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CHAPTER THREE

SERVICE QUALITY

CONTENTS:

{A} MEANING AND BENEFITS
{B} DIMENSIONS OF SERVICE QUALITY
{C} PERCEIVED SERVICE QYUALITY
{D} SERVICE QUALITY GAP MODEL
{E} SERVICE QUALITY MANAGEMENT
{F} TOTAL QUALITY MANAGEMENT
{G} MEASURING SERVICE QUALITY
{H} PRE REQUISITE FOR ACHIEVING SERVICE
QUALITY
{I} SERQUAL MODEL
{J} CONCEPTS OF EFFICIENCY AND PRODUCTIVITY
{K} LOW PRODUCTIVITY
{L} IMPROVING SERVICE PRODUCTIVITY
{M} SERVICE FAILURE
{N} SERVICE RECOVERY
{O} COMPLAINT HANDLING
{P} CAUSE AND EFFECT
{Q} QUESTIONS








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A. MEANING AND BENEFIT

Service quality is a measure of how well the service delivered
matches customer expectations. Delivering service quality
means conforming to customer expectations on a consistent
basis. (Lewis and Booms)
In service quality is the foundation as services are not tangible.
Core product in service is performance. It is the performance of
the service that customer buys. The benefits of service quality
are:
Improves image in the eyes of customer
Contributes to higher profits
Improves morale of the employees
Contributes to higher efficiency and productivity.
Reduces cost of the end product
Encourage employee participation
Bring out continuous improvement
Increase customer satisfaction
Differentiate from competitors


B. DIMENSIONS OF SERVICE QUALITY

David Garvin identified eight dimensions of service quality.
These are:
i. Performance: The measure of quality is performance. For
the performance of car is distance it covers in an hour.
ii. Features: These are additional or supplementary products
besides the core product or service.
iii. Reliability: It is the ability of the service provider to fulfill
the value promise made to the customer. For example, the
level of comfort in a hotel.
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iv. Conformance: It refers to the extent to which the service is
in line with service quality standards or service promise
made by the service provider to the customer.
v. Durability: It refers to the time duration or length of time
that a product gives benefits without deterioration in
quality.
vi. Service ability: It refers to the ease at which the product or
service can be repaired.
vii. Aesthetics: It refers to the look or design of the product. It
is subjective in nature as services are intangible.
viii. Perceived Quality: It refers to the perceptions in the mind
of the consumers about the product or service which are
the result of advertising, brand promotion, word of mouth,
etc.
In addition to these dimensions of service quality
Zeithamal, Purasuraman, and Berry identified five
dimensions. These are:
i. Reliability: It means the service should be performed with
depend ability and as per the promise.
ii. Responsiveness: It means how fast or quick the service
providers response to the problem of the customers.
iii. Assurance: This refers to the knowledge, skills and
competencies of the service provider. It also indicates their
ability to generate trust, faith and confidence.
iv. Empathy: It relates to the caring, feeling as well as the
ability to give personalized services.
v. Tangibles: It refers to the quality of the service
infrastructure, the service related products.









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C. PERCEIVED SERVICE QUALITY

Perceptions are judgement of the consumer about the actual
service performance or service delivery. The evidence of service
experienced by customer includes people, process, and physical
evidence. When,
Perceived Quality > Expected Quality = Delighted Customer,
Perceived Quality = Expected Quality = Satisfied Customer,
Perceived Quality < Expected Quality = Dissatisfied Customer.


D. SERVICE QUALITY GAP MODEL

There is always a possibility of gap between service delivered
and service expected.

SATISFACTION = SERVICE RECEIVED SERVICE EXPECTED

The gap analysis helps in finding out various types of gaps so
that measures can be taken to fill these gaps. The various gaps
are:
i. The knowledge gap
ii. The standard gap
iii. The delivery gap
iv. The communication gap
v. The service gap

GAP ONE: THE KNOWLEDGE GAP
(NOT KNOWING THE CUSTOMER)

It is the gap between customer expectation and company understands
of customer expectation. It means the company has no proper
understanding of the customer.
The causes of this gap are:
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i. Lack of market research
ii. Inadequate upward communication
iii. Too many levels of management
iv. Lack of relationship focus
v. Inadequate service recovery

The solution includes:
i. Conduct proper market research
ii. Feedback from internal staff
iii. Efficient service recovery
iv. Complaint analysis
v. Customer satisfaction index.

