2010

SERVICE QUALITY
MANAGEMENT

Neel Nadkarni
Department of Mechanical
Engineering Indian Institute of
Technology Gandhinagar
11/22/2010
 CONTENTS

1. INTRODUCTION: Service Quality – Is it really essential?

 What is Service?
 What is meant by the term Quality?
 Why Service Quality

2. DIMENSIONS OF SERVICE QUALITY

 Reliability
 Responsiveness
 Assurance
 Empathy
 Tangibles

3. PERCEIVED SERVICE QUALITY

4. ANALYZING SERVICE QUALITY IMPROVEMENT – SERVICE

GAP MODEL AND THE FOUR GAPS

 GAP 1: Difference between Consumer Expectations and

Management and Management Perceptions of Consumer
Expectations
 GAP2: Difference between Management Perceptions of
Consumer Expectations and Service Standards
 GAP 3: Difference between Service Standards and Service
Delivery
 GAP 4: Difference between Service Delivery and Consumer
Perceptions

5. CONCLUSION
INTRODUCTION: Service Quality – Is it really essential?
Service quality is a concept essentially made of two individual words
service and quality. So before we can understand the concept of
service quality, it is more important to understand its components
service and quality. Thus let us have a look at the individual
components to give us a better idea of the terminology of service
quality.

1. WHAT IS SERVICE?
So, what does it imply to have a service offered by a company? It is a
type of economic activity that is intangible, is not stored and does not
result in ownership unlike a product. A service is consumed completely
at the point of sale, whereas a product may or may not be consumed
at the point of sale. Thus examples of services would be accounting,
banking, technical know-how and other terms which do not have a
physical significance and yet are equally important with respect to
their physical counterparts. As we are more conversant with products
rather than services, a comparative study of the two would give a
better idea of the term ‘services’. Thus the differences between the
various aspects of the two are as follows:-

SR NO PRODUCTS SERVICES
1 Products are tangible Services are intangible
2 Products can be bought Services can be felt
3 Products are non-perishable Services are perishable
4 Products are non-ephemeral Services are ephemeral
5 Products are countable Services are not countable
6 Products can be owned Service cannot be owned

2. WHAT IS MEANT BY THE TERM ‘QUALITY’?

Quality is a word that enjoys widespread usage whilst failing to

capture an agreed definition. From established dictionaries quality is
defined as:
 Property, attribute, characteristic, mark, distinction
 Grade, caliber, rank, status, importance, value, worth
 Old fashioned eminence, prominence, excellence, superiority,
 distinction, supremacy
 General excellence of standard or level
 A distinctive attribute or characteristic possessed by someone or
something
 A level of superiority that is usually high
 Of superior grade

Not all, however, can afford the excellence and luxury in terms of
products and services, yet everyone has their own perception of
quality in the products and services which are affordable to them.
Based on the above statement, the definitions can be rejected or
suitably modified by stating the following counter-example. Consider
the example of two models of car: Mercedes and Renault Clio. If each
car conforms to its formally stated specifications and requirements
both are regarded as quality cars. Although the Mercedes will perform
at a higher level, both cars will in their own way meet and fulfill the
needs of their respective markets. So again, each is regarded as a
quality car. Therefore, to add to the confusion, quality can mean both
‘better’ and ‘cheaper’. Hence, one possible way of addressing this
apparent conundrum is to regard quality as the difference between
how things ought to be and how things are, or to put it more plainly in
respect of services.

Now we are in a position to define the term service quality based on

the above study. Put in a very simple manner, Service quality
encompasses the interactive relationship between a company and the
customer whom it is supposed to serve. Thus, again while defining the
term quality with respect to services, we have to define it with respect
to the person taken into consideration. Each individual might have his
own perception of service quality. Thus by defining it in a relative
sense, it becomes difficult to grasp and thus it becomes necessary to
convert it to an absolute scale.

