Service quality gap model and quality dimensions

Name : Abhishek purohit Section: A Prn .no: 11021021004 Subject: Marketing of financial services Project: Customer defection and managing customer complaints

DECLARATION

I, Abhishek Purohit student of BBA 5th Semester of SCMS NOIDA, hereby declare that the Project on service quality gap model and dimensions for the partial fulfillment of course objectives for the BBA Degree.

I assure that this project is the result of my own efforts and all the information and facts furnished in this Project are based on our intensive study.

ACKNOWLEDGEMENT

I, Abhishek Purohit express our sincere gratitude to Mr Nittin mahlotra for giving me the opportunity to work under his guidance on the project, entitled service quality gap model and dimensions.

I am grateful to other friends for their valuable suggestions in the execution of project work.

I am also thankful to other staff that guided and helped me very kindly at each and every step whenever I required.

I also acknowledge & convey thanks to the library staff, computer department for their kind and valuable support.

Date: 20/9/2013 Name:Abhishek Purohit Place: Noida

Service quality is a comparison of expectations with performance. A business with high service quality will meet customer needs whilst remaining economically competitive. Improved service quality may increase economic competitiveness. This aim may be achieved by understanding and improving operational processes; identifying problems quickly and systematically; establishing valid and reliable service performance measures and measuring customer satisfaction and other performance outcomes.

Definition
From the viewpoint of business administration, service quality is an achievement in customer service. It reflects at each service encounter. Customers form service expectations from past experiences, word of mouth and advertisement. In general, Customers compare perceived service with expected service in which if the former falls short of the latter the customers are disappointed. For example, in the case of TAJ Hotels, Resorts and Palaces, wherein TAJ remaining the old world, luxury brand in the five-star category, the umbrella branding was diluting the image of the TAJ brand because although the different hotels such as Vivanta by Taj- the four star category, Gateway in the three star category and Ginger the two star economy brand, were positioned and categorised differently, customers still expected the high quality of Taj from all their properties. The accurate measurement of an objective aspect of customer service requires the use of carefully predefined criteria. The measurement of subjective aspects of customer service depends on the conformity of the expected benefit with the perceived result. This in turns depends upon the customer's expectation in terms of service, they might receive and the service provider's ability and talent to present this expected service. Successful Companies add benefits to their offering that not only satisfy the customers but also surprise and delight them. Delighting customers is a matter of exceeding their expectations. Pre-defined objective criteria may be unattainable in practice, in which case, the best possible achievable result becomes the ideal. The objective ideal may still be poor, in subjective terms. Service quality can be related to service potential (for example, worker's qualifications); service process (for example, the quickness of service) and service result (customer satisfaction).

Dimensions of service quality

A customer's expectation of a particular service is determined by factors such as recommendations, personal needs and past experiences. The expected service and the perceived service sometimes may not be equal, thus leaving a gap. The service quality model or the GAP model developed by a group of authors- Parasuraman, Zeithaml and Berry at Texas and North Carolina in 1985 , highlights the main requirements for delivering high service quality. It identifies five gaps that cause unsuccessful delivery. Customers generally have a tendency to compare the service they 'experience' with the service they 'expect' . If the experience does not match the expectation , there arises a gap. Ten determinants that may influence the appearance of a gap were described by Parasuraman, Zeithaml and Berry. in the SERVQUAL model: reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding the customer and tangibles. Later, the determinants were reduced to five: tangibles; reliability; responsiveness; service assurance and empathy in the so called RATER model.

Measuring service quality

Measuring service quality may involve both subjective and objective processes. In both cases, it is often some aspect of customer satisfaction which is being assessed. However, customer satisfaction is an indirect measure of service quality.

Measuring subjective elements of service quality

Subjective processes can be assessed in characteristics (assessed be the SERVQUAL method); in incidents (assessed in Critical Incident Theory) and in problems (assessed by Frequenz Relevanz Analyse a German term. The most important and most used method with which to measure subjective elements of service quality is the Servqual method.

Measuring objective elements of service quality

Objective processes may be subdivided into primary processes and secondary processes. During primary processes, silent customers create test episodes of service or the service episodes of normal customers are observed. In secondary processes, quantifiable factors such as numbers of customer complaints or numbers of returned goods are analysed in order to make inferences about service quality.

Approaches to the improvement of service quality

In general, an improvement in service design and delivery helps achieve higher levels of service quality. For example, in service design, changes can be brought about in the design of service products and facilities. On the other hand, in service delivery, changes can be brought about in the service delivery processes, the environment in which the service delivery takes place and improvements in the interaction processes between customers and service providers.