GAP TWO: THE STANDARD GAP
(NOT KNOWING RIGHT SERVICE DESIGN)

It is the gap between company understanding and the actual service
standards or service specifications. It means the company has set
lower standards than its expectations. The reasons for this gap are:
i. Inadequate management commitment to service quality
ii. Not believing in standards.
iii. Absence of goal setting.

The solution includes:
i. Set clear service design
ii. Focus on customer oriented service
iii. Train managers in skills needed to deliver service
iv. Set clear cut goals
v. Standardize repetitive work to ensure consistency and reliability.




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GAP THREE: THE DELIVERY GAP
(NOT DELIVERING TO SERVICE STANDARDS)

It is the gap between standards set by the company and actual
delivery. There is shortfall in customer service. The causes/ reasons
are:
i. Indifferent attitude
ii. Lack of training
iii. Lack of supervision and control
iv. Failure to match demand and supply
v. Deficiencies in HR policies.

The solution is:
i. Recruit people with right skills
ii. Provide clear cut job specifications
iii. Provide training and development
iv. Use latest technology
v. Measure employees performance and reward

GAP FOUR: COMMUNICATION GAP
(NOT MATCHING PERFORMANCE TO PROMISE)

It is the gap between service delivery and service promise through
external communication. The reasons for this gap are:
i. Lack of integrated service
ii. Lack of proper education to customer
iii. Over promising
iv. Ineffective communication department

The solution includes:
i. Ensure delivery matches promise
ii. Develop advertising featuring real employee performing the job
iii. Ensure service standards
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iv. Offer different levels of services at different prices

GAP FIVE: THE SERVICE GAP

It is the gap between customer expectations and customer perceptions.
It is the result of various other gaps like standard gap, delivery gap,
and communication gap etc. The SQGM can be seen as below


CONCLUSION:
It is important to find out the various gaps in service quality so that
measures can be taken to fill the gaps. These gaps are internal as well
as external. For example, Standard Gap (GAP TWO) and Delivery
Gap (GAP THREE) are internal gaps arising from different functions
and departments within the organization. On the other hand
Knowledge Gap (GAP ONE) and Service Gap (GAP FIVE) are
external gaps between customer and organization.
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It is necessary to find out the causes of these gaps so that efforts can
be taken to fill the gap. Organization must fill first the internal gaps
and then external gaps. These gaps create dissatisfaction among
customer and filling up the gap creates customer satisfaction. Once
customer satisfaction is achieved efforts can be focused on customer
delight. This will lead to repeat purchases and consumer loyalty. It is
more economical to retain existing customer than to find out new
customers.
The various measures to overcome service quality gaps are:
i. Establishing customer understanding
ii. Designing system closer to customer expectations.
iii. Establishing customer oriented training system.
iv. Establishing corporate communication.
v. Increasing the tangibility of the intangibles.
vi. Establishing reliability
vii. Greater responsiveness
viii. Establishing strong CRM
ix. Establishing proper appraisal programme.
x. Understanding customers zone of tolerance.


E. SERVICE QUALITY MANAGEMENT

The SQM process involves three steps namely:
1. Setting the right standards: The first step is to set the right
service standards. For example, service standards in 5 star hotels
are different from service standards in an ordinary hotel. The
service standards should be well defined and measurable so that
there is no confusion about its implementation.
2. Implementing quality service: After setting the service quality
standards the next step is to implement these standards by
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providing necessary resources, manpower, facilities,
equipments, and support.
3. Monitoring service quality: Finally the service quality should be
monitored and if there are any gaps in service quality then
measures should be taken to bridge these gaps so that consumer
gets greater satisfaction from the services.


F. TOTAL QUALITY MANAGEMENT

It is management philosophy of doing business on the basis of
continuous quality improvement. In service marketing TQM is
delivery of excellent service to the end user. It does not include
one process but all the processes. Total implies all the
departments, all the processes, all employees, and all levels from
top to bottom. Some of the techniques of TQM are:
i. Statistical process control
ii. Process management
iii. Employee participation
iv. Management commitment and leadership
v. Empowerment and team building.

G. MEASURING SERVICE QUALITY

Without measuring quality it is not possible to find out quality service
gaps and take corrective measures. Service quality measures can be:
i. Soft measures
ii. Hard measures
Soft measures are those that cannot be easily measured and must be
collected by talking to customers, employees and others. It
provides direction on ways to provide customer satisfaction. Soft
measures include:
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i. Research
ii. Feedback
iii. Market survey
iv. Focus group

Hard measures are those that can be easily measured. For
example, number of customer calls, waiting in line, time
required to complete the task, and number of trains arriving late.
Hard measures include:
i. Operational processes
ii. Response rate
iii. Failure rate
iv. Delivery costs.


