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Transcendent:
Product-based:
User-based:
Manufacturing-based:
Value-based:
Quality = Excellence. Recognized only throughexperience
Quality is precise and measurable
Quality lies in the eyes of the beholder
Quality is in conformance to the firms developedspecifications
Quality is a trade-off between price and value
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Benefits of Service qualityGood service quality customer delight retainingexisting customers and attracting new onesThe positive relationship between perceived servicequality and profitability have been documented
empirically by Buzzell and Gale.Quality edge boosts performance in 2 ways
1. Short run Superior quality fetches premium price2. Long run Business grows, gains in market share
PZB found a positive relation between perceivedquality of service obtained and willingness torecommend to friends
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Rust, Zahorik and Keiningham Model relationship between service quality andprofit
Improvement effort
Service quality improvement
Perceived service quality andCustomer satisfaction
Customer Retention
Word of mouth
Cost reduction
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Revenues and market share
Profitability
Attracting newcustomers
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Commitment to Service quality
Biggest responsibility with the managementof the organizationResource allocation personnel as well as
materialQuality ControlBenchmarking
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Making service quality financiallyaccountable
Business on the top quintile of relative servicequality on an average realize an 8% higher pricethan the competitionThe Hospital corporation of America found astrong link between perceived quality of patientcare and profitability across its many hospitalsFord Motor company has demonstrated thatdealers with higher service scores have higherthan normal profit, return on investment and profitper new vehicle sold
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CEOs views on benefits of servicequality
HDFC The nature and quality of ourservice will determine our reputation in themarket
Vysya Bank The main objective of TQMdrive is to achieve maximum possiblecustomer satisfaction and employeesatisfaction because only a happy staffmember will go out of his way to offersatisfying services to the customer andimprove the bottom line
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The Five Dimensions of ServiceQuality
Ability to perform the promised service dependably andaccurately. Ex - flights depart/arrive on schedule
Knowledge, competence, credibility and courtesy ofemployees and their ability to inspire trust andconfidence. Ex Knowledgeable Mechanic at theservice centre
Physical facilities, equipment, and appearance ofpersonnel. Ex seating and air-conditioning at the
theatre Interpersonal communication, Caring, individualized
attention the firm provides its customers. Ex - Acknowledging the customer by name
Willingness to help customers and provide promptservice. Ex no waiting at the hospital
Tangibles
Reliability
Responsiveness
Assurance
Empathy
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Measuring Service quality
Most widely used measure for service quality has beenSERVQUAL devised by Parsuraman, Zeithaml and BerryCustomer expectation of service quality results from acomparison of service expectations and perceivedperformance
SERVQUAL was first published in 1988The 5 service quality dimensions of reliability,responsiveness, assurance, empathy and tangibles are thebasic attributes measured by the SERVQUALSERVQUAL scores are expressed as the difference between
expectations and performanceRespondents complete a series of questions which measuretheir expectations on 5 service quality dimensions andsubsequently record their perception on performance on thesame dimensions
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SERVQUALThe original SERVQUAL consisted of 22 statements 4 ontangibles, 5 on reliability, 4 on responsiveness, 4 onassurance, 5 on empathyEquipments, physical facilities, appearance of employees,materials like pamphlets tangiblesMeeting promises, performing the service right the first time
reliabilityPrompt service, employees never too busy to respond tocustomer requests responsiveness
Feeling of safety in transaction, employees having theknowledge to answer questions assuranceIndividual attention to customers empathy
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SERVQUAL exampleExpectation statements (E)1. The physical facilities at Banks should be visually
appealing 1 2 3 4 5 67
2. Banks should give customers individual attention 1 2 3 4 5 6 7
Correspo nd ing p ercept io n s ta tem ents (P)1. The phy sical faci l i t ies a XYZ bank are visu ally
app ealing 1 2 3 4 5 6
72. XYZ bank g ives i t s cus tom ers individ ual at tent ion1 2 3 4 5 6
7
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SERVQUAL
To determine companys service qualityalong 5 service quality dimensionsTo find out relative importance of the
service quality dimensions as consideredby the customerTo track customers expectations andperceptions over timeTo compare the companys SERVQUALscores against that of the competitors
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Examples of SERVPERF
Statements
