An executive summary for
managers and executives
can be found at the end of
this article
Marketing orientation
THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999, pp. 171-186 © MCB UNIVERSITY PRESS, 0887-6045
Importance-performance
analysis as a strategic tool for
service marketers: the case of
service quality perceptions of
business students in New
Zealand and the USA
John B. Ford
Professor of Marketing and International Business, College of Business
and Public Administration, Old Dominion University, Norfolk, Virginia,
USA
Mathew Joseph
Associate Professor of Marketing, School of Business, Georgia College
& State University, Milledgeville, Georgia, USA.
Beatriz Joseph
Adjunct Lecturer in Marketing, Royal Melbourne Institute of
Technology, Melbourne, Victoria, Australia
Keywords Customer satisfaction, Higher education, Performance measurement,
Service quality, Services marketing
Abstract Intense competition in higher education in many different countries mandates
the need for assessments of customer-perceived service quality for differentiation
purposes. An instrument developed specifically from a business education setting was
employed utilizing an importance/performance approach with seven determinant choice
criteria groupings. A sample of business students in New Zealand and the mid-Atlantic
region of the USA participated, and some important problems in perceptions were noted.
Strategic implications for the universities involved and suggestions for future research
are provided.
Introduction and background
Intense competition forces companies to adopt a marketing orientation in
order to differentiate their offerings from those of their competitors. Service
industries have been reluctant to adopt this kind of focus, and nowhere has
this been truer than in the case of higher education. For many years colleges
and universities were in the luxurious position of seeing ever-increasing
enrollments and resultant budgets, but the boom of the 1970s and 1980s has
been replaced by the bust of the 1990s. Universities are facing intense
competition from heretofore non-threatening technical institutions which are
now offering virtually identical courses at competitive prices. Never before
have colleges and universities in the USA as well as in many other countries
had to focus on asking what society values in the skills and abilities of their
graduates (Ginsberg, 1991; Lawson, 1992) nor have they been concerned
with asking their students what they feel about their educational
“experiences” (Bemowski, 1991). This type of focus would require a careful
assessment of the perceptions of the relevant constituencies. Educational
institutions must now get inside the heads of their target markets, assess their
needs, modify their offerings to meet those needs, and thereby enhance the
perceived quality of the service which they provide.
Firms in many industries have attempted to enhance their customers’
perceptions of quality through adoption of total quality management (TQM)
171
 systems. Variations of the TQM framework, including total quality service
(Albrecht, 1991) and the total quality process (Coffey et al., 1991), have
been adopted by educational institutions to bolster eroding competitive
positions. Some universities have attempted to get ISO 9000-type quality
process designations to attract students for particular degree programs. The
key theoretical linkage here is that customer satisfaction is affected by
perceived quality (Anderson and Sullivan, 1993; Cronin and Taylor, 1992;
Oliver and De Sarbo, 1988) which in turn affects corporate profitability
(Anderson et al., 1994; Rust and Zahorik, 1993). What is clear from the
literature is that perceived quality of service in higher education is of
paramount strategic importance (Peters, 1992; Bemowski, 1991). While
there are a number of relevant markets that the university must consider
when assessing perceived quality, this study will focus on the perceptions of
the students of business in a cross-cultural setting.
Service attributes In order to assess the perceptions of service quality, the model most often
utilized has been SERVQUAL developed by Parasuraman et al. (1985) and
refined in 1988. The SERVQUAL questionnaire presents the respondent
with a series of service attributes which they rate using a Likert-type scale
response format. The 22 attributes which are included are grouped into five
underlying dimensions:
(1) tangibles,
(2) reliability,
(3) responsiveness,
(4) assurance, and
(5) empathy.
The respondent is asked first to provide their ratings for an excellent service
firm of the type in question, which is followed by their ratings for the actual
service which they received. The difference between these perceptual ratings
on the 22 service attributes then identifies the potential “gaps” where the
respondent experiences disconfirmed expectations (Parasuraman et al.,
1988). This then indicates strategic options for service firms which can shore
up their quality images with their customers. SERVQUAL has been
successfully adapted in an educational context (e.g. Ford et al. 1993);
however, a series of criticisms of the SERVQUAL model have been raised
which focus on:
(1) the potential inappropriateness of the five dimensions of choice criteria
used by SERVQUAL (Cronin and Taylor, 1992; Carman, 1990);
(2) the inability of expectations to remain constant over time (Carman,
1990); and
(3) the lack of prior knowledge and experience with university education
and the unrealistic expectations of incoming university students
(Chapman, 1979).
As a result of these criticisms, an alternative method of assessing service
quality is employed in this study which is based on the importance/
performance paradigm. It is reasonable to assume that when students
evaluate the quality of their educational experience, they are likely to place
different importance weights on different criteria. Martilla and James (1977)
developed a two-dimensional graphical representation which demonstrates
the mean importance and performance ratings for attributes used to assess

