Marketing services and customer experience

Lecture1_Definitionsclassificationsandtrends.pptxLecture4_Servicequalityandsatisfactionpart1.pptxLecture_Servicefailureandrecovery.pptxLecture2_Distinguishingfeaturesofservices.pptxLecture_Servicequalityandsatisfactionpart2.pptx

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Question 1 (2500 words)

 1.Analysis – models can help to categorize issues  

2.selection of theory- can be any study unit  

3.Recommendations – make recommendations to resolve all the issues you identify  – detailed recommendations  -one recommendations may solve more than any problem  

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4.Demonstrate critical thinking by identifying potential risks/ challenges associated with recommendations   

Service culture is the key of the case study*    

Question 2 (700 words)

 1.apply theory with personal experience  

2.describe the encounter as succinct as possible focus on 

3.evaluating the experience and analyzing why it was good or bad  use one framework to do this  

4.critique the framework in the context of your encounter. what strengths and limitation does it have 

5.can you suggest an improvements to the framework?

Definitions, classifications,
and trends
Marketing Services and the Customer Experience
Study unit 1

Size of the service sector
66% of world GDP
74% of GDP in developed countries
51% of GDP in developing countries
(World Bank, 2017)

Share of economic output in UK
(Office for National Statistics, 2018)
1948
2016

% of GDP
Services Manufacturing Construction Agriculture 46 42 6 6
% of GDP 79%
Services Manufacturing Construction Agriculture 79 14 6 1

Examples of service industries
Supply (retail, energy, transport)
Entertainment
Government and non-profit
Personal and maintenance
Tourism, Hospitality, Recreation
Healthcare
Communication and Information
Education and knowledge
Financial and insurance

What are services?
The production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange, satisfies an identified need
(Palmer, 2014)

What are services?
Services are deeds, processes, and performances…
economic activities whose output is not a physical product, is generally consumed at the time it is produced, and provides added value in forms (such as amusement, comfort, convenience) that are essentially intangible
(Wilson et al., 2016)

What are services?
Products of economic activity that you can’t drop on your foot, ranging from hairdressing to websites
(The Economist, 2013)

Product-service continuum
Tangible
Intangible
Tangible dominant
(service as add-on)
Intangible dominant
(product as add-on)
(Oliva and Kallenberg, 2003)
Distinction between the marketing of a service where service is the core product and where service is an add-on to a physical product

Servitization
With increasingly similar products, service becomes the differentiating factor and source of competitive advantage

Competing through service provision requires culture change

Physical product
Process-oriented service
Standardized services
Customized services
Transactional services
Relational services

(Kowalkowski et al., 2015)

New business models
Shift in lifestyle: car ownership forecast to decrease in developed economies (McKinsey, 2017)
Automotive manufacturers introducing service element to replace reduced revenues from manufacturing
Mercedes (and others) investing in shared mobility services

Open service innovation
Exchanging information and ideas with competitors and/or customers (i.e. external knowledge) to develop new services
(Myhren et al., 2018)

Ocado selling its automated warehouse technology, which uses robots and AI to fulfil online grocery orders, to supermarkets

Artificial Intelligence
AI increasingly used in services: robots and virtual bots in, for example, hospitality, healthcare, and call centres for mechanical and analytical tasks

Mechanical intelligence
Analytical
intelligence
Intuitive (creative)
intelligence
Empathetic
intelligence
Send scripted response after service failure
Analyse nature of failures
Understand contexts
Empathise and calm the customer
(Huang and Rust, 2018)

S-Commerce
Bricks and mortar commerce
Electronic
commerce
Social
Commerce
Social media used to promote online transactions
(Yusuf et al., 2018)

Molecular model
Many offerings are a combination of tangible and intangible:
cinema
visit
food and
drink
atmosphere
ticket purchase
and seat
reservation
method
of
delivery
building and
seating
the film –
entertainment
Screen size,
sound clarity