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Reliability1. The TV was repaired right the first time. 1 2 3 4
5 6 7 2. The Airline is on time as per schedule. 1 2 3 4
5 6 7 3. The mobile bill is free of errors. 1 2 3 4 5 6 7 4. The lawyer calls back as he promised. 1 2 3 4
5 6 7
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Tangibility
1. The Hotels lobby and facilities are attractive 1 2 34 5 6 7
2. The bank statement is easy to understand 1 2 3 45 6 7 3. The classroom is well ventilated and equipped with
projector and other aides. 1 2 3 4 5 6 7
4. The airline staff are well groomed. 1 2 3 4 5 6 7 5. The seats in the theatre are comfortable. 1 2 3 4
5 6 7
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Empathy1. The flight attendant has a pleasant demeanor 1
2 3 4 5 6 7 2. The reservation assistant at the theatre is
consistently polite 1 2 3 4 5 6 7 3. The telephone operator is courteous. 1 2 3 4 5
6 7
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Responsiveness1. When there is a problem the firm finds solution
for it quickly 1 2 3 4 5 6 7 2. The cable TV operator gives a correct time when
the installer will show up 1 2 3 4 5 6 7 3. The doctor is always available on phone in case
of emergencies 1 2 3 4 5 6 7
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Other Soft Methods used by serviceorganizations to assess quality
Transaction surveys: also called as trailer calls orpost transaction surveys. Usually done with asmall questionnaire immediately after the servicetransaction. Ex- A survey of airline passengers
while disembarkingComplaint solicitation and analysis: Customerstend to voice their dissatisfaction throughcomplaints. An analysis of the complaints can helpin identifying quality failure points
Mystery shopping: In this method researchcompanies are used by the service organizationwho send people posing as customers in order to
judge service quality
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The mystery shopper is unknown to theservice provider. Mystery shopping alsotermed as ghost shopping can be useful in
reinforcing service qualityIntermediary research This form ofresearch is useful in services whereintermediaries can provide valuablefeedback to the firm regarding the quality ofservice
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Hard and Soft Measures of ServiceQualityHard measures refer to standards and measuresthat can be counted, timed or measured throughaudits
typically operational processes or outcomese.g. how many trains arrived late?
Soft measures refer to standards and measuresthat cannot easily be observed and must be
collected by talking to customers, employees orothers
e.g. SERVQUAL, surveys, and customer advisorypanels.
H d M f S i
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Hard Measures of ServiceQuality
Control charts tomonitor a singlevariable
Service qualityindexesRoot cause analysis
(fishbone charts)Pareto analysisBlueprints
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Control charts are useful for displaying performance over timeagainst specific quality standards.Example: Percentage of Flights Leaving within 15 Minutes ofSchedule time
J F M A M J J A S O N D
60%
70%
80%
90%
100%
Month
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Composition e of FedExs Service Quality Index (SQI)
Late Delivery Right DayLate Delivery Wrong Day
Tracing request unansweredMissing proofs of delivery
Invoice adjustmentsMissed pickupsLost packages
Damaged packages
Aircraft Delays (minutes)Overcharged (packages missing label) Abandoned calls
15111
101010
551
Failure Type
Total Failure Points (SQI) =
WeightingFactor
XXX,XXX
DailyPointsX
No ofIncidents =
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Fishbone diagrams: A cause-and-effect diagram toidentify potential causes of problems.
Aircraft late togate
Late foodservice
Late fuel
Late cabincleaners
Poor announcement ofdepartures
Weight and balancesheet late
DelayedDepartures
Delayed check-in procedureBoarding pass problems
Acceptance of late passengersCut of too close to departure
timePoor gate locations
Facilities,Equipment
Gate agentscannot process fast
enough
Late/unavailableairline crew
Arrive lateOversized bags
Weather Air traffic
Front stagePersonnel
Procedure
Materials,Supplies
BackstagePersonnel
Information
Customers
Other Causes
Mechanical
FailuresLate pushback
Late baggage
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Analysis of Causes of Flight Departure Delays
Late passengersWaiting for pushbackWaiting for fueling
Late weight and balance sheetLate cabin cleaning / supplies
Other
Newark
All stations, excludingChicago-Midway Hub
Washington Natl.
23.1%23.1%
23.1%15.3%
15.4%
53.3%
15%
11.3%
8.7%
11.7%
33.3%
33.3%19%
9.5%
4.9%
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Pareto charts: Separating the trivial fromthe important.
Pareto Analysis is a statistical technique indecision making that is used for the selection of alimited number of tasks that produce significantoverall effect. It uses the Pareto Principle (also know as the80/20 rule). In terms of quality improvement, alarge majority of problems (80% of the variable)are produced by a few key causes (20%). This is
also known as the vital few and the trivial many.
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Blueprinting: A visualization of service delivery. It allowsone to identify fail points in both the front stage andbackstage.
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