172 THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999


Importance/performance
paradigm
Educational institution
assessment
THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999
the quality of a particular service. The authors suggested that there were two
issues which must be dealt with to employ this technique:
(1) the attributes themselves must be carefully chosen using sound
qualitative methods; and
(2) the importance and performance measures must actually be separated
from each other to eliminate the natural bias which would occur if they
are measured together.
Ennew et al. (1993) raise another issue which pertains to this type of
approach involving the scaling used. They claim that, since cardinal scales
are inappropriate for this type of research, ordinal scaling must be utilized.
They also suggest that a comparison of mean scores on the importance of
service attributes does provide an effective measure of the ability of a
service to meet the needs of customers.
It could be argued that the importance/performance paradigm is the most
appropriate way of measuring service quality in education (Joseph and
Joseph, 1997). It is also argued that the information derived from this
technique will prove invaluable in terms of the development of marketing
strategies for the educational institutions that use it. For example, if through
the use of the importance/performance paradigm it has been determined that
the cost of education is an important factor in the decision of which
university to attend, administrators could develop a marketing strategy that
incorporates different financial aid programs. It should also be noted that the
importance/performance paradigm could just as effectively be applied to
other service industries besides education (e.g. food service, hotels/motels,
hospitals, healthcare providers, etc.).
The purpose of this particular study is to extend the literature on service
quality into higher education on a cross-cultural basis. This will be
accomplished through assessing and comparing the perceptions of
undergraduate business students in major urban universities in New Zealand
and the USA.
Methodology
The questionnaires used for this study were derived through a two-stage
process. The New Zealand questionnaire was developed first, and the first
stage involved focus groups of six to ten individuals from different
representative groups of New Zealand business students, who identified a
series of appropriate attributes for educational institution assessment. These
attributes were then used to develop a questionnaire which was sent to a
random sample of New Zealand university students enrolled in their final
year of study. The questionnaire contained four sections which assessed:
(1) the student’s perceptions of an excellent university,
(2) the importance rankings for university attributes,
(3) the student’s perceptions of their own university, and
(4) a series of respondent demographic items.
This methodology could be used just as effectively by other service
industries. A series of focus groups with past, present and potential hospital
patients could produce a series of key attributes to rate various hospitals on.
The key to the success of this process is the careful selection of the
participants for the focus groups, to ensure that only representative
individuals are helping in the identification of relevant evaluation criteria.
173
 Another key is the application of the focus group methodology in each
country in which consumer surveys would be done to evaluate service quality
in order to ensure that the criteria used for assessing the quality of the service
were appropriate and comparable across the responding country samples.
American setting A series of focus groups were run with US students from a major mid-
Atlantic university to assess the appropriateness of the questionnaire in an
American setting. Since the questionnaire had already been developed in
New Zealand before the study was done in the USA, a similar use of focus
groups was applied in the USA with past, present and future university
business students. While the exact title of the attributes identified in the US
setting was slightly different from the New Zealand criteria, a deeper
analysis indicated that the content of the items was basically the same. The
attributes identified in the New Zealand study were deemed appropriate for
use in the USA. The items used in the questionnaire (in the New Zealand
factor configuration) are as follows:

Programme issues (factor 1)

P1: The university has a range of degree options available.
P2: The university has flexibility in allowing switching of majors.
P3: The university has a degree programme with flexible structure and
content.
P4: The university has a number of specialized programmes of study
available.
P5: The university has flexible entry requirements.
P6: The university has a practical component in the degree programme.