Classifying services
People as
recipients Possessions as recipients
Tangible actions High-involvement
personal services Goods maintenance services
Intangible actions Services for
the mind Intangible asset maintenance services

(Palmer, 2014)

Classification criteria
Low or high customization
Low or high customer participation
Low or high level of service provider judgement
One-time episodes or long-term relationship/contract
Utilitarian or hedonic service
Wide or narrow demand fluctuations
Capacity constrained or flexible
Customer to organization or organization to customer or remote interaction

Based on Lovelock (1983)

Supplementary services
Core Service
Payment
Consultation

Hospitality
Safekeeping
Billing
Order-taking
Information
Exceptions
Facilitating
Enhancing
Lovelock (1995)
Empirically validated by Frow et al. (2014). Their revised model amalgamates billing with payment, and introduces a new supplementary service: sustainability and social responsibility.

References
Frow, P., Ngo, L., and Payne, A. (2014) Diagnosing the supplementary services model. Journal of Marketing Management. 30 (1-2) 138-171.
Huang, M. and Rust, R. (2018) Artificial intelligence in service. Journal of Service Research. 2 (2) 155-172.
Kowalkowski, C., Windahl, C., Kinstrom, D., and Gebauer, H. (2015) What service transition? Industrial Marketing Management. 45 (February) 59-69.
Lovelock, C. (1983) Classifying services to gain strategic marketing insights. Journal of Marketing. 47 (summer), pp. 9-20.
Lovelock, C. (1995) Competing on service: Technology and teamwork in supplementary services. Strategy and Leadership. 32 (4) 32-47.
McKinsey (2017) Shared mobility. Available from: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/how-shared-mobility-will-change-the-automotive-industry
Myhren, P., Witell, L., Gustafsson, A. and Gebauer, H. (2018) Incremental and radical service innovation. Journal of Services Marketing. 32 (2) 101-112.
Oliva, O. and Kallenberg, R. (2003) Managing the transition from products to services. International Journal of Service Industry Management. 14 (2) 160-172.
ONS (2018) Economy. Available from: https://www.ons.gov.uk/economy
Palmer, A. (2014) Principles of Services Marketing. 7th edition. Maidenhead: McGraw-Hill.
The Economist (2013) Economics A to Z. London: The Economist.
Wilson, A., Zeithaml, V., Bitner M.J., and Gremler, D. (2016) Services Marketing. 3rd ed. Maidenhead: McGraw Hill.
World Bank (2017) World Development Indicators. Available from: http://wdi.worldbank.org/table/4.2.
Yusuf, A., Hussin, A. and Busalim, A. (2018) Consumer purchase intentions in social commerce. Journal of Services Marketing. 32 (4) 493-504.

Service quality and satisfaction
Part 1: Definitions and dimensions
Marketing Services and the Customer Experience
Study unit 4

Different perspectives
Quality is determined by the customer and is the extent to which the offering serves their needs and expectations
Quality is conformance to internally-specified standards

What is service quality?
The discrepancy [gap] between consumers’ perceptions of services offered by a particular firm and their expectations about firms offering such services
(Parasuraman, Zeithaml, and Berry, 1988)

Gap between consumers perceptions of services offered by a particular from and their expectations about firms offering such services
3

Dimensions of service quality

Reliability (delivering on promises) Dependable and accurate performance. Firm meets its promises (on delivery, price, problem resolution, service provision)
Assurance (inspiring trust and confidence) Competent, courteous, credible, offering security
Tangibles (representing the firm physically) Appearance of physical elements (inanimate and animate)
Empathy (treating customers as individuals) Good communication, customer understanding, and caring individualised attention
Responsiveness (being willing to help) Prompt and helpful employees

Reliability ( delivering on promises)
Assurance- trust confidence
Tangibles- appearance of physical elements
Empathy – treating customers
Responsiveness – helpful employees
4

Examples of dimensions

Reliability Responsiveness Assurance Empathy Tangibles
Car repair Problem fixed first time and ready when promised No waiting. Responds to requests Knowledgeable mechanics Acknowledges customer by name. Remembers previous problems Waiting area. Uniforms
Architecture Delivers plans when promised and within budget Returns telephone calls. Modifies designs when asked Credentials and reputation. Knowledge and skills Understands client’s industry (B2B). Friendly Office area, plans, invoices, dress

Alternative view
Grönroos (1984) says quality has two dimensions:
Technical or outcome dimension (‘what’)
Functional or process dimension (‘how’)
Excellent performance in one does not necessarily make up for failings in another.