Various techniques can be used to make changes such as: Quality function deployment (QFD); failsafing; moving the line of visibility and the line of accessibility; and blueprinting.

INTRODUCTION TO SERVICE QUALITY

As per the gap model given by Persuraman & Zeithaml there exists a gap between the customer perception & customer expectation Customer Expectation represents the actual expected service & Customer Perception revels the actual received service Customer expectations are the standards against which the perceived services are checked in order to assess the quality of a service. This basically gives what is expected & what is actually received. If any difference exists between the expected service and actually received service then that difference is called as a gap, which needs to be reduced.

CUSTOMER RETENTION THROUGH QUALITY IMPROVEMENT

Customer retention is the activity that a selling organization undertakes in order to reduce customer defections. Successful customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship. A companys ability to attract and retain new customers, is not only related to its product or services, but strongly related to the way it services its existing customers and the reputation it creates within and across the marketplace.

Customer retention is more than giving the customer what they expect, its about exceeding their expectations so that they become loyal advocates for your brand. Creating customer loyalty puts customer value rather than maximizing profits and shareholder value at the center of business strategy.[1] The key differentiator in a competitive environment is more often than not the delivery of a consistently high standard of customer service.

Standardization of customer service

Published standards exist to help organizations deliver process driven customer satisfaction in order to increase the lifespan of a customer. The International Customer Service Institute (TICSI) has released The International Standard for Service Excellence (TISSE 2012). TISSE 2012 enables organizations to focus their attention on delivering excellence in the management of customer service, whilst at the same time providing recognition of success through a 3rd Party certification scheme. TISSE 2012 focuses an organizations attention on delivering increased customer satisfaction by helping the organization through a Service Quality Model. TISSE Service Quality Model uses the 5 P's - Policy, Processes, People, Premises, Product/Service, as well as performance measurement. The implementation of a customer service standard leads to improved customer service practices, underlying operating procedures and eventually, higher levels of customer satisfaction, which in turn increases customer loyalty and customer retention.

LINK BETWEEN SERVICE QUALITY AND PRODUCTIVITY

After companies determine customer needs, they must concentrate on meeting those needs by yielding high quality products at an efficient rate. Companies can improve quality and productivity by securing the commitments of all three levels of management and employees as follows:

Toplevel management: Implement sound management practices, use research and development effectively, adopt modern manufacturing techniques, and improve time management.

Middle management: Plan and coordinate quality and productivity efforts.

Lowlevel management: Work with employees to improve productivity through acceptance of change, commitment to quality, and continually improving all facets of their work.

Productivity is the relationship between a given amount of output and the amount of input needed to produce it. Profitability results when money is left over from sales after costs are paid. The expenditures made to ensure that the product or service meets quality specifications affect the final or overall cost of the products and/or services involved. Efficiency of costs will be an important consideration in all stages of the market system from manufacturing to consumption. Quality affects productivity. Both affect profitability. The drive for any one of the three must not interfere with the drive for the others. Efforts at improvement need to be coordinated and integrated. The real cost of quality is the cost of avoiding nonconformance and failure. Another cost is the cost of not having qualityof losing customers and wasting resources.

As long as companies continually interact with their customers and various partners, and develop learning relationships between all levels of management and employees, the levels of productivity and quality should remain high.

DEFINING SERVICE QUALITY

Quality is a much more complicated term than it appears. Dictionary definitions are usually inadequate in helping a quality professional understand the concept. It seems that every quality expert defines quality is a somewhat different way. There are a variety of perspectives that can be taken in defining quality (e.g. customer's perspective, specification-based perspective). Are there commonalities among these definitions? Is any one definition "more correct" than the others? Is one quality expert "right" and the others "wrong"? Quality professionals constantly debate this question. The editors of Quality Digest say that defining the word "quality" is "no simple endeavor." They asked, in their December 1999 issue, for readers to send them their definitions of quality to be gathered and posted on Quality Digest Online. A modern definition of quality derives from Juran's "fitness for intended use." This definition basically says that quality is "meeting or exceeding customer expectations." Deming states that the customer's definition of quality is the only one that matters. So, who is the customer? Thought-provoking question: Who are the customers for higher education? External customers usually come to mind first. These are the people outside our organization who receive our goods and services. But even here there is some confusion. If we sell our products to a wholesaler, is he our only customer? How about the retailer and the ultimate consumer? Internal customers are often forgotten or taken for granted. In an assembly line operation, the next station downstream from ours is an internal customer for our work. The Purchasing Dept. who receives a control report from the Accounting Dept. is the Accounting Dept's. internal customer. Second grade teachers are internal customers for first grade teachers.