Academic reputation (factor 2)

A1: The university offers a reputable degree.
A2: The university has excellent instructors.
A3: The university offers excellent academic facilities.

Physical aspects/cost (factor 3)

PH1: The university offers housing at a reasonable expense.
PH2: The university has excellent housing facilities.
PH3: The university offers excellent sports and recreational programmes.
PH4: The university offers an education at a reasonable expense.

Career opportunities (factor 4)

C1: The university’s graduates are easily employable.
C2: The university provides excellent information on career opportunities.

Location (factor 5)
L1: The university has an ideal location.
L2: The university has an excellent campus layout and appearance.

Time (factor 6)
T1: The university allows an acceptable amount of time to complete the
degree.

174 THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999


Important choice criteria
THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999
Other (factor 7)
O1: The choice of a university is influenced by family members and peers.
O2: The choice of a university is influenced by word-of-mouth.
The wording for the US survey was slightly different, but the topic areas
were found to be the same. There were spelling differences (e.g.
programmes as opposed to programs), but other than that there were only
insignificant differences between the survey instruments which were used.
The researcher must be careful, when applying this methodology, that he/she
makes every effort to let the focus groups produce their own particular
evaluation criteria. It is best not to lead the groups to find the same
evaluative criteria. In this case, there was no attempt to force the US students
to reach a particular conclusion; therefore, the evaluative criteria were
developed separately from one another. As a result, the comparability of the
research in the two-country setting was assured.
It should be noted that the focus groups could be structured just as easily
with healthcare patients, food service customers, hotel visitors or any
relevant constituency to assess the important choice criteria pertinent to the
particular service industry involved. It should not, however, be assumed that
the particular attributes found appropriate for the educational institution
evaluation in this cross-cultural setting would be appropriate for any other
service industry. Once the appropriate attributes for service institution
quality evaluation have been developed, the questionnaire should be
structured with four separate sections:
(1) the respondent’s perceptions of an excellent service provider,
(2) the importance rankings for the service evaluation attributes determined
from the focus groups,
(3) the respondent’s perceptions of their own service provider, and
(4) a series of respondent demographic items.
Having developed the appropriate questionnaires in this study to be applied
in the USA and New Zealand, the sample respondents chosen to participate
in this study were undergraduate business students from several universities
in New Zealand and a major university in the mid-Atlantic region of the
USA. The survey was completed by 616 students in New Zealand and 206
students in the USA with a mean age of 21 for the New Zealand sample and
25.4 for the USA. All respondents were undergraduate students studying
business, and the gender mix was 355 males and 261 females in New
Zealand and 101 males and 103 females in USA (two USA students did not
indicate their gender). It should be noted here that the sampling
methodologies were not exactly the same. As a result, there are always
potential questions when comparing the results. The New Zealand sample
was a mail survey to business students in their final year of study from
several New Zealand universities. There were 616 students who completed
the questionnaires out of 1,000 that were sent out. The USA sample also
involved business students in their last year of undergraduate study;
however, the questionnaires were handed out in business classes to be filled
out by the students. The US study was smaller due to limited access to
business students with timing in the semester. Classes were reaching closure
for the semester, and many professors did not allow access to their students
with final class presentations being made. The US sample had a 100 percent
response rate, while the New Zealand sample obtained a 61.6 percent
response rate. Since the purpose was to examine the ability of the
175
 methodology to function in a cross-cultural setting, the authors believe that
effective comparisons can be made from the respondents involved but
caution that generalizability would be limited.

Results
Analysis of the New Zealand data
Tertiary educational Factor analysis was run to understand the factor structure of the New
institutions Zealand sample service evaluation attributes for tertiary educational
institutions. The data from only the New Zealand sample were analyzed in
this factor analysis. Since one of the tasks was to examine the attributes and
possible underlying dimensions for the different samples, it was assumed
that the combining of the two samples into a pool for data analysis would be
inappropriate. The rotated factor scores for the model of the important
choice criteria can be seen in Table I. This Table shows that there are strong
links between the factors in the seven factor solutions. The eigenvalue for
factor seven is just below one, but 59 percent of the total variance is
attributable to the first seven factors. Thus, a model with seven factors may
be adequate to represent the data for this particular sample of New Zealand
business students. There were two cross-loadings worth mentioning:
(1) specialist programmes (from programme issues – factor 1) also had a
high cross-loading on factor 2 (academic reputation); and
(2) cost of education (from physical aspects/cost – factor 3) also had a high
cross-loading on factor 4 (career opportunities).