Integrated model
Brady and Cronin (2001) attempted to combine previous models:
Interaction
Quality
Employee attitude
Employee behaviour
Employee expertise
Physical Environment Quality
Ambient conditions
Design
Social factors
Outcome
Quality
Waiting time
Tangibles
Valence
Service
Quality

Security
Privacy
Accuracy
Timeliness
Delivery condition
Responsiveness
Returns policy
Information quality
Navigation
Purchase process
E-service quality
(Blut et al., 2015)

E-Service Quality

Design

Security

Customer service

Fulfilment

What is satisfaction?
Satisfaction is the consumer’s fulfilment response. It is a judgement that a product or service provided a pleasurable level of consumption-related fulfilment
(Oliver, 1997)
Satisfaction is not an absolute. It is relative.
Can have transaction-specific satisfaction and cumulative satisfaction.

Expectancy disconfirmation model
Performance/ experience exceeds expectations
Satisfaction or delight

Positive disconfirmation
Performance/
experience
lower than
expectations
Dissatisfaction

Negative disconfirmation
Performance/
experience meets expectations
Confirmation (zero disconfirmation)
Satisfaction

Based on Oliver (1981)

Satisfaction and service quality
Satisfaction
Service Quality
Service Quality
Satisfaction
Satisfaction
Service Quality
OR
OR

Satisfaction and service quality
Confusion because service quality and satisfaction both conceptualised as a comparison of what is received with what was expected
Prevailing view (e.g. Grönroos, 2007) is that service quality is a cognitive judgement that contributes to satisfaction
Satisfaction is influenced by both cognitive judgments of performance, but also emotions that result from the service experience (e.g. pleasure, surprise, relief)

Satisfaction and service quality
Service Quality
Product Quality
Value
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Satisfaction
Emotional response
(Wilson et al., 2016)

Why is satisfaction important?
Satisfaction or delight
Loyalty and/or positive WOM
Dissatisfaction
Switching and/or negative WOM
‘Leaders who do not actively work to increase customer satisfaction will be responsible for damaging their companies’ future earnings and shareholder value’
(Hart, 2007)

Satisfaction and retention
On average, 65-85% of customers who ‘defect’ to competitors claim they were satisfied with their previous service provider.
Reichheld (1996) says we fall into the ‘satisfaction trap’, thinking that satisfaction is the end in itself. What really matters is loyalty.

Delight
Customer delight means delivering what is unexpected by the customer (Oliver et al., 1997)
Delight means surprise, excitement, pleasure
However, once customers have been delighted, their expectation levels are raised
Results in extra effort and cost to the firm
The strategy of under-promising to over-deliver (UPOD) can backfire. Some customers may go elsewhere because the quality level signalled by the firm is below what they consider adequate (Topaloglu and Fleming, 2017)

Delight
Surprise
Joy
Employee effort
Employee expertise
Tangibles
Delight
Barnes et al. (2016)

Expectations
Customer expectations are beliefs about service delivery that serve as standards or reference points against which performance is judged
Zeithaml et al. (1993) distinguish two levels of expectation:
Desired Service Level
The level of service the customer hopes to receive, consisting of a blend of what the customer believes can and should be delivered
Adequate Service Level
The level of service the customer will accept. The minimum service that can be delivered and still meet a customer’s basic needs

