Service Quality

Prof. Aijaz Jafri

Introduction
“Quality cannot be seen as separate from overall performance or the bottom line.”
Curt W. Reimann, Director, Baldrige Quality Award 10

‘The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or
implied needs’ – BS 4778:
1987 (ISO 8402, 1986) Quality Vocabulary: Part 1, International Terms.

‘Quality should be aimed at the needs of the consumer, present and future’ – Deming, another early doyen
of quality management.

‘The total composite product and service characteristics of marketing, engineering, manufacture and
maintenance through which the product and service in use will meet the expectation by the customer’ –
Feigenbaum, author of ‘Total Quality Control.’

‘Conformance to requirements’ – Crosby, an American quality management consultant famous in the 1980s.

Improving the quality of services is more difficult than improving the quality of products
WHY DOES QUALITY MATTER?
“A person who has a good purchase experience is more inclined to
spend again,”
Claes Fornell, director of the University of Michigan’s National Quality Research Center

Defining Service quality vs Product quality

Misalignment between company and customer specifications for the

service process leads to dissatisfaction, even when the process goes
exactly as it was designed.

Difference between quality and value

Service Quality
• High quality does not have to carry a high price.
The GAP Model of Service quality helps to identify the gaps between the
perceived service and the expected service. Five Gaps occur in the Service
Delivery Process. They are:
1. The gap between Customer Expectation and Management Perception
2. The gap between Service Quality Specification and Management
Perception
3. The gap between Service Quality Specification and Service Delivery
4. The gap between Service Delivery and External Communication
5. The gap between the Expected Service and Experienced Service.
SERVQUAL
Servqual is a survey research instrument developed by Zeithmal to measure customer satisfaction with various aspects of
service quality. This Scale contains 22 items that reflect five dimensions of Service Quality.

It is based on an assumption that consumers evaluate a firm’s service by comparing:

A) Their perceptions of service received.
B) Their prior expectations of companies in a particular industry.
Respondents complete a series of scales that measure their expectations of companies in a particular industry on a wide
array of service characteristics.

They are asked to record their perceptions of a specific company whose services they have used.

When the perceived performance ratings are lower than the expected service, it will be termed as Poor Quality and Vice-
versa.

The 22 items that are contained in the scale are:

The 22 items that are contained in the scale are: A16: Staff is friendly and polite to each other.
T1: Clean and Comfortable work environment. A17: Hospital pays attention to the training of the staff’s
T2: Modern and Advanced work equipment. professional knowledge and skills.
T3: Office area marked. E18: Hospital can show concern for individual staff.
T4: Staff with a neat and professional appearance. E19: Hospital can give personalized care to staff.
L5: Staff working time and intensity are appropriate. E20: Hospital knows the staff’s needs.
L6: Hospital is interested in solving the problems at work. E21: Hospital pays attention to staff’s Interests.
L7: Hospital is reliable. E22: Hospital pays attention to the staff’s needs.
L8: Working Processes are clear and concise.
L9: Welfare benefits promised by the hospital can be realized.

S10: Hospital can satisfy the staff’s working needs.

S11: Hospital is willing to help staff to solve working problems.
S12: Hospital can process the staff’s complaint in a timely
fashion.
S13: Hospitals can process the staff’s major and unexpected
events actively.
A14: Hospital is reliable.
A15: Staff feels comfortable at work.
 Quality Service by Design

Incorporation of Quality in the Service Package

Consider the example of a budget hotel competing on overall cost leadership:
1 Supporting facility. Architecturally, the building is designed to be constructed of materials that are maintenance-free, such
as concrete blocks. The grounds are watered by an automated underground sprinkler system. The air-conditioning and
heating system is decentralized by using individual room units to confine any failure to just one room.
2 Facilitating goods. Room furnishings are durable and easy to clean (e.g., bedside tables are supported from the wall to
facilitate carpet cleaning). Disposable plastic cups are used instead of glass, which is more expensive, requires cleaning, and,
thus, would detract from the budget image.
3 Information. An online computer tracks guest billing, reservations, and registration processing. Keeping a record of
customer’s prior stay speeds future check-in, avoids billing errors, and anticipates needs (e.g., non-smoking room). This
system allows guests to check out quickly and automatically notifies the cleaning staff when a room is free to be made up.
Noting time of check-out allows for scheduling early maid service and inventorying available rooms for early arrivals.
4 Explicit services. Maids are trained to clean and make up rooms in a standard manner. Every room has the same
appearance, including such “trivial” matters as the opening of the drapes.
5 Implicit services. Individuals with a pleasant appearance and good interpersonal skills are recruited as desk clerks. Training
in standard operating procedures (SOPs) ensures uniform and predictable treatment for all guests.
 Taguchi Methods