3. WHY SERVICE QUALITY?

Quality customer service is a vital ingredient in a company's ability to
maintain profitability and continued success in business. Not only does
quality customer service build loyalty for both company and product
above all other forms of marketing, it almost guarantees a company's
viability in today's diverse and competitive market. The perception of
having received quality in customer service is important in the
decision-making process. Consumers want to have a memorable
shopping experience and the most important aspect of a consumer's
shopping experience is her perception of service. The single most
important aspect of a consumer's decision on where to shop is going
to be her perception concerning the quality of customer service she
receives is congruent with the level of respect and courtesy required
to earn and retain her loyalty as a contentious consumer. If an
organization fails to provide quality customer service, the likelihood of
that customer's continuing as a patron of the organization is highly
doubtful. A customer shops at the locations where he or she feels
comfortable and where the service provided is of the highest.

DIMENSIONS OF SERVICE QUALITY

The dimensions of service quality can be broken down into its
following dimensions:

Figure 1: Dimensions of Service Quality

SERVICE QUALITY

RELIABILITY RESPONSIVENESS ASSURANCE EMPATHY TANGIBLES

 SERVICE QUALITY

RELIABILITY RESPONSIVENESS ASSURANCE EMPATHY TANGIBLES

 RELIABILITY
This dimension deals with providing services which are guaranteed by
the company. It means performing promised services dependably and
accurately. Thus reliability is a measure of the satisfaction of the
customer in terms of the services which he expects and the one which
he receives.
Eg: Receiving a notification mail each day at the same time

 RESPONSIVENESS
This deals with the response of the service provider to the customers
in need of services. It depicts the promptness or eagerness of the
service provider to help the customer in getting what he desires.
Eg: Avoid keeping customers waiting for no apparent reason maybe on
account of laziness

 ASSURANCE
It is the ability of the service provider to convey trust and confidence
while supplying his service. He should be able to assure the customers
of quality which he proposes to provide.
Eg: Being polite and confident while communicating with customer

 EMPATHY
It is the ability of the provider to be approachable to the problems of
the customer. It depicts his virtue of understanding the problems of a
customer and then solving them efficiently.
Eg: A virtue of a service provider would be to be a good listener which
will help him understand the problems faced by the customer.
 TANGIBLES
It refers to all the physical things which are provided by the service
provider apart from the services which are given. It assures that the
ambience in the place where the customer would enter to avail the
services of the provider should be welcoming.
Eg: The cleanliness of the place of the provision

Thus, a service provider must ensure that all the above dimensions
are provided by him to ensure customer satisfaction. In order to
achieve this aim, he must follow certain guidelines which are
discussed in this report.

PERCEIVED SERVICE QUALITY

Figure 2: Quality Assessment Diagrams

This quality evaluation is from the standpoint of the customer. A new

or an existing customer before he can avail the services has a rough
idea of the service which he might be offered. This may be through
various means such as by word of mouth (by the prior experiences of
his acquaintance, colleague, etc) or his personal needs or by his past
experience if he is an already existing customer. This comprises the
Expected Service which he assumes that will be offered when he
approaches the service provider. The actual experience which he gains
from the experience of the service being actually provided becomes a
critical factor of customer satisfaction which is termed as Perceived
Service. The dimensions of service quality offered are the most
important factors which affect the service quality assessment of the
customer. If the expected service surpasses, equals or is less than the
perceived service he gets a quality surprise, a quality satisfaction or
unacceptability in quality. The reaction of the customer is extremely
valuable as it creates a chain reaction in terms of creating the new
threshold of expected services of the service provider. This can be
considered as indirect marketing strategy whose output will depend
upon the customer satisfaction at each point of time. Hence this is a
key point which every company strives to perfect.

ANALYZING SERVICE QUALITY IMPROVEMENT –

SERVICE GAP MODEL AND THE FOUR GAPS
The expectations of the customers and the actual experience which
they receive can be actually modeled to form a service gap model.
The gaps indicate the quality which has not been delivered as per the
satisfactory or expected quality which is to be maintained. It provides
detailed information about:

 Customer perceptions of service (a benchmark established by your

own customers);
 Your performance levels as perceived by customers;
 Customer comments and suggestions;
 Impressions from employees with respect to customer expectations
and satisfaction.

The block diagram can be depicted as follows:-

 Figure 3: Service Gap Model

Gap 1: Difference between Consumer Expectations and Management

and Management Perceptions of Consumer Expectations.