Zone of tolerance
Zone of tolerance: difference between desired and adequate service levels
Zone of tolerance expands and contracts across customers and even within the same customer (depending on the situation)
When service falls below adequate level customers will be frustrated. When it is higher than the desired level, customers will be delighted
Desired Service
(ideal expectation)
Adequate Service
(minimum expectation)
Zone of tolerance

Factors influencing expectations
Predicted service expectations:
Provider promises
WOM
Past experience
Personal needs
Situational factors
Perceived alternatives

References
Barnes, D., Collier, J., Howe, V., and Hoffman, D. (2016) Multiple paths to customer delight. Journal of Services Marketing. 30 (3) 277-289.
Blut, M., Chowdry, N., Mittal, V. and Brock, C. (2015) E-service quality: A meta-analytic review. Journal of Retailing. 91 (4) 679-700.
Brady, M. and Cronin, J. (2001) Some new thoughts on conceptualising perceived service quality. Journal of Marketing. 65 (3) 34-49.
Cronin, J. and Taylor, S. (1992) Measuring service quality: a re-examination and extension. Journal of Marketing. 56 (3) 55-68.
Grönroos, C. (2007) Service Management and Marketing. 3rd ed. Chichester; Wiley.
Grönroos, C. (1984) A service quality model and its implications. European Journal of Marketing. 18 (4) 36-44
Hart, C. (2007) Beating the market with customer satisfaction. Harvard Business Review. 85 (3) pp. 30-32.
Oliver, R. (1981) Measurement and evaluation of satisfaction processes in retail settings. Journal of Retailing. 57 (Fall) 25-48.
Oliver, R. (1997) Satisfaction: A Behavioural Perspective on the Consumer. New York: McGraw-Hill.
Oliver, R., Rust, R. and Varki, S. (1997) Customer delight. Journal of Retailing. 73 (3) 311-336.
Parasuraman, A., Zeithaml, V., and Berry, L.L. (1988) SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing. 64 (1) 12-40.
Reichheld, F. (1996) The Loyalty Effect. Boston: Harvard Business School Press.
Topaloglu, O. and Fleming, D. (2017) Under-promising and over-delivering: Pleasing the customer or strategic blunder? Journal of Services Marketing. 31 (7) 720-732.
Wilson, A., Zeithaml, V., Bitner, MJ., Gremler, D. (2016) Services Marketing. 3rd ed. Maidenhead: McGraw-Hill.
Zeithaml, V., Berry, L., and Parasuraman, A. (1993) The nature and determinants of customer expectations of service. Journal of the Academy of Marketing Science. 12 (1) 1-12.

Service failure and recovery
Marketing Services and the Customer Experience
Study unit 7

What is service failure?
Service performance falls below a customer’s expectations
Can be due to employees, technology, customer co-production errors, and other customer behaviour
The real test of a service provider takes place after a service failure has occurred

Failure is inherent in services
Intangibility
Subjective expectations
Variability
Variations in service delivery
Perishability
Inability to match supply to demand
Inseparability
Customer and provider face-to-face

Lots of opportunity for failure

Pre-sales Initial telephone/web enquiry
Making reservation
Issue of ticket
Post-sales, pre-consumption Baggage check-in/issue of boarding pass
Advice of departure gate
Quality of waiting conditions
Consumption Welcome on boarding aircraft
Assistance in finding seat
Assistance in stowing baggage
Reliability of departure time
Attentiveness of in-flight service
Quality of food service
Comfort
Post-consumption Baggage reclaim
Information for forward travel

Service failure in restaurants

Group 1 Service delivery failures Product defects, slow service, cleanliness 45%
Group 2 Response to customer requests Food not cooked to order, seating problems 18%
Group 3 Unprompted employee actions Inappropriate behaviour (e.g. rude), wrong order, mischarged 37%

(Hoffman et al., 1995)
In 21% of service failure incidents, employees did not implement recovery strategies
Where recovery took place, customer retention rate was 75%

Customer response options
Unsatisfactory service encounter
No action
Some form of private action
Some form of public action
Negative WOM
Defect
(switch provider)
Complain to third party
Take legal action to seek redress
Complain to service firm