The budget hotel example illustrates the application of Taguchi methods, which are named after Genichi Taguchi, who
advocated “robust design” of products to ensure their proper functioning under adverse conditions.
The idea is that for a customer, proof of a product’s quality is in its performance when abused. For example, a telephone is
designed to be far more durable than necessary because more than once it will be pulled off a desk and dropped on the
floor. In our budget hotel example, the building is constructed of concrete blocks and furnished with durable furniture.

Taguchi also applied the concept of robustness to the manufacturing process. For example, the recipe for caramel candy
was reformulated to make plasticity, or chewiness, less sensitive to the cooking temperature. Similarly, our budget hotel
uses an online computer to notify the cleaning staff automatically when a room has been vacated. Keeping
the maids posted on which rooms are available for cleaning allows this task to be spread throughout the day, thus avoiding
a rush in the late afternoon that could result in quality degradation.
Taguchi believed that product quality was achieved by consistently meeting design specifications. He measured
the cost of poor quality by the square of the deviation from the target . Once again, note the attention to
standard operating procedures (SOPs) used by the budget hotel to promote uniform treatment of guests and
consistent preparation of the rooms.
 Poka-Yoke (Failsaf ing)

Shigeo Shingo believed that low-cost, in-process, quality-control mechanisms and routines used by employees in their work
could achieve high quality without costly inspection. He observed that errors occurred, not because employees were
incompetent, but because of interruptions in routine or lapses in attention.
He advocated the adoption of poka-yoke methods, which can be translated roughly as “foolproof ” devices. The pokayoke
methods use checklists or manual devices that do not let the employee make a mistake. As noted by Chase and Stewart and
summarized in Table 6.2 , service errors can originate from both the server and the customer. Poka-yoke methods therefore
should address both sources.
 Quality Function Deployment

To provide customer input at the product design stage, a process called quality function
deployment (QFD) was developed in Japan and used extensively by Toyota and its suppliers.
The process results in a matrix, referred to as a “house of quality,” for a particular
product that relates customer attributes to engineering characteristics. The central idea
of QFD is the belief that products should be designed to reflect the customers’ desires
and tastes; thus, the functions of marketing, design engineering, and manufacturing must
be coordinated. The “house of quality” provides a framework for translating customer
satisfaction into identifiable and measurable conformance specifications for product or
service design.
Although QFD was developed for use in product planning, its application to the design
of service delivery systems is very appropriate
Walk-Through Audit
Delivery of a service should conform to customers’ expectations from the beginning to the end of the experience.
Because the customer is a participant in the service process, his or her impressions of the service quality are influenced
by many observations.
A walk-through audit (WtA) is a customer focused survey to uncover areas for improvement. Fitzsimmons and Maurer
developed such a walk-through audit for full-service sitdown restaurants.

The audit consisted of 42 questions spanning the restaurant dining experience. The questions begin with approaching
the restaurant from the parking area, then walking into the restaurant and being greeted, waiting for a table, being seated,
ordering and receiving food and drinks, and finally receiving the check and paying the bill. The questions include nine
categories of variables: (1) maintenance items, (2) person-to-person service, (3) waiting, (4) table and place settings,
(5) ambiance, (6) food presentation, (7) check presentation, (8) promotion and suggestive selling, and (9) tipping.
Thus, the entire customer experience is traced from beginning to end. Unlike the brief and overall customer satisfaction
survey as shown in Figure 6.6 , the WtA is focused on the details of the service delivery process in an effort to uncover
actionable items for improvement.