H. PRE REQUISITE FOR IMPROVING SERVICE
QUALITY
(STRATEGIES FOR IMPROVING SERVICE QUALITY)

i. Visionary leaders: There is a need of visionary leaders who can
take the services to the higher level by way of innovation, R and
D, and use of latest technology. For example, the organized
retail market in Mumbai was the creation of Mr. Kishore Biyani
who wrote the famous book IT HAPPENED IN INDIA.
ii. Setting high performance standards: Quality is not a matter of
chance but deliberate efforts. Thus management should set high
quality standards or benchmark as quality leader.
iii. Management commitment and support: Management must also
provide necessary support for the achievement of goals. Nothing
can be achieved without the commitment of top management.
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iv. Training employees: Employees are the key factor in service
organization. Unless they are competent and skilled no results
can be achieved
v. System of addressing complaints: There should be a system of
addressing customer complaints.
vi. Monitoring service quality: There should be some mechanism to
monitor the quality standards achieved, quality gaps found and
measures to fill the gap.


I. SERVQUAL MODEL

INTRODUCTION: It is a gap analysis research tool created by
Parasuraman, Zeithamel and Berry in 1988. It aims at identifying and
correcting gaps between desired level and actual level of service
performance

DIMENSIONS OF QUALITY: Customers are asked to rate the
various dimensions of quality. The five main dimensions of quality
are:
i. Tangible (Appearance of physical facilities)
ii. Reliability (Ability to perform)
iii. Responsiveness (Willingness to help)
iv. Assurance (Knowledge and Courtesy
v. Empathy (Care and Attention)
Subsequently some more dimensions are added in the above list.
These are:
i. Competence (Possessed skills and Knowledge)
ii. Courtesy (Politeness, Respect and Friendliness)
iii. Credibility (Trustworthiness and Believability)
iv. Feel secure (Free from danger/ risk)
v. Access (Approachable)
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vi. Communication (Listen to customers)
vii. Understanding the customer (Making efforts to understand
consumers)

APPLICATIONS: It is widely used in service industries to understand
customer needs and to access the service quality of the organization.
It can also be used internally to assess employees performance with
regard to service quality. It is also used in health care, banking sector
etc. Reliability is the most important attribute and tangibility is the
least important attribute.

ASSUMPTIONS: Customer needs can be documented and remain
stable. The results of the survey are accurate.

STEPS INVOVLED: It involves sample survey on selected number of
customers. Customers are asked to rate the quality of the service
against certain dimensions.
Perceptions and expectations are given a rating for various quality
dimensions like strongly disagree and strongly agree. Average
expectation rating is then subtracted from average perception rating
and then perception is calculated.
(Difference = Average expectation Average perception rating)
This can be seen from the following example/table,
A customer survey is done and the ratings are as under
DIMENSIONS PERCEPTION
AVERAGE
EXPECTATION
AVERAGE
DIFFERENCE
Tangible 5.4 2.4 3.0
Reliable 5.6 4.6 1.0
Responsive 3.2 3.5 - 0.3
Assurance 6.2 3.4 2.8
Empathy 2.8 4.2 - 1.4

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In the above survey empathy got the lowest rating and therefore these
aspects of service quality should be emphasized. It requires proper
training of manpower. Thus SERVQUAL process provides an
assessment of the gap between desired service and actual service
performance.

BENEFITS OF SERVQUAL
i. It provides customer perception of the services
ii. It provides customer comments and feedback
iii. It provides information about service quality at different levels
iv. It helps in assessing internal manpower

LIMITATIONS
i. The five dimensions of quality cannot be applied uniformity to
all services.
ii. The use of different ratings in calculating SERVQUAL may not
be reliable itself.
iii. This tool should be supplemented by other tools for assessing
quality.

J. BASIC CONCEPTS

i. Efficiency: It refers to the rate at which inputs are converted into
output. For example, number of tele calls per sales person
ii. Effectiveness: It refers to the extent to which the goals are
achieved. For example, number of productive calls per sales
person.
iii. Productivity: It is the ratio of output to inputs. According to
Peter Drucker, productivity means the balance between all the
factors of production that will give the greatest output for the
smallest efforts.
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iv. Economy: It is the cost of selecting or hiring people, material,
equipment and conversion into resource inputs for providing
services
v. Production Function: It is the relationship between output and
inputs.
vi. Capacity utilization: It is the percentage utilization of output
(services) to total capacity of output (services).