Complaining
45% of dissatisfied customers complain to frontline employees
5% of dissatisfied customers complain to firm’s head office
Why don’t more unhappy customers complain?
Too much effort
Don’t know the complaint procedure
Don’t believe it will make any difference
Avoid confrontation – embarrassed
Believe they may be partly responsible
(Luria et al., 2009)

Complaining
‘Thank goodness I’ve got a dissatisfied customer
on the phone.
The ones I worry about are the ones I never hear from.’
(Anon)

Omni-channel failure and recovery
Customers are channel-blurring: complaining on social media about in-store issues
More transparency means the stakes are high for service recovery
Service providers need a joined-up and rapid approach to tracking, and responding to, failures

Facebook complaints for department stores
(Rosenmayer et al., 2018)

Series 1 Bricks & mortar experience Delivery problems Marketing comms/pricing Product quality Customer service problems Website issues Unethical behaviour Payment issues 0.24 0.16500000000000001 0.16 0.14499999999999999 0.11 0.08 7.4999999999999997E-2 0.03 Column1 Bricks & mortar experience Delivery problems Marketing comms/pricing Product quality Customer service problems Website issues Unethical behaviour Payment issues Column2 Bricks & mortar experience Delivery problems Marketing comms/pricing Product quality Customer service problems Website issues Unethical behaviour Payment issues Failure category

Percentage of total failures

Switching Factors (% of respondents mentioning)
Core Service Failure: 44% (service mistakes; billing errors)
Service Encounter Failure: 34% (uncaring, impolite, unknowledgeable staff)
Pricing: 30% (unfair or deceptive or high)
Inconvenience: 20% (inconvenient access/hours)
Response to Service Failure: 17% (reluctant, or no, response to failure)
Competition: 10% (attracted by competition)
Ethical Issues: 7% (unethical behaviour)
Involuntary Switching: 6% (provider or customer moved)

(Keaveney, 1995)

Recovery
Systematic efforts of a firm to correct a problem following a service failure and to retain a customer’s goodwill.
True test of a firm’s commitment to quality and satisfaction
Costs of obtaining new customers are three to five times higher than retaining existing customers (Reichheld, 1996)

Service recovery paradox
Customers who experience a service failure and then have it resolved are sometimes more satisfied than customers who had no problem in the first place
But research suggests this only works for the first service failure
Moderated by the severity of the service failure
(De Matos et al., 2007)

Service recovery framework
(Vaerenbergh et al., 2019)

Compensation

Monetary compensation

New/exchanged goods

Favourable employee behaviour

Courtesy

Justification

Organizational procedures

Recovery time

Flexibility

Reperformed service

Apology

Effort

Empathy

Employee empowerment

Customer participation

Customer evaluation of recovery
Satisfaction is maximised and potential for negative WOM minimised when service recovery is:
Handled swiftly
Implemented by a courteous and caring employee
(Hocutt et al., 2006)

Customer evaluation of recovery
BUT, appropriate recovery strategy may depend on emotional state of customer:

High-intensity negative emotional state
Delayed economic and psychological recovery
(Tang et al., 2018)

Low-intensity negative emotional state

Swift economic recovery

Service guarantees
A service guarantee is an explicit promise made by the service provider to:
deliver a certain level of service to satisfy the customer
remunerate the customer if the service is not sufficiently delivered.
Reduces perception of risk
Indicates to employees the required level of service
(Hogreve and Gremler, 2009)

If you aren’t satisfied with something, please let us know during your stay and
we’ll make it right or you won’t pay.
It’s guaranteed.
Service guarantee

