 1 2 3 4 5 6 7 8 9
E15. Customers should be able to 1 2 3 4 5 6 7 8 9
feel safe in their transactions with
these firms' employees.
E16. Their employees should be 1 2 3 4 5 6 7 8 9
polite.
E17. Their employees should get 1 2 3 4 5 6 7 8 9
adequate support from these firms
to do their jobs well.
 Empathy Dimension of SQ
Strongly Agree Strongly
E18. These firms should not be Disagree Agree
expected to give customers 1 2 3 4 5 6 7 8 9
individual attention. (-)
E19.Employees of these firms cannot 1 2 3 4 5 6 7 8 9
be expected to give customers
personal attention. (-)
E20. It is unrealistic to expect 1 2 3 4 5 6 7 8 9
employees to know what the needs of
their customers are. (-)
E21. It is unrealistic to expect these 1 2 3 4 5 6 7 8 9
firms to have their customers' best
interests at heart. (-)
E22. They shouldn't be expected to 1 2 3 4 5 6 7 8 9
have operating hours convenient to
all their customers. (-)
 II. Customer Perceptions
Tangibles Dimension of SQ
Strongly Agree Strongly
P1. XYZ has up-to-date equipment. Disagree Agree
1 2 3 4 5 6 7 8 9

P2. XYZ's physical facilities are 1 2 3 4 5 6 7 8 9

visually appealing.

P3. XYZ's employees are well 1 2 3 4 5 6 7 8 9

dressed and appear neat.

P4. The appearance of the physical 1 2 3 4 5 6 7 8 9

facilities of XYZ is in keeping with
the type of services provided.
12/08/21 69
 Reliability Dimension of SQ
P5. When XYZ promises to do 1 2 3 4 5 6 7 8 9
something by a certain time, it
does so.
P6. When you have problems, 1 2 3 4 5 6 7 8 9
XYZ is sympathetic and
reassuring.
P7. XYZ is dependable. 1 2 3 4 5 6 7 8 9
P8. XYZ provides its services at 1 2 3 4 5 6 7 8 9
the time it promises to do so.
P9. XYZ keeps its records 1 2 3 4 5 6 7 8 9
accurately.
 Responsiveness Dimension of SQ
P10. XYZ does not tell 1 2 3 4 5 6 7 8 9
customers exactly when services
will be performed. (-)
P11. You do not receive prompt 1 2 3 4 5 6 7 8 9
service from XYZ's employees.
(-)
P12. Employees of XYZ are not 1 2 3 4 5 6 7 8 9
always willing to help
customers. (-)
P13. Employees of XYZ are too 1 2 3 4 5 6 7 8 9
busy to respond to customer
requests promptly. (-)
 Assurance Dimension of SQ
P14. You can trust employees of 1 2 3 4 5 6 7 8 9
XYZ.

P15. You feel safe in your 1 2 3 4 5 6 7 8 9

transactions with XYZ's
employees.
P16. Employees of XYZ arc 1 2 3 4 5 6 7 8 9
polite.
P17. Employees get adequate 1 2 3 4 5 6 7 8 9
support from XYZ to do their
jobs well.
 Empathy Dimension of SQ
P18. XYZ does not give you 1 2 3 4 5 6 7 8 9
individual attention. (-)

P19. Employees of XYZ do not 1 2 3 4 5 6 7 8 9

give you personal attention. (-)
P20. Employees of XYZ do not 1 2 3 4 5 6 7 8 9
know what your needs are. (-)
P21. XYZ does not have your 1 2 3 4 5 6 7 8 9
best interests at heart. (-)
P22. XYZ does not have 1 2 3 4 5 6 7 8 9
operating hours convenient to
all their customers. (-)
Instructions to use SQ model
1. The questions marked with(-) should be reverse coded that is ,
1=7,2=6,3=5,4=4, 5=3,6=2, 7=1.
2. Add the scores for each of the following variables:
Tangibles 1to 4
Reliability 5to9
Responsiveness 10to13
Assurance 14to17
Empathy 18-22
Subtract the score P-E (Q1ofP-Q1ofE)
Results: Tangibles (score for this dimension)
Reliability (score for this dimension)
Responsiveness (score for this dimension)
Assurance (score for this dimension)
Empathy (score for this dimension)
 Measuring service quality:
SERVQUAL Model
(Parasuraman, Zeithaml & Berry 1985, 1988)
Reliability
Reliability

Responsiveness
Responsiveness

Service
Service
Assurance
Assurance
Quality
Quality
Empathy
Empathy

Tangibles
Tangibles
HSBC's Mortgage Service Offering
Secondary Service
Features : Accessibility :
term of the loan, Mortgage advisors during
type of loan, office hours. Mortgage
interest rate option. Service Centre via telephone
Tangibles : during office hours and Saturday mornings.
marketing literature
mortgage deeds. Processes :
Core Service Flowcharts signed by
Packaging : The Provision of customers and advisors
payment protection plans Mortgages to show understanding
. of process
and choices made.

Quality : Branding :
Calls monitored for HSBC logo
quality purposes. Branded products
e.g. HSBC HomeStart.
Shostack's Molecular Model of Service Components to
the Output of a Bank

Explanation Marketing
Literature The Bank
Guidance
Building
Advice
Core service Layout of Bank
An Appt Feeling of
with the Privacy & Trust
Mortgage
Credit Checks
Advisor
&
Product
Method of Booking Refreshments
Delivery

Sophisticated How/whether they

IT Systems were offered.
Intangible Elements

Tangible Elements
 Continuum of Evaluation for Different Types of
Products

Most Most
Goods Services

Easy to evaluate
Difficult to evaluate
Clothing

Jewelry

Furniture

Houses

Automobiles

Restaurant meals

Vacations

Haircuts

Child care

Television repair

Legal services

Root canals

Auto repair

Medical diagnosis
{
{
High in search
qualities
High in experience High in credence
qualities qualities
{
Consumer Evaluation Processes for Services
 Search Qualities
 attributes a consumer can determine prior to
purchase of a product
 Experience Qualities
 attributes a consumer can determine after
purchase (or during consumption) of a product
 Credence Qualities
 characteristics that may be impossible to
evaluate even after purchase and consumption
Cardinal Principles of Service Quality
 Listening precedes action
 Reliability is key
 Flawless execution of the “basics”
 Pay attention to service design
 Perform service recovery well
 Surprise customers
 Practice “fair play”
 Promote teamwork
Adapted from Zemke, Ron (2002)
Gravin 8 Dimensions
 Performance
 Features
 Reliability
 Conformance
 Durability
 Serviceability
 Perceived Quality
 Aesthetics
 Relative Importance of Service
Dimensions When Respondents Allocate
100 Points [Study 1]

RELIABILITY 32%

TANGIBLES 11%

RESPONSIVENESS
22% EMPATHY 16%

ASSURANCE 19%
82
Relative Importance of Service Quality Dimensions [Study 2]
Mean Number of Points Allocated out of 100 Points

29 32 28

12 12
14
23 21 23
17 18
15
19 18 20
Auto Insurer Retail Chain Life Insurer

Reliability Responsiveness Assurance Empathy Tangibles

83
 Service Quality Exercise

Answer these questions:

Choose one of these  How unique/standardized is
SQ situations: product and/or service?
 Auto repair  Type of service – search,
experience, or credence.?
 Hospital visit  Pure service or product-
 Theme park service blend?
 Hair cut  What factor most affects
 Supermarket service quality?
 After service is delivered, is
 Fast food restaurant corrective action possible?
 Air travel