K. REASONS FOR LOW PRODUCTIVITY
Productivity in manufacturing sector can be easily measured but in
the service sector, it cannot be easily measured. Manufacturing sector
is capital intensive while service sector is labour intensive. The
productivity in service sector is low. The reasons for low productivity
of services are:
i. Small size of service organization,
ii. Lack of technology,
iii. Low level of education and skills,
iv. Low morale of service provider,
v. Lack of professional management.


L. IMPROVING SERVICE PRODUCTIVITY

The various measures to increase service productivity are:
i. Training and development
ii. Use of better technology
iii. Differentiating levels of services
iv. Diversifying services
v. Involving customer in delivery
vi. Proper management of demand and supply
vii. Matching capacities
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viii. Customer centric approach
ix. System approach

M. SERVICE FAILURE

When a particular service is not delivered as per customer
expectation it is called service failure. Service defect in any part of
the delivery process can lead to service failure. Usually services are
prone to failure unless the service provider takes too much
precaution about the quality of services. Some service failure,
sometimes are beyond the control of the management. Example,
bad weather, sabotage, etc.
Service failure may result in customer dissatisfaction and may
motivate consumer to indulge in negative word of mouth. This may
result in defection of customer which in turn affects business and
profitability. Thus service provider must find out ways and means
of solving the problem of service. Service recovery is a remedy to
the problem of service failure.

N. SERVICE RECOVERY

It refers to action taken by an organization in response to a service
failure. Service failure may occur due to any kind of reasons like
services may not be available when promised, it may be delivered
late or it may be delivered slowly, employee may be rude, uncaring
etc. The aim of service recovery is to find out the possible cause of
service failure and to overcome this failure and provide satisfaction
to the customer.
The three guiding principles of effective service recovery are:
i. Make customer feedback easy: Very often customers want to
provide feedback or complain about the service but find the
complaint procedure difficult or not available. Therefore
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service provider must make customer feedback easy and
convenient. This can be done by printing feedback forms and
hot numbers on all customer communication materials.
Assure customers that their feedback will pay off. Thank
customers for their feedbacks. Allow anonymous feedback.
Make customer comfortable.
ii. Take effective service recovery measures: Effective service
recovery procedure should be proactive, planned, trained and
empowered. Service recovery needs to be initiated on the
spot, ideally before customers have chance to complain.
Recovery procedure needs to be planned. Recovery skills
must be taught. Employees must be empowered to use their
judgments and communication skills to develop solutions that
will satisfy complaining customers.
iii. Establish appropriate compensation plan: There should be
appropriate compensation plan in case of service failure. The
compensation plan depends on the positioning of the firm in
the market, the nature of service failure, and type of
customer.

GUIDELINES FOR EFFECTIVE PROBLEM SOLVING:

The guidelines for effective problem solving are:
i. Admit mistake
ii. Act fast
iii. Do not argue with customers
iv. Show that you understand the problem
v. Give benefit of doubt
vi. Acknowledge customer feelings
vii. Clarify steps needed to solve the problem
viii. Keep customer informed
ix. Consider compensation
x. Regain customer goodwill
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O. COMPLAINT HANDLING

Introduction: One of the surest signs of bad relationship is absence of
any complaint from the customer. In service sector there are great
chances that a customer may not be fully satisfied with the quality of
services received by him. There is possibility of service failure.
Course of dissatisfied customer:
i. Do nothing
ii. Complaint in some form
iii. Take action against third party
iv. Abandon the supplier (negative word of mouth)

About 60% of the customers abandon supplier for reasons such as:
i. Failure in core service (25%)
ii. Unsatisfactory encounter (19%)
iii. Unsatisfactory response (10%)
iv. Unethical behavior (6%)

However only about 25% to 30% customers complain. Majority
complaints are made at the place of service received. Customers who
generally complain are:
i. From higher income group.
ii. Younger in age
iii. More knowledgeable about the service and procedure

Customers complain because:
i. Get some compensation
ii. Show their anger
iii. Improve the service
iv. Feel bad if problem not highlighted.


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Some customers do not complain because they feel
i. It is not worth time and effort
ii. No one would solve the problem
iii. Did not know where to complain
iv. Afraid of confrontation.