Transcendent quality can only be determined by empirical experiences, e.g. we can only judge the work of a fine artist (the work quality) if we look at his work. Product-based approach: quality is defined by the existence or lack of certain characteristics. If the product or quality from the viewpoint of the person making the judgment has advantageous, desirable characteristics, the customer will find it a high quality product or service.

Manufacturing-based approach: quality means that the product or the service in the course of manufacturing conforms to the predetermined expectations and specifications. If the specifications are not met, the quality is poor. This approach presumes that the product or service specifications are closely connected to the buyers` expectations, and compliance with those will determine customer satisfaction. User-based approach: quality is determined by the user. Meeting the costumer`s expectations is the central criteria of the concept of quality. This approach is parallel to the marketing concept of Kotler (1998), which states that the primary objective of an organization is to fully satisfy the customer. Value-based approach: quality is determined by the rate of the efforts, the customer must exercise to receive the service or to possess the product (e.g. money, searching) and the gain (value) derived from using the service or acquiring the product. Acquiring a certain product at a reasonable price will make the customer perceive that quality is higher (feeling that it is worth it), than purchasing the same product at a high price

SERVICE QUALITY DIMENSIONS

After extensive research, Zeithaml, Parasuraman and Berry found five dimensions customers use when evaluating service quality. They named their survey instrument SERVQUAL.

In other words, if providers get these dimensions right, customers will hand over the keys to their loyalty. Because theyll have received service excellence. According to whats important to them.

The five SERVQUAL dimensions are:

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 convey trust and confidence EMPATHY-Caring, individualized attention the firm provides its customers

The 5 Service Dimensions Customers Care About

RELIABILITY: Do what you say youre going to do when you said you were going to do it. Customers want to count on their providers. They value that reliability. Dont providers yearn to find out what customers value? This is it.Its three times more important to be reliable than have shiny new equipment or flashy uniforms. Doesnt mean you can have ragged uniforms and only be reliable. Service providers have to do both. But providers first and best efforts are better spent making service reliable.

Whether its periodics on schedule, on-site response within Service Level Agreements (SLAs), or Work Orders completed on time.

RESPONSIVENESS: Respond quickly, promptly, rapidly, immediately, instantly. Waiting a day to return a call or email doesnt make it. Even if customers are chronically slow in getting back to providers, responsiveness is more than 1/5th of their service quality assessment. Service providers benefit by establishing internal SLAs for things like returning phone calls, emails and responding on-site. Whether its 30 minutes, 4 hours, or 24 hours, its important customers feel providers are responsive to their requests. Not just emergencies, but everyday responses too. REPORTING RESPONSIVENESS Call centers typically track caller wait times. Service providers can track response times. And their attainment of SLAs or other Key Performance Indicators (KPIs) of responsiveness. This is great performance data to present to customers in Departmental Performance Reviews.

ASSURANCE: Service providers are expected to be the experts of the service theyre delivering. Its a given. SERVQUAL research showed its important to communicate that expertise to customers. If a service provider is highly skilled, but customers dont see that, their confidence in that provider will be lower. And their assessment of that providers service quality will be lower. RAISE CUSTOMER AWARENESS OF YOUR COMPETENCIES Service providers must communicate their expertise and competencies before they do the work. This can be done in many ways that are repeatedly seen by customers, such as:

Display industry certifications on patches, badges or buttons worn by employees Include certification logos on emails, letters & reports Put certifications into posters, newsletters & handouts

By communicating competencies, providers can help manage customer expectations. And influence their service quality assessment in advance. EMPATHY: Services can be performed completely to specifications. Yet customers may not feel provider employees care about them during delivery. And this hurts customers assessments of providers service quality.

For example, a day porter efficiently cleans up a spill in a lobby. However, during the clean up doesnt smile, make eye contact, or ask the customer if there is anything else they could do for them. In this hypothetical the providers service was performed fully. But the customer didnt feel the provider employee cared. And its not necessarily the employees fault. They may not know how theyre being judged. They may be overwhelmed, inadequately trained, or disinterested. SERVICE DELIVERY MATTERS Providers service delivery can be as important as how it was done. Provider employees should be trained how to interact with customers and their end-users. Even a brief session during initial orientation helps. Anything to help them understand their impact on customers assessment of service quality. TANGIBLES: Even though this is the least important dimension, appearance matters. Just not as much as the other dimensions. Service providers will still want to make certain their employees appearance, uniforms, equipment, and work areas on-site (closets, service offices, etc.) look good. The danger is for providers to make everything look sharp, and then fall short on RELIABILITY or RESPONSIVENESS. Customers assessments include expectations and perceptions across all five SERVQUAL dimensions. Service providers need to work on all five, but emphasize them in order of importance. If sacrifices must be made, use these dimensions as a guide for which ones to rework. Also, providers can use SERVQUAL dimensions in determining specific customer and site needs. By asking questions around these dimensions, providers can learn how they play out at a particular location/bid opportunity.