Gap 2: Difference between Management Perceptions of Consumer

Expectations and Service Standards

Gap 3: Difference between Service Standards and Service Delivery

Gap 4: Difference between Service Delivery and Consumer

Perceptions

The fifth gap denotes the difference between the customer

perceptions and customer expectations. This gap can be represented
by the analysis of the other 4 gaps and thus the analysis of this gap is
not considered separately. The four gaps mentioned above can be
analysed as follows:

Gap 1: Difference between Consumer Expectations and Management and

Management Perceptions of Consumer Expectations
Service managers may not always understand the various features
which are connoted to the high quality too the consumers, what
attributes a service must mave in order to meet consumer needs, and
what levels of performance on those features that are necessary to
deliver high quality service. Because there are few clearly defined
cues for services, the gap between what consumers expect and the
services provided are completely different. This gap can be analysed
by the help of the following theoretical constructs:

 MARKETING RESEARCH ORIENTATION

It has been observed that the service firms are less likely to market
their services than the goods oriented companies. The service firms
are of the opinion that the services they provide will in turn act as a
marketing strategy in itself. Because of the various reasons by which
marketing research is important, it is one of the major factors
influencing the size of the gap 1. Marketing research is very important
as it gives a feedback from the consumer perspective. For example
suppose a bank closes down at a particular time which might be most
suited for the consumers, they are creating a depriciation in the
consumer satisfaction. If marketing research is used in this case, this
problem would be solved easily from the feedback received.

 UPWARD COMMUNICATION
The top managers may not have a complete idea as to what a
consumer expects but the contact person who is in direct
communication with the customer has a fairly good idea as to what
the customer expects. However the complete authority of changing
any existent structure of work is in the hands of the topmost manager.
Hence if something is not up to the mark in the quality which is
expected by a consumer and what he receives is not in harmony, the
top managers are rarely aware of the reasons. So, it is very important
that the communication gap between the manager and his
subordinates is as low as possible.

 LEVELS OF MANAGEMENT
The number of levels of managerial postions between the manager
and the contact person is very important. As the level of managerial
positions goes on increasing, the size of the communnication gap
between the manager and his subordinates goes on increasing.
Hence, it takes a larger time for an improvement to come into effect if
needed.
Gap 2: Difference between Management Perceptions of Consumer
Expectations and Service Standards

Managers of most service firms often experience difficulty in

attemptiing to match or exceed customet expectations due to a
variety of factors such as resource constraints, short-termprofut
orientation, market conditions, management indifference which may
account for the discrepancy between managers’ perceptions of
consumer expectations and the actual specifications as established by
the company. Hence the gap between the consumer expectations and
the service standards widens. The factors which are associated with
this gap are as follows:

 MANAGEMENT COMMITMENT TO SERVICE QUALITY

The management which is a part of the firm is actually more
interested in factors such as short-term goals and cost reduction, and
tends to be a little aloof from the point of view of service quality. Most
of the cases, the company tends to be more inclined to a product-
based approach rather than a user-based one thus making them a
deemphasized from satisfying the consumer. The specific variables
which are related to service quality include the proportion of resources
commited to service quality rather than to other goals, the existence
of an internal quality program, and the extent to which managers
believe their attempts to improve service quality will be recognized
and rewarded.

 GOAL SETTING
It has been observed that if the goals of the organization are clearly
defined it improves the overall performance and also the individual
achievement but also increases the control of the organization. The
goals are generally set with respect to service quality and are
mesaured in terms of human and machine performance. This is
extremely essential as the effort of the people is more focused toward
attaining a formal objective.

 TASK STANDARDIZATION
Task standardization is an important perspective which should be
analysed by every organization. This exercise helps the company in
being more focused and the tasks are more effectively executed. The
effective translation of managerial perceptions into specific service
quality standardsdepends on the degree to which tasks to be
performed can br standardized or routinized. Efforts to conceptualize
and measure the standardiztion of the tasks in organizational research
have focused on the construct of technology. Tasks have thus to be
standardized in terms of hard technology and in terms of soft
technology.