Complaint Handling and Service Recovery Process: The three
dimensions of perceived fairness in service recovery process are

i. Procedural Justice: It refers to the rules and policies that
customers have to follow in order to get justice or fairness.
Generally customer expects firms to take responsibility in the
fair procedure along with convenient and responsive recovery
process. For this purpose the system should be flexible and it
should give some consideration to customer inputs in the total
recovery process.
ii. Interactive Justice: It refers to the involvement of company
employees who is a part of service recovery process. Providing
explanation for the service failure and making efforts to solve
the problems are important but the recovery efforts must be just,
fair and honest.
iii. Outcome Justice: It refers to the compensation that a customer
receives as a result of the losses and inconveniences caused due
to service failure. It includes compensation for service failure
and also for the loss of time, efforts and energy.

Frontline Handling of a Complaint: Generally complaints and
problems are made to frontline staff. It is the responsibility of the
frontline staff to act professionally. Complaint handling is most
important aspect of problem solving. The following aspects should be
taken care:
i. Stay clean
ii. Avoid admitting any liability
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iii. Do not interrupt
iv. Get the facts
v. Find out what customer wants
vi. Identify the action to be taken
vii. Take action to solve the problem
viii. Provide time frame to solve the problem
ix. Record action
x. Follow up.

P. ROOT CAUSES ANALYSIS (THE FISHBONE
CHART)

INTRODUCTION: This technique was developed by Japanese
quality expert Kaoru Ishikawa. Under this technique groups of
manager and staff brainstorm all possible causes or reasons that are
responsible for a specific problem. These factors are classified into
five groups viz.,
i. Equipment
ii. People
iii. Material
iv. Procedure
v. Others
It is classified on a cause and effect chart known as Fishbone chart. In
order to use these services, these categories are extended by three
more categories namely:
i. People i.e., front stage personnel and back stage personnel
ii. Information failure
iii. Customers

Thus it is a technique to find out why problem occurs at first place
and what its primary causes are. In other words one can find out:
i. What happened
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ii. Why it happened
iii. What to do to reduce it in future,

Root cause analysis assumes that system and events are inter related.
There are three basic types of causes namely:
i. Physical causes
ii. Human causes
iii. Organizational causes

PHYSICAL
CAUSES
Tangible material
item failed in some
way
For example, car
brake failure
HUMAN
CAUSES
People did something
wrong
No one filled brake
fluid
ORGANIZATIONAL
CAUSES
Faulty system,
process and policy
Car was not properly
maintained

Process:
i. Define the problem/ symptom
ii. Collect data, proof, duration and impact
iii. Identify possible causes
iv. Identify root causes
v. Recommend and implement solutions

Service failure in a hotel: An example of service failure in a hotel and
the various factors responsible for the delay of a flight are:
1. Facilities and Equipments: The various causes of delay are
i. Lack of POS
ii. Improper/ Poor Ambience
iii. Unclean facilities
2. Front stage staff: The various causes of delay are
i. Poor timekeeping/ delivery
ii. Incorrect billing
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iii. Incorrect data keyed-in
iv. Rude/ Improper behavior

3. Procedures
i. Incorrect training procedures
ii. Untidy/ Unkempt staff
iii. Absence of formal complaint handling procedure
iv. Advertisement promises not made
In case of manufacturing customers have little impact on day to day
operational processes but in case of high contact services, customers
are involved in front stage operations. If they do not play their own
role correctly, they may reduce service productivity causing quality
problem for themselves and other customers.
For example, an aircraft may be delayed if a passenger tries to board
on the last minute. There can be many reasons for the delay of a
flight.
An example of service failure in a hotel is given below:
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Q. INNOVATION IN SERVICES

Service innovation is mainly about creating new experiences for
customers. It may be the result of using new technology,
changed processes and improved human factors. Information
and Communication Technologies [ICT] have helped service
innovation. For example, the system of self service is service
innovation. Technology has helped in providing innovative
services and also helped in increasing efficiency and
productivity. Design services are another area for service
innovation. There is growing demand for customized products
and services with shorter product cycles. Consumer goods such
as cell phones, automobiles, fashion accessories and tourism are
examples of service innovation and opportunities.

R. QUESTIONS

{I} Explain the following concepts:
i. Service recovery
ii. Service failure
iii. Productivity
iv. Efficiency and effectiveness
v. Technical skills v/s Functional skills
vi. Empathy
vii. Levels of customer contact
viii. Procedural justice
ix. Service quality
x. Quality gap
xi. Total quality management

{II} Answer the following
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i. Explain the dimensions of service quality with reference to
any one service sector.
ii. Explain service quality gap model.
iii. What are the benefits of service quality?
iv. Explain Servqual Model.
v. What are the principles of service recovery?
vi. What are the guidelines for effective complain handling?
vii. Describe cause and effect analysis of a service failure in a
hotel or a fishbone chart.
viii. Explain innovation in services.