References
De Matos, C., Henrique, J., and Rossi, C. (2007) Service recovery paradox: Meta analysis. Journal of Service Research, 1 (August), 60-77.
Hocutt, M., Bowers, M., and Donavan, D. (2006) The art of service recovery: fact or fiction. Journal of Services Marketing, 20 (3), 199-207.
Hoffman, K.D., Kelley, S., and Rotalsky, M. (1995) Tracking service failures and employee recovery efforts. Journal of Services Marketing, 9 (2), 49-61.
Hogreve, J. and Gremler, D. (2009) Twenty years of service guarantee research. Journal of Service Research, 11 (4), 322-343.
Keaveney, S. (1995) Customer switching behaviour in service industries: an exploratory study. Journal of Marketing, 59 (April), pp. 71-82.
Luria, G., Gal, I., and Yagil, D. (2009) Employees’ willingness to report service complaints. Journal of Service Research, 12 (2), 156-174.
Reichheld, F. (1996) The Loyalty Effect. Boston: Harvard Business School Press.
Rosenmayer, A., McQuilken, L., Robertson, N., and Ogden, S. (2018) Omni-channel service failures and recoveries: Refined typologies using Facebook complaints. Journal of Services Marketing, 32 (3), 269-285.
Tang, X., Chang, E., Xing, H., and Zhang, M. (2018) Timing and compensation strategies in service recovery. Journal of Services Marketing, 32 (6), 755-766.
Vaerenbergh, Y., Varga, D., Keyser, A., and Orsingher, C. (2019) The service recovery journey. Journal of Service Research, 22 (2), 103-19.

Distinguishing features of services
Marketing Services and the Customer Experience
Study unit 2

Four distinguishing features
Intangibility
Inseparability
Variability (heterogeneity)
Perishability

These four features have been identified by a variety of authors, but Zeithaml, Parasuraman, and Berry (1985) provide an excellent review of the features and a summary of their implications (you can cite these authors, if you need to, when discussing the four features)

Intangibility
Abstract experiences, activities, and processes, so can’t be seen or touched
Probably the most fundamental characteristic

3

Implications of intangibility
Difficult to evaluate, which increases buyer risk
Difficult to promote/communicate
Impossible to build up an inventory
Issues for marketing:
Brand image
Physical cues
Price as a quality proxy
Guarantees and endorsements
Free trials
WOM

4

Implications of intangibility
The ease or difficulty of evaluating a service depends on its attributes:
Search attributes (attributes that can be evaluated prior to purchase)
Experience attributes (attributes that can only be evaluated during/after consumption)
Credence attributes (attributes that can’t be evaluated easily even after purchase)

5

Intangibility
(Zeithaml, 1981)
Restaurant Meals
Vacation
Haircut
Entertainment
High In Experience
Attributes
Computer Repair
Education
Legal Services
Complex Surgery
High In Credence
Attributes

Inseparability
Customer consumption often simultaneous with service production/delivery
Customers interact with service provider
Can include customer co-production

Implications of inseparability
Service providers require different skill set
Co-production can influence service outcome
Other customers can be present
Difficulty selling to geographically widespread market
Difficult to correct defective service
Issues for marketing:
Employee and customer management
Multi-site locations
Opportunity for customization

Variability (Heterogeneity)
No two service provisions are ever identical
Affected by personnel delivering service, time of day, other customers present, etc.
Individual customer perceptions of service delivery will vary

Implications of variability
Consistently perfect quality difficult to achieve
Service delivered to the customer may not match what was promoted or planned
Implications for brand image
Greater risk for customer
Issues for marketing:
Training and/or technology to reduce variability
Standardise wherever possible
However, customers of more ‘hedonic’ services expect a customized approach (Ding and Keh, 2015)

Perishability
Services are time-bound. Cannot be stored or saved, and sold later
Little or no inventory

Implications of perishability
Lost revenue (excess capacity)
Lost customers (excess demand)
Issues for marketing:
Managing congestion during peak demand, and unused capacity during low demand

Dispelling the myth?

Intangibility Services often have tangible results
Inseparability Many services (or elements of a service) are produced without the customer present
Heterogeneity Many services are standardized
Perishability Many tangible products are perishable and some aspects of services can be inventoried

(Vargo and Lusch, 2004)

A Fifth (or the only?)
Marketing transactions that do not involve a