THE GAP MODEL OF SERVICE QUALITY

History of the Gaps Model
The gaps model of service quality was first developed by a group of authors, Parasuraman, Zeithaml, Berry, at Texas A&M and North Carolina Universities, in 1985 (Parasuraman, Zeithaml & Berry). Based on exploratory studies of service such as executive interviews and focus groups in four different service businesses the authors proposed a conceptual model of service quality indicating that consumers perception toward a service quality depends on the four gaps existing in organization consumer environments. They further developed in-depth measurement scales for service quality in a later year (Parasuraman, Zeithaml, Berry, 1988).

Theory of the Gaps Model

Perceived service quality can be defined as, according to the model, the difference between consumers expectation and perceptions which eventually depends on the size and the direction of the four gaps concerning the delivery of service quality on the companys side (Fig. 1; Parasuraman, Zeithaml, Berry, 1985). Customer Gap = f (Gap 1, Gap 2, Gap 3, Gap 4) The magnitude and the direction of each gap will affect the service quality. For instance, Gap 3 will be favourable if the delivery of a service exceeds the standards of service required by the organization, and it will be unfavourable when the specifications of the service delivered are not met.

Fig. 1: The Integrated Gaps Model of Service Quality

(Parasuraman, Zeithaml, Berry 1985)

The key points for each gap can be summarized as follows: Customer gap: Gap 1: Gap 2: Gap 3: Gap 4: The difference between customer expectations and perceptions the service quality gap. The difference between what customers expected and what management perceived about the expectation of customers. The difference between managements perceptions of customer expectations and the translation of those perceptions into service quality specifications and designs. The difference between specifications or standards of service quality and the actual service delivered to customers. The difference between the service delivered to customers and the promise of the firm to customers about its service quality

Applications of the Gaps Model

First of all the model clearly determines the two different types of gaps in service marketing, namely the customer gap and the provider gaps. The latter is considered as internal gaps within a service firm. This model really views the services as a structured, integrated model which connects external customers to internal services between the different functions in a service organization. Important applications of the model are as follows:

Fig. 2: The 10 determinants of service quality (Parasuraman, Zeithaml, Berry, 1985).

1. The gaps model of service quality gives insights and propositions regarding customers perceptions of service quality. Customers always use 10 dimensions to form the expectation and perceptions of service quality (Fig. 2). The model helps predict, generate and identify key factors that cause the gap to be unfavourable to the service firm in meeting customer expectations.

2.

3.

CONSUMER PERCEPTION OF TECHNICAL AND FUNCTIONAL QUALITY MODEL

QUALITY AND SATISFACTION
Parasuraman et al. (1985) defined service quality as the global evaluation or attitude of overall excellence of services. So, service quality is the difference between customers expectation and perceptions of services delivered by service firms. Nitecki et al. (2000) defined service quality in terms of meeting or exceeding customer expectations, or as the difference between customer perceptions and expectations of service.As the research is focused on examining major users of CJCU Library, the library service quality is defined as the overall excellence of library services that satisfy users expectation Kotler (1996) defined customer satisfaction as the level of a persons felt state resulting from comparing a products perceived performance or outcome in violation to his/her own expectations. So, customer satisfaction could be considered a comparative behavior between inputs beforehand and post obtainments. As the study focused on investigating user satisfaction of libraries, customer satisfaction is defined as the levels of service quality performances that meets users expectations Ruyter et al. (1997) modified the SERVQUAL scale and empirically tested the health care service of chiropractic care, attempting to determine the relationship between service quality and customer satisfaction. The results suggest that service quality should be treated as an antecedent of customer satisfaction. Brady et al. (2001) employed LISREL analysis to study customers of fast-food restaurants in America and Latin America. The results indicated that there was a certain relationship between service quality and customer satisfaction based on different cultural background. In addition, service quality had significantly impacts on customer satisfaction. Sureshchandar et al. (2002) found that service quality and customer satisfaction were highly related

SETTING QUALITY STANDARDS

The Customer Gap: The Gap between Customer Expectations and Customer Perceptions
The customer gap is the difference between customer expectations and customer perceptions. Customer expectation is what the customer expects according to available resources and is influenced by cultural background, family lifestyle, personality, demographics, advertising, experience with similar products and information available online. Customer perception is totally subjective and is based on the customers interaction with the product or service. Perception is derived from the customers satisfaction of the specific product or service and the quality of service delivery. The customer gap is the most important gap and in an ideal world the customers expectation would be almost identical to the customers perception.