Programme issues (factor 1)

Options available 0.68671
Flexibility to move within school of study 0.66093
Degree provides flexibility 0.61951
Specialist programmes provided 0.47434
Flexible entry requirements 0.46208
Practical component in degree 0.42301

Academic reputation (factor 2)

Reputable degree 0.73218
Excellent instructors 0.71301
Excellent academic facilities 0.66333

Physical aspects/cost (factor 3)

Reasonable cost of accommodation 0.80941
Excellent accommodation facilities 0.75674
Excellent sports and recreational facilities 0.54216
Reasonable cost of education 0.44208

Career opportunities (factor 4)

Graduates easily employable 0.76103
Excellent information on career opportunities 0.74107

Location (factor 5)
Ideal location 0.55615
Excellent campus layout and appearance 0.60581

Time (factor 6)
Acceptable length of time to complete degree 0.89381

Other (factor 7)
Family and peers influence university choice 0.84187
Word of mouth influences choice of university 0.81399

Table I. Factor analysis solution for New Zealand

176 THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999


Student perceptions
The results of the reliability analysis show that the coefficient alphas were
above 0.60 for all the factors, thereby lending support to the suitability of the
items in each factor.
The next step in the analysis was to examine the sample responses across the
factor items to assess the student perceptions of the attributes, the
importance of the factor groupings, and the perceptions of the students of
their own university. The results can be found in Table II. The negative
scores indicate that given the importance of these items, their mean
performance scores are potentially problematic. This Table shows that the
respondents have a perceptual problem with their respective New Zealand
universities. The only areas where students appear to be getting what they
expected is in terms of flexible entry requirements and location. The biggest
problem areas seem to be the condition of the academic facilities (–1.056),
the cost of accommodation (–1.067), and the quality of the instructors
(–1.335). It is important to note that this methodology allows for the
identification of specific problem areas which can then be improved to help
the student develop a more positive view of their university. A second part
of the assessment, however, involves the student perceptions regarding the
rank ordering of importance of the factors themselves. These give added
credence to the importance-performance mean comparisons. These rankings
are found in Table III. The order of importance for each of the factors
identified by the analysis was found to be:

Summary of means
Performance
Category Importance Performance minus importance

Physical aspects
Accommodation facilities 3.69 2.971 –0.725
Academic facilities 4.716 3.660 –1.056
Campus layout and appearance 4.002 3.734 –0.268
Sports and recreational facilities 3.998 3.600 –0.398
Cost/time
Length of degree 3.908 3.998 –0.09
Cost of accommodation 3.747 2.680 –1.067
Cost of education 3.662 2.892 –0.77
Academic issues
Reputable degree 4.667 3.817 –0.856
Excellent instructors 4.705 3.370 –1.335
Programme issues
Specialist programmes 4.228 3.541 –0.687
Flexible structure and content 4.242 3.474 –0.768
Practical component 4.096 3.182 –0.914
Options available 4.370 3.838 –0.532
Flexibility to move within school of study 4.143 3.374 –0.769
Flexible entry requirements 3.102 3.305 0.203
Career opportunities
Employable graduates 4.120 3.468 –0.652
Information on career opportunities 4.413 3.653 –0.76
Location
Ideal location 3.575 3.630 0.055
Other
Word of mouth 3.249 2.982 –0.267
Family and peers 3.251 2.926 –0.325

Table II. Student perceptual means for New Zealand sample

THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999 177

 Factors Ranking

New Zealand sample

Academic reputation 1
Career opportunities 2
Programme issues 3
Cost/time 4
Physical aspects 5
Location 6
Other 7
USA sample
Academic reputation 1
Cost/time issues 2
Program issues 3
Other 4
Physical aspects 5
Choice influences 6