 PERCEPTIONS OF FEASIBILITY
Research has revealed that the size of the gap 2 to be affected by the
extent to which managers perceive that meeting customer
requirements is feasible. Therefore the greater the management filled,
the larger the gap 2 will be. Variables related to this construct include
the organizational capabilities and systems for meeting specifications
and the degree ro which managers believe expectstionas can be met
economically.

Gap 3: Difference between Service Standards and Service Delivery

Gap 3 is the discrepancy between the specifications for the service

and the actual delivery of the service. It can be referred to as the
“service performance gap” that is, the extent to which service
prviders do not perform at the level expected by management. The
service performance gap occurs when employees are unable and
unwilling to perform the services at the desired level. The following
factors determine the difference between service standards and
service delivery:

 TEAMWORK
This represents the extent to which employees view other employees
as customers. This represents the bonds which each of the co-workers
have with respect to each other. The extent to which contact
personnel feel they are co-operating (rather) than competing with
others in the organization. Hence this is a very important factor which
reduces the difference between service standards and service
delivery.

 EMPLOYEE-JOB FIT
Studies have indicated that service quality problems often occur
because contact personnel are not well suited to their positions.
Because customer-contact jobs tend to be situated at lower levels of
company organization charts, personnel holding these jobsare
frequently among the least educated and lowest paid employees in
their companies. As a resulr, they may lack language interpersonal or
other skillsto serve customers and hence the jobs should be given
appropriate to the qualifications of the employee.

 TECHNOLOGY-FIT JOB
Provision of high quality also depends on the appropriateness of the
tools or technology the employee uses to perform the job. Technology
and diagnostic equipment can enhance the service employee’s
performance. Appropriate and reliable technology must be provided
for high quality service delivery.

 PERCEIVED CONTROL
In includes the extent to which employees percieve they are in control
of their jobs, the extent to which customer-contact personnel feel they
have flexibility in dealing with customers and the predicability. These
factors grossly affect the predicatbility of demand.

Gap 4: Difference between Service Delivery and Consumer Perceptions

Media advertizing and other communications by a firm can affect

consumer expectations. Discrepancies between service delivery and
external communications in the form of exaggerated promises and the
absence of information about the service delivery asspects intended
to serve consumers well can affect consumer perceptions of service
quality. Thus the factors detemining this service gap is as follows:

 HORIZONTAL COMMUNICATION
Horizontal communcations are the lateral information flows that occur
both within and between departments of an organization. The basic
purpose of the horizontal communcation is to co-ordinate people and
departments so that the overall goals of the organization are
achieved. If high service quality is to be perceived by the consumer,
horizontal communication among the departments is necessary. One
essential form of horizontal communication in service organizations
involves the advertizing department and contact personnel. When the
communication occurs between contact personnel and the advertizing
personnel, consumers are led to expect what contact personnel can
deliver. Hence horizontal communication is an important means to
keep the service quality at high from the consumer perspective as
they would receive they are expecting to receive.

 PROPENSITY TO OVERCOME
Because of the increasing deregulation and intensifying competition in
the services sector, an intuitive explanation for gap 4 is that many
service firms fwwl pressured to acquire new business and to meet or
beat competition, and therefore tend to overcompromise. Specifically,
the greater the extent to which a service frim feels pressured to
generate new customers and perceives that the industry norm is to
overcompromise, the greater is the firm’s propensity to
overcompromise.

Thus the final model of the filled gaps of the entire SERVQUAL model
can be represented by the following diagram:
 Figure 4: Completed Gap model

CONCLUSION

The intent of this study thus explains the management of service

quality and its importance in enhancing the customer satisfaction.
From the study, we have structured a quality enhancement model and
analyzed the gaps within it. These gaps are the difference between
what the consumer expects and what he receives. By the analysis, we
have restructured the SERVQUAL model and formed a comprehensive
completed gap model to conclude our study.

REFERENCES

1. Valarie A. Zeithaml, Leonard L. Berry, A. Parsuraman,

“Communication and Control processes in the Delivery of Service
Quality”
2. Ruben Chumpitaz Caceres and Nicholas G. Paparoidamis,
“Service quality, relationship satisfaction, trust, commitment and
business-to-business loyalty”
3. R. Saravanan and K. S. P. Rao, “Service Quality: From the
Customer’s Perspective:An Empirical Investigation”