In a customer orientated strategy, delivering a quality service for a specific product should be based on a clear understanding of the target market. Understanding customer needs and knowing customer expectations could be the best way to close the gap.

The Knowledge Gap: The Gap between Consumer Expectation and Management Perception
The knowledge gap is the difference between the customers expectations of the service provided and the companys provision of the service. In this case, managers are not aware or have not correctly interpreted the customers expectation in relation to the companys services or products. If a knowledge gap exists, it may mean companies are trying to meet wrong or nonexisting consumer needs. In a customer-orientated business, it is important to have a clear understanding of the consumers need for service. To close the gap between the consumers expectations for service and managements perception of service delivery will require comprehensive market research.

The Policy Gap: The Gap between Management Perception and Service Quality Specification
According to Kasper et al, this gap reflects managements incorrect translation of the service policy into rules and guidelines for employees. Some companies experience difficulties translating consumer expectation into specific service quality delivery. This can include poor service design, failure to maintain and continually update their provision of good customer service or simply a lack of standardisation. This gap may see consumers seek a similar product with better service elsewhere.

The Delivery Gap: The Gap between Service Quality Specification and Service Delivery
This gap exposes the weakness in employee performance. Organisations with a Delivery Gap may specify the service required to support consumers but have subsequently failed to train their employees, put good processes and guidelines in action. As a result, employees are ill equipped to manage consumers needs. Some of the problems experienced if there is a delivery gap are:

Employees lack of product knowledge and have difficulty managing customer questions and issues Organisations have poor human resource policies Lack of cohesive teams and the inability to deliver

The Communication Gap: The Gap between Service Delivery and External Communications
In some cases, promises made by companies through advertising media and communication raise customer expectations. When over-promising in advertising does not match the actual service delivery, it creates a communication gap. Consumers are disappointed because the promised service does not match the expected service and consequently may seek alternative product sources.

Understanding Customer Needs

From the time the consumer starts to shop at Amazons online store, Amazon will attempt to understand their expectations. From when a customer first makes a product selection Amazon creates a consumer profile and attempts to offer alternative goods and services that may delight the consumer. The longer the consumer shops at Amazon, the more the company attempts to identify their preferences and needs.

Customer Defined Standards

When a consumer buys a product from Amazon they selects the mode of delivery and the company tells them the expected number of days it will take to receive their merchandise. For example: standard shipping is three to five days but shipping in one or two days is also available. The company has set standards for how quickly customers are informed when a product is unavailable (immediately), how quickly customers are notified whether an out of print book can be located (three weeks), how long customers are able to return items (30 days) and whether they pay return shipping costs. These standards exist for many activities at Amazon from delivery to communication to service recovery.

Service Performance
Apart from defining their service delivery, Amazon goes one step further and delivers on its promises. Amazon performs! Orders often arrive ahead of the promised dates; orders are accurate and are in excellent condition because of careful shipping practice. Customers can track packages and review previous orders at any time. Amazon also makes sure that all its partners who sell used and new books and other related items meet Amazons high standards. The company verifies the performance of each purchase by surveying the customer and posting scores that are visible to other customers.

Managing promises is handled by clear and careful communication on the website. Every page is very easy to understand and to navigate. For example the page dealing with returns eliminates customer misunderstanding by clearly spelling out what can be returned. The page describes how to repack items and when refunds are given. The customer account page shows all previous purchases and exactly where every ordered item is in the shipping process Amazon strategy has been well received by its customers and the Amazon brand is known worldwide.

Conclusion
Effective product management is a complex undertaking which includes many different strategies, skills and tasks. Product managers plan for creating the best products and operational excellence to maximize customer satisfaction, loyalty and retention. Recognising and closing gaps offers high quality customer service to the consumer and helps them to achieve their goal whilst maximising market position, market share and financial results through customer satisfaction. It also helps managers to identify areas of weakness and make improvements to a companys service delivery. Check out our blog post on The Value Curve: visualising the value proposition. This tool allows product managers to take information gleaned from gap analysis to develop or refine products that are both compelling to customers and distinct from competitors.