Table III. Comparison of respondent mean importance scores among the factor
groupings

• academic reputation, followed by

• career opportunities,
• programme issues,
• physical aspects,
• location, and
• other.
This assessment helps to illuminate the findings in Table II.
Performance of The negative mean differentials in Table II indicate that the respondents do
universities not believe that their own universities are quality institutions and, according
to the literature, this should lead to customer dissatisfaction. A third element
in the analysis which goes beyond the data found in Tables II and III
involves a single-item perceptual statement which each respondent was
asked to fill out: a questionnaire asking how satisfied the respondent was
with the overall service that they received. In the case of this New Zealand
sample, the vast majority (67 percent) of the respondents indicated that they
were satisfied with their overall educational experience. The mean response
to the question about satisfaction with their university experience was 3.749
in a five-point scale. It could be argued that the performance of universities
falls in the respondents’ “zone of tolerance”. This suggests that, even though
the respondents have perceptual problems with the quality of service
delivered by their institutions, they are not unhappy with the service which
they received as long as certain conditions are met (Berry and Parasuraman,
1991). There is a range, therefore, of reasonable service provision within
which the customer will be forgiving but, after the limit is reached, the
customer will become dissatisfied.
This idea of a variation between adequate service and desired service (“zone
of tolerance”) is clearly demonstrated in the pictorial representation of
importance and performance scores for each service factor as shown in
Figure 1. This is the fourth and last step of the assessment process. The
importance-performance grid in Figure 1 demonstrates that the majority of
the factors and their underlying attributes fall into the “keep up the good
work” quadrant. The data used to construct the importance-performance grid

178 THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999

 Extremely 5 Concentrate Keep up the
important here good work

F
4.5

A
C
D
3.95
B

E
3.5

G
Moderately Low Possible
important 3 Priority Overkill
2 2.5 3 3.41 4

Fair Good
Performance Performance

Key
A Career Opportunities
B Cost/Time
C Physical Aspects
D Programme Issues
E Location
F Academic Reputation
G Other

Figure 1. Importance-performance grid, New Zealand student sample

were the overall importance and performance means. From a strategic point
of view this grid provides a tool for strategy development as it gives a clear
picture of the factors that are critical for resource allocation. Practically, it
appears as though the only area for the New Zealand universities to address
is the downplaying of the locational attributes and possibly the bolstering of
cost/time factor attributes.

Analysis of the US data

Principal components Factor analysis was then run of the US business student analysis and the
extraction optimal solution was found for six factors. These six factors and their rotated
factor scores are found in Table IV. Principal components extraction was
used with varimax rotation, and some interesting differences were found
when comparing the factor structure to the New Zealand study. All factors
had eigenvalues of greater than 1.00, and the cumulative percent of variance
explained for the six factors was 60.3 percent, which is quite good (Hair
et al., 1995). When assessing discriminant validity, most of the factor cross-
loadings were below 0.2. There were three troubling cross-loadings which
are worth noting here:
(1) Academic facilities (from Physical Aspects – factor 2) also had a high
cross-loading on factor 3 (Academic reputation).
(2) Internships/practical component (from Academic reputation – factor 3)
also had a high cross-loading on factor 1 (Program issues).
(3) Graduates are employable (from Other – factor 6) also had a high cross-
loading on factor 4 (Cost/time issues).
The conclusion is that there is a reasonable, although not optimal,
discriminant validity for the model in this sample context. This would seem
to lend further credence to the appropriateness of the items included in each
factor.

THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999 179

 Program issues (factor 1)
Range of programs of study (P4 from New Zealand study) 0.76969
Flexibility of degree program (P3 from New Zealand study) 0.70374
Major change flexibility (P23 from New Zealand study) 0.67816
Range of degree options (P1 from New Zealand study) 0.64926
Physical aspects (factor 2)
Sports programs (PH3 from New Zealand study) 0.74672
Housing and services provided (PH2 from New Zealand study) 0.67364
Campus layout and appearance (L2 from New Zealand study) 0.66795
Academic facilities (A3 from New Zealand study) 0.51371
Academic reputation (factor 3)
Quality of instructors (A2 from New Zealand study) 0.73921
Degree reputation (A1 from New Zealand study) 0.69797
Career placement information (C2 from New Zealand study) 0.54908
Internships/practical component (P6 from New Zealand study) 0.48804
Cost/time issues (factor 4)
Reasonable cost of education (PH4 from New Zealand study) 0.74443
Reasonable time to degree (T1 from New Zealand study) 0.70318
Reasonable cost of housing (PH1 from New Zealand study) 0.61450
Choice influencers (factor 5)
Influence from family members (O1 from New Zealand study) 0.87487
Influence of word-of-mouth (O2 from New Zealand study) 0.84228
Other (factor 6)
Flexible admissions (P5 from New Zealand study) 0.72727
Ideal location (L1 from New Zealand study) 0.56675
Graduates are employable (C1 from New Zealand study) 0.54108

Table IV. Factor analysis solution for US sample

Potential perceptual The next step in the analysis was to examine the sample responses across
problem the factor items to assess the student perceptions of the attributes, the
importance of the factor groupings, and the perceptions of the students of
their own university. The results can be found in Table V. It is quite clear
when examining Table V that the US students have a potential perceptual
problem with their particular university. The only area where the students
appear to be getting what they expected is in terms of flexible admissions in
the Other factor (0.48 score). This was the single attribute that showed the
greatest positive level in the New Zealand sample as well. The biggest
problem areas appear to be the condition of the university academic facilities
(–1.48), the reputation of the degree from the university (–1.38), the
condition of the housing and services provided (–1.08), and the cost of
housing (–1.06). It is important to note here that specific perceptual
problems are identifiable using this methodology which then can be
improved to help the student develop a more positive view of the university.
This is especially important if the perceived rank importance of the factors
themselves is taken into consideration. These are found in Table III. The
order of importance for the US students is:
(1) academic reputation;
(2) cost/time issues;
(3) program issues;
(4) other;
(5) physical aspects; and finally by
(6) choice influencers.
This assessment is helpful to temper the findings from Table V, since it
would probably not be wise to focus too heavily on attributes which are not

180 THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999

 Summary of means
Performance
Category Importance Performance minus importance

Program issues
Range of programs of study 4.52 3.62 –0.09
Flexibility of degree program 4.17 3.39 –0.78
Major change flexibility 4.0 3.39 –0.61
Range of degree options 4.5 3.84 –0.66
Physical aspects
Sports programs 3.89 3.14 –0.75
Housing and services provided 3.89 2.81 –1.08
Campus layout and appearance 4.14 3.3 –0.84
Academic facilities 4.64 3.16 –1.48
Academic reputation
Quality of instructors 4.7 3.49 –1.21
Degree reputation 4.45 3.07 –1.38
Career placement information 4.67 4.03 –0.64
Internship/practical component 4.5 3.53 –0.97
Cost/time issues
Reasonable cost of education 3.55 3.04 –0.51
Reasonable time to degree 4.03 3.87 –0.16
Reasonable cost of housing 3.98 2.92 –1.06
Choice influencers
Influence from family members 3.5 2.62 –0.88
Influence of word-of-mouth 3.24 2.6 –0.64
Other
Flexible admissions 2.85 3.33 0.48
Ideal location 3.41 2.99 –0.42
Graduates are employable 4.08 3.29 –0.79

Table V. Student perceptual means for US sample

as important to the students in their overall assessment process. If the

university were to focus its efforts on physical aspects rather than on
cost/time issues, there would be an inefficient and probably ineffective
expenditure of university financial resources.
Overall educational As was done with the New Zealand sample, a question was also asked as to
experience how satisfied the student was with his/her overall educational experience.
The results for this question were somewhat surprising since the students
indicated a mean of 3.65, with 1 = very dissatisfied and 5 = very satisfied.
This positive result would again appear to support the concept of the “zone
of tolerance”. This would indicate that, while the students may not believe
that their university is everything that it should be, it is acceptable as long as
certain conditions are being met. These results would appear to mirror the
New Zealand results. This theory is further supported by the importance-
performance grid in Figure 2, which shows that only two of the categories
fall in the “keep up the good work” quadrant, but the respondents are still
satisfied with their educational experience. Practically, the results would
suggest that the US university should work on cost/time factors and
downplay physical aspects to enhance the perceptions of students as to their
“educational experience”.