The walk-through audit is an opportunity to evaluate the service experience from a customer’s perspective,
because customers often become aware of cues the employees and managers might overlook. There is no inherently
superior service design. There are, instead, designs that are consistent and that provide a signal to customers about the
service they can expect. Providing tangibility in a service involves giving the customer verbal, environmental, and sensory
cues that create a pleasant experience and encourage repeat visits.
Cost of Quality
Five different quality perspectives
(Haksever et al., 2000; Garvin, 1988):

• Transcendent
• Product based
• User based
• Manufacturing based
• Value based
MEASURING SERVICE QUALITY
• The Malcolm Baldrige National Quality Award
• The International Organization for Standardization’s (ISO)
• Six Sigma
Unconditional Service
Guarantee • Unconditional. Customer satisfaction is unconditional, without
exceptions. For example, L. L. Bean, a Maine mail-order house, accepts all
returns without question and provides a replacement, refund, or credit.
• Easy to understand and communicate. Customers should know precisely
what to expect from a guarantee in measurable terms. For example,
Bennigan’s promises that if a lunch is not served within 15 minutes, the
diner receives a free meal.
• Meaningful. The guarantee should be important to the customer in
financial as well as in service terms. Domino’s Pizza guarantees that if an
order is not delivered within 30 minutes, the customer gets $3 off rather
than a free pizza, because its customers consider a rebate to be more
reasonable.
• Easy to invoke. A dissatisfied customer should not be hassled with filling
out forms or writing letters to invoke a guarantee. Cititravel, a service of
Citibank, guarantees the lowest airfares or a refund of the difference; a
toll-free call to an agent is all that is necessary to confirm a lower fare and
get a refund.
• Easy to collect. The best guarantees are resolved on the spot, as
illustrated by Domino’sPizza and Bennigan’s.
Service Recovery Framework
Approaches to Service Recovery

There are four basic approaches to service recovery: the case-by-case, the systematic response, the early
intervention, and the substitute service recovery approaches.
The case-by-case approach addresses each customer’s complaint individually. This inexpensive approach is
easy to implement, but it can be haphazard. The most persistent or aggressive complainers, for example, often
receive satisfactory responses while more “reasonable” complainers do not. The haphazardness of this
approach can generate perceptions of unfairness.
The systematic-response approach uses a protocol to handle customer complaints. It is more reliable than the
case-by-case approach because it is a planned response based on identification of critical failure points and
prior determination of appropriate recovery criteria. As long as the response guidelines are continuously
updated, this approach can be very beneficial because it offers a consistent and timely response.
An early intervention approach adds another component to the systematic-response approach by attempting
to intervene and fix service-process problems before they affect the customer. A shipper who realizes that a
shipment is being held up by a truck breakdown, for example, can choose to notify the customer immediately
so the customer can develop alternative plans if necessary.
An alternate approach capitalizes on the failure of a rival to win the competitor’s customer by providing a
substitute service recovery. At times the rival firm may support this approach. A desk person at an overbooked
hotel, for example, may send a customer to a rival hotel. The rival hotel may be able to capitalize on such an
opportunity if it can provide a timely and quality service. This approach is difficult to implement because
information about a competitor’s service failures is usually closely guarded.
Complaint Handling Policy
A customer complaint should be treated as a gift. A complaining customer is volunteering her
time to make the firm aware of an error because she cares. This opportunity should be seized
upon not just to satisfy the customer but also to create a relationship with someone who will
become an advocate for the firm. A complaint- handling policy should be incorporated into the
training of all customer-contact employees. An example policy might include the following
features:
• Every complaint is treated as a gift.
• We welcome complaints.
• We encourage customers to complain.
• We make it easy to complain.
• We handle complaints fast.
• We treat complaints in a fair manner.
• We empower our employees to handle complaints.
• We have customer- and employee-friendly systems to handle complaints.
• We reward employees who handle complaints well.
• We keep records of complaints and learn from them
SP
C
Constructing a control chart is similar to determining a confidence interval for the mean of a sample. Recall from statistics
that sample means tend to be distributed normally according to the central-limit theorem (i.e., although the underlying
statistic may be distributed in any manner, mean values drawn from this statistic have a normal distribution). We know
from standard normal tables that 99.7 percent of the normal distribution falls within 3 standard deviations of the mean.
Using representative historical data, both the mean and the standard deviation for some system performance measure are
determined. These parameters then are used to construct a 99.7 percent confidence interval for the mean of the
performance measure. We expect future sample means that are collected at random to fall within this confidence interval;
if they do not, then we conclude that the process has changed and the true mean has shifted.
Control Chart for Variables (X-chart and
R-chart)