Service Quality I
HRT476
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Chapter 2. Discussion Points:
How to define service quality?
Explain service quality using Gap Analysis Model (GAM): How to fill each gap?
Five dimensions of Service Quality: Reliability, Tangibles, Empathy, Responsiveness, & Assurance: How to assess service quality using 5 dimensions of service quality?
=> Your individual research project us assessing service quality of a hospitality entity using Five Dimensions of Service Quality
AGENDA
What is Service Quality (SQ)?
Gap Analysis Model
Why is quality service important in the hospitality industry?
SERVQUAL
Five Dimensions of Service Quality
Service Quality
“Consumer’s judgment about an entity’s overall excellence or superiority” (Zeithaml, 1987)
“Customer’s overall evaluation of a product or service, similar to attitude” (Olshavsky, 1985)
“The result of evaluation process in which customers compare their perceptions of service delivery to that they expect” (Gronroos, 1990)
“Degree & direction of discrepancy between consumers’ ( ) & ( )” (PZB, 1988)
Perceptions
Expectations
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How to define service quality? You can try defining it by yourself.
Popular textbook definitions are introduced here….The last one “Degree & direction of discrepancy between consumers’ expectations and perceptions (PZB, 1988)” is the most popular one.
Customers build expectations before purchase, and get involved in the evaluation process after the consumption. The difference or gap between prior expectations and actual experiences, that is service quality.
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View of SQ & CS Process
Prepurchase
Expectation
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The gap between expectations and perceived performance is the primary indicator of overall service quality.
Expectation
“Desires & wants of customers”
Three levels of service expectations:
Essential (Predicted):
Essence of the service
Fundamental requirements to continue operations
Guests predict these services will be performed
Expected (Adequate):
Go beyond the essential service
Tend to become essential service over the years
Optional (Desired):
Added bonus or unique service enhancing the value of service
Contribute to its competitive edge
Guests do not fault the service provider for this service
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Customers build expectations in three levels: Essential, Expected, and Optional. Think about what types of expectations you make when making a hotel/restaurant reservation, and then categorize them using the three levels of service expectations.
Performance/Experience
Customers’ perceptions of firms providing the services
A product of a technical (what) and functional quality (how), which is filtered through the image
Standard of comparison by which to assess disconfirmation
After consumption of service or products, we evaluate our experience based on WHAT (product or technical quality) was delivered and HOW (functional quality) it was delivered.
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Disconfirmation/Discrepancy
Discrepancies/gap between prior expectations and actual performances
Size and direction influences SQ
Objective (Inferred) disconfirmation
Arithmetic difference between two components
Performance (6) – Expectation (5) = +1
Subjective (Perceived) disconfirmation
Asking respondents to directly compare
“Better than or worse than”
Size: how different?
Direction: positive or negative?
The size and direction of discrepancy affects service quality.
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Gap Analysis Model (GAM)
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Gap Analysis Model (GAM) or Gap Model is the most popular and widely accepted framework to explain the concept of Service Quality.
Please refer to an electronic handout about Gap Analysis Model (GAM).
Gap 1
(Consumer expectation vs Management perception)
“The Knowledge Gap”
Occurs when management does not understand what their customers want and need
How to reduce the gap?
=> Educate management about what customers expect
Sharpen market research procedures
Implement an effective customer feedback system
Increase interactions between customers and management
Encourage communication between front-line employees and management
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When management does not understand what their customers want, a gap 1 (between expected service and management perceptions of consumer expectation) exist. For example, a manager may develop a system to ensure that all guests wait no longer than 15 minutes to check in. However, if guests start getting upset after 10 minutes, this system will cause dissatisfaction.
Talking to guests before developing the check-in system would enable the manager to learn that the critical time was 10 minutes, not 10 minutes.
Managers should walk around their operations, talk to customers, and encourage feedback. Management can also gain information on customers from marketing information systems.
Gap 2
(Management perception vs Service quality specifications)
“The Policy Gap”
Occurs when managers know what their customers want but are unable to develop systems that will deliver it
How to reduce the gap?
=> Establish the right service processes and specify standards
Get the customer service process right
Develop tiered service products that meet customer expectations
Set, communicate, and reinforce measurable customer-oriented standards for all work units
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Gap 2 occurs when managers know what their customer want but are unable or unwilling to develop systems that will deliver it. Several reasons have been given for gap 2:
Inadequate commitment to service quality. Lack of perception of feasibility. Inadequate task standardization. Absence of goal setting.
Management commitment to service quality is essential. Capital or resources
Sometimes we need to look for unconventional solutions to the problem. Translating customer needs into service specifications is critical to service quality.
Goals must be accepted by employees. Management must show its support through measurement of results, communication, and rewarding employees for superior service.
Gap 3
(Service quality specifications vs Service delivery)
“Service Performance Gap/The Delivery Gap”
Occurs when management understands what needs to be delivered and appropriate specifications have been developed but employees are unable to deliver the service
How to reduce the gap?
=> Ensure that performance meets standards
Ensure that customer service teams are motivated and able to meet service standards (Internal marketing)
Install the right technology, equipment, support processes, and capacity
Manage and educate customers for service quality
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Gap 3 is referred to as the service-performance gap. Gap 3 occurs when management understands what needs to be delivered and appropriate specifications have been developed but employees are unable or unwilling to deliver the service.
Gap 3 errors occur when the employee and the customer interact. Management of the human resources functions (hiring, training, monitoring working conditions, and developing reward systems) is important in reducing gap 3 errors. Gap 3 occur are also the result of customer contact employees being overworked. This can occur when a business is understaffed. Under these conditions employees will become tired and stressed. They lose their enthusiasm for the job and become less solve customer problems.
Gap 4
(Service delivery vs External communications)
“The Communication Gap”
Occurs when the service provider promises more in its external communication than it can deliver
Failure of delivering what were promised
Lack of consistency
How to reduce the gap?
=> Close the internal communication gap by ensuring that promises are realistic and correctly understood by customers
Educate managers responsible for sales and marketing communications about operational capabilities
Ensure that communication content sets the realistic customer expectations
Be specific with promises and manage customers’ understanding of communication content
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Gap 4 is created when the firm promises more in its external communications than it can deliver. Lack of consistency can also cause gap 4 problems.
Gap 5
(External communications vs Perceived service)
“The Perception Gap”
Occurs when what is delivered to the customers is not what they expect. They are sometimes unable to accurately evaluate service quality.
How to reduce the gap?
=> Tangibilize and communicate the service quality delivered
Make service quality tangible and communicate the service quality delivered
Develop service environments and physical evidence cues
For complex services, keep customers informed during service delivery on what is being done
Provide physical evidence
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Even though service providers deliver the service seamlessly, Gap 5 can still occur because they have no/little control over customers. Customers may form their expectations levels inappropriately. They may not have enough knowledge and information about product and/or service. Thus, service providers keep tangiblizing service and educating/communicating customers about their services and products.
Gap 6
(Perceived service vs Expected service)
“The Service Quality Gap”
A function of previous gaps
How to reduce the gap?
=> Close Gaps 1 to 5 to consistently meet customer expectations
Gap 6 is the accumulated outcome of all the preceding gaps
Gap 6 can be closed when Gaps 1 to 5 have been addressed
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Gap 6 is a function of the others. As any of the other gaps increase in size, gap 5 also increases. It represents the difference between expected quality and perceived quality. The expected quality is what the guest expects to receive for the company. The perceived service is what the guest perceives he received for the company. If the guest receives less than he expected, the guest is dissatisfied.
Why is Service Quality Important?
Service quality has a direct impact on the ( ) and ( ), which, in turn, ultimately reflects on the service provider’s bottom line ( )
Improve guest convenience, comfort, & well-being
Ensure customer security = build trust & confidence
Enhance service provider’s image
Establish a competitive edge (difference maker)
Profits
customer satisfaction
customer loyalty
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Why is service quality important in our industry?
Tangible benefit: Profit
Intangible benefits:
Improve guest convenience, comfort, & well-being
Ensure customer security = build trust & confidence
Enhance service provider’s image
Establish a competitive edge (difference maker)
SERVQUAL
Parasuraman , Zeithaml, and Berry (PZB, 1988)
A multi-item (22-item) scale developed to assess customer perceptions of service quality (Bank, CC, Repair & Maintenance, & Telecommunication)
Represents service quality as the discrepancy between a customer’s expectations for a service offering and the customer’s perceptions of the service received
Widely used within service industry to understand the perceptions of target customers regarding their service needs
Five dimensions of service quality
SERVQUAL is the most important and widely accepted measure for Service Quality.
There are five dimensions in SERVQUAL. Please refer to an electronic handout about Five Dimensions of SQ.
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5 Dimensions of Service Quality
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Although scale items measuring hospitality service quality may vary depending on the specific end use, the same five service dimensions remain constant. The five dimension clearly appears to be the best and most consistent measure of service quality
Tangibles
Tangibles: “Appearance of physical facilities, equipment, personnel, and communication materials”
For restaurants
Has a visually attractive parking areas and building exterior
Has a visually attractive dining area
Has a staff members who are clean, neat, and appropriately dressed
Has a décor in keeping with its image and price range
Has a menu that is easily readable
Has a visually attractive menu that reflects the restaurant’s image
Has a dining area that is comfortable and easy to move around in
Has rest rooms that are thoroughly clean
Has dining areas that are thoroughly clean
Has comfortable seats in the dining room
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Measurement samples in the PPT slides are restaurant service quality. If you chose a hotel for the individual research project and look for some sample measurement items for hotels, please refer to an electronic handout about LODGSERV and 5 Dimensions of SQ.
Reliability
Reliability: “Ability to perform the promised service dependently & accurately. Providing service as promised”
For restaurants
Serves you in the time promised
Quickly corrects anything that is wrong
Dependable and consistent
Provides an accurate guest check
Serves your food exactly as you ordered it.
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Responsiveness
Responsiveness: “Willingness to help customers and provide prompt service. Ability to provide service in a timely manner (Today’s luxury is time)”
For restaurants
During busy times has employees shift to help each other maintain speed and quality of service
Provides prompt and quick service
Gives extra effort to handle guests’ special requests.
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Assurance
Assurance: “Knowledge and courtesy of employees & their ability to inspire customer trust & confidence”
For restaurants
Has employees who can answer your questions completely
Makes you feel comfortable and confident in your dealings with them
Has personnel who are both able and willing to give you information about menu items, their ingredients, and methods of preparation
Makes you feel personally safe
Has personnel who seem well-trained, competent, and experienced
Seems to give employees support so that they can do their jobs well
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Empathy
Empathy: “Caring, individualized attention the hotel provides its guests/customers”
For restaurants
Has employees who are sensitive to customers’ individual needs and wants, rather than always replying on policies and procedures
Makes you feel special
Anticipates customers’ individual needs and wants
Has employees who are sympathetic and reassuring if something is wrong
Seems to have customers’ best interest at heart
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Service Quality Dimensions
Relative importance of five dimensions in influencing the guest’s perceptions
“Reliability” is consistently the most critical dimension
Guests want dependability
Guests want utilities and equipments to work consistently
If a problem arises, they want it quickly corrected
They want services (wake-up call, room service) delivered on time
It is important for a hotel to promise only what they can provide – A promise sets an expectation level, which, if unmet, can result in a dissatisfied guest
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Among the 5 dimensions of service quality, the most important dimensions id Reliability. Delivering as promised, consistency, accuracy, dependability in other words, that is the most important attribute of service quality.
This is the end of Chapter 2.
*
Chapter 2. Discussion Points:
How to define service quality?
Explain service quality using Gap Analysis Model (GAM): How to fill each gap?
Five dimensions of Service Quality: Reliability, Tangibles, Empathy, Responsiveness, & Assurance: How to assess service quality using 5 dimensions of service quality?
=> Your individual research project us assessing service quality of a hospitality entity using Five Dimensions of Service Quality
*
How to define service quality? You can try defining it by yourself.
Popular textbook definitions are introduced here….The last one “Degree & direction of discrepancy between consumers’ expectations and perceptions (PZB, 1988)” is the most popular one.
Customers build expectations before purchase, and get involved in the evaluation process after the consumption. The difference or gap between prior expectations and actual experiences, that is service quality.
*
*
The gap between expectations and perceived performance is the primary indicator of overall service quality.
*
Customers build expectations in three levels: Essential, Expected, and Optional. Think about what types of expectations you make when making a hotel/restaurant reservation, and then categorize them using the three levels of service expectations.
After consumption of service or products, we evaluate our experience based on WHAT (product or technical quality) was delivered and HOW (functional quality) it was delivered.
*
Size: how different?
Direction: positive or negative?
The size and direction of discrepancy affects service quality.
*
*
Gap Analysis Model (GAM) or Gap Model is the most popular and widely accepted framework to explain the concept of Service Quality.
Please refer to an electronic handout about Gap Analysis Model (GAM).
*
When management does not understand what their customers want, a gap 1 (between expected service and management perceptions of consumer expectation) exist. For example, a manager may develop a system to ensure that all guests wait no longer than 15 minutes to check in. However, if guests start getting upset after 10 minutes, this system will cause dissatisfaction.
Talking to guests before developing the check-in system would enable the manager to learn that the critical time was 10 minutes, not 10 minutes.
Managers should walk around their operations, talk to customers, and encourage feedback. Management can also gain information on customers from marketing information systems.
*
Gap 2 occurs when managers know what their customer want but are unable or unwilling to develop systems that will deliver it. Several reasons have been given for gap 2:
Inadequate commitment to service quality. Lack of perception of feasibility. Inadequate task standardization. Absence of goal setting.
Management commitment to service quality is essential. Capital or resources
Sometimes we need to look for unconventional solutions to the problem. Translating customer needs into service specifications is critical to service quality.
Goals must be accepted by employees. Management must show its support through measurement of results, communication, and rewarding employees for superior service.
*
Gap 3 is referred to as the service-performance gap. Gap 3 occurs when management understands what needs to be delivered and appropriate specifications have been developed but employees are unable or unwilling to deliver the service.
Gap 3 errors occur when the employee and the customer interact. Management of the human resources functions (hiring, training, monitoring working conditions, and developing reward systems) is important in reducing gap 3 errors. Gap 3 occur are also the result of customer contact employees being overworked. This can occur when a business is understaffed. Under these conditions employees will become tired and stressed. They lose their enthusiasm for the job and become less solve customer problems.
*
Gap 4 is created when the firm promises more in its external communications than it can deliver. Lack of consistency can also cause gap 4 problems.
*
Even though service providers deliver the service seamlessly, Gap 5 can still occur because they have no/little control over customers. Customers may form their expectations levels inappropriately. They may not have enough knowledge and information about product and/or service. Thus, service providers keep tangiblizing service and educating/communicating customers about their services and products.
*
Gap 6 is a function of the others. As any of the other gaps increase in size, gap 5 also increases. It represents the difference between expected quality and perceived quality. The expected quality is what the guest expects to receive for the company. The perceived service is what the guest perceives he received for the company. If the guest receives less than he expected, the guest is dissatisfied.
*
Why is service quality important in our industry?
Tangible benefit: Profit
Intangible benefits:
Improve guest convenience, comfort, & well-being
Ensure customer security = build trust & confidence
Enhance service provider’s image
Establish a competitive edge (difference maker)
SERVQUAL is the most important and widely accepted measure for Service Quality.
There are five dimensions in SERVQUAL. Please refer to an electronic handout about Five Dimensions of SQ.
*
*
Although scale items measuring hospitality service quality may vary depending on the specific end use, the same five service dimensions remain constant. The five dimension clearly appears to be the best and most consistent measure of service quality
*
Measurement samples in the PPT slides are restaurant service quality. If you chose a hotel for the individual research project and look for some sample measurement items for hotels, please refer to an electronic handout about LODGSERV and 5 Dimensions of SQ.
*
*
*
*
*
Among the 5 dimensions of service quality, the most important dimensions id Reliability. Delivering as promised, consistency, accuracy, dependability in other words, that is the most important attribute of service quality.
This is the end of Chapter 2.
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