Conclusions and implications

While intuitively there would appear to be few cultural differences between
New Zealand and the USA, there were some differences which would appear
to warrant follow-up analyses. The attributes that were developed from the
focus groups did hold over the two country business student samples. It is

THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999 181

 Extremely Concentrate Keep up the
important here good work
3.58 A

3.53 C

3.28
D

3.2115

3.20 F

3.10 B

2.61 E
Moderately Low Possible
important Priority Overkill
3.37 3.44 3.88 4.0355 4.14 4.2975 4.58

Fair Good
Performance Performance

Key
A Programme Issues
B Physical Aspects
C Academic Reputation
D Cost/Time
E Choice Influences
F Other

Figure 2. Importance-performance grid, US student sample

interesting to note, however, that the factors themselves did not correspond.
There was a significantly different factor structure. The necessary models for
examining service quality in educational institutions would contain the same
attributes, but these attributes would group differently into underlying
dimensions. This is important from a strategic perspective. First, it would
suggest that trying to develop a single model of important facts to apply
cross-culturally might be a mistake. It is therefore possible that the attributes
might be appropriate for cross-cultural settings but the factor structures
would need to be assessed for each country sample without any a priori
attempts to partition them into underlying factors. A questionnaire could
certainly be developed which might be tested across countries/cultures, but
there should be no designation of grouped factors for purposes of importance
weightings as would be found in the SERVQUAL approach used by
Parasuraman et al. (1991). Each individual attribute should therefore be
ranked for importance weighting purposes. It would then be possible to look
at weighted factor rankings after the factor structure was determined for any
new country/culture sample. It would also be prudent to assess the
applicability of the attributes themselves in new survey locations to ensure
their appropriateness in any final assessment.
Relevant for any service The resulting models and grids that can come from this process can be
industry strategically relevant for any service industry competitor. This type of
assessment vehicle is a promising tool for university administrators, since it
allows the mechanism by which past, current, and potential service
consumers’ perceptions can be examined, and it allows for possible
corrective actions which can be taken to improve perceptual problems. This
potentially could help any service provider to improve its image to the point
where the service consumer actually changes from a negative or neutral
perception to a positive perception of their overall service experience. This
could be an effective competitive tool in any highly competitive service
market situation, and in this case, for institutions of higher education. It
might also be possible for the service provider through a periodic use of this

182 THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999

 methodology to identify potentially troubling perceptions before they
actually become critical since it has often been found that a problem in
image does not necessarily show up immediately in negative actions being
taken.
Perceptions of A strategic benefit to the use of this type of methodology would also lie in
non-consumers the assessment of the perceptions of non-consumers regarding the image of
the particular service provider. In the example of educational institutions
herein, this would be important when used with high school seniors and
juniors about to apply to universities or with the employers who hire the
students who graduate from the university as well as members of the
community to see how they perceive the university.
Neither of these sample populations appears to be getting what they expect
from their educational experience, and this may indicate an even larger scale
problem in both the countries involved.

Limitations and suggestions for future research

Appropriate strategic It should of course be mentioned here that the respondents were drawn from
decisions convenience samples of business students and further research is needed
with broader and more randomized samples. More work is also warranted
with focus groups of all the different constituencies of importance to the
university to ensure that the proper attributes are being included in the
questionnaires that are developed. It is also deemed important to conduct
further research into the parameters of the students’ “zones of tolerance”.
Finally, it is reasonable to assume that a tempering of student desires with
practical resource restrictions would also be important for universities in
order to make appropriate strategic decisions when perceptions of employers
and community members are also taken into consideration.

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 This summary has been
provided to allow
managers and executives
a rapid appreciation of
the content of this
article. Those with a
particular interest in the
topic covered may then
read the article in toto to
take advantage of the
more comprehensive
description of the
research undertaken and
its results to get the full
benefit of the material
present
THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999
Executive summary and implications for managers and executives
Universities are service businesses – albeit with different objectives
Ford et al. begin the report on their study by noting that the market for
higher education – especially in management and business-related courses –
has become more competitive. This competitive market drives the various
institutions to adopt a more market-oriented focus in order to maintain
student numbers and sustain the university “economy”.
Given this change to the position of the university in society, it becomes
necessary to understand the nature and quality of the service offered. Ford
et al. examine a range of attributes pertaining to universities and their
product with the intention of establishing where the institutions should focus
their efforts. In studying these attributes, Ford et al. also assess whether the
relative importance of attributes transfers across cultures.
In assessing the management implications of Ford et al.’s study we need to
appreciate a couple of important facts about higher education:
(1) Universities and colleges have a public service function. The interest of
national and local government in the provision of higher education
means that in most situations the university must pay heed to public
policy issues as well as the business of selling places on courses. For
many universities the contribution of government funding overwhelms
other sources of income.
(2) Universities are not “normal” businesses. The impact of government
policies and funding is one factor influencing the strategies of the
university. In addition we cannot compare the objectives of a university
to those of a business. In the main, universities do not have shareholders
expecting a return on their investment, meaning that the profit
motivation is all but absent. Furthermore, the conflict between research
and teaching means that we are unable to measure a university course
on the basis of its teaching performance alone. Crucially, students are
not the only reason for universities existing.
Given these differences, it is not surprising that models developed for
“traditional” businesses are often difficult to apply to the context of higher
education. This is not, of course, to say that the concepts such as service
quality and customer focus have no relevance to the university but to note
that the way they relate to strategies will be different.
National culture and the university
It is indisputable that universities and colleges form a key part of national
culture. In many ways the attitude of the population to higher education, the
priorities set for the universities and colleges and the policies of
governments reflect the role expected of the university. However, as Ford
et al. show, students in the institutions studied do not always feel that they
receive the “service” they expect.
Moreover, the problems in service quality terms differ. Indeed Ford et al.
comment that “… trying to develop a single model of important facts to
apply cross-culturally might be a mistake”. We cannot assume that the
service quality issues in one country’s universities are the same as in
institutions elsewhere – and we must bear in mind that Ford et al.’s study was
in two similar cultures – the USA and New Zealand. Transference of models
to more distinct cultures clearly represents a risk that the result will be
inaccurate or misleading.
185
 The result of this finding is that, yet again, we find it difficult to generalise
about service quality across cultures and business sectors. Either the service
quality measure is too general to be much use to managers or else we need
to develop a “model” that is specific to the culture and sector studied. This
latter approach may be practical for a manager but raises questions about
the validity of service quality measures as a means of comparing
performance between organizations.
Competing for students – the real challenge facing universities
Universities now attract a broader range of students – the mature student
with work experience represents a larger proportion of the student body.
Such students are more career focused, more likely to be local to the
university and more concerned about the quality of teaching and the
university’s facilities than the traditional student straight from high school.
Linked to this change are the changes to funding. National and local
government, while still providing a significant part of higher education
funding, has withdrawn from many areas of finance. As a result the higher
education sector competes for students in a more diverse marketplace.
Students seek more flexibility in entrance requirements – five years in a
marketing department, in the eyes of most applicants, is as valid a
qualification as exam results at school. Moreover, the mature students are
far more likely to be paying their own way (or are funded by employers) and
are therefore less tolerant of poor teaching or tatty facilities.
Service quality is an important factor and it is right that universities seek to
assess the quality of what they provide. With students paying for their own
education (either now or through loans), we can expect that the pressures to
improve quality will become ever greater. Identifying the main factors
influencing student attitudes represents a step that all universities – and
departments within universities – must take if they are to sustain their
market position.
While few universities are threatened by closure, any continued failure to
deliver high quality service as well as the right mix of practical and
academic education will undermine an institution’s position, making it less
attractive. The result could be that questions would arise about the
maintenance of an institution that manifestly fails its customers. Such
questions threaten research as well as the funding of teaching.

(A précis of the article “Importance-performance analysis as a strategic tool

for service marketers: the case of service quality perceptions of business
students in New Zealand and the USA”. Supplied by Marketing Consultants
for MCB University Press.)

186 THE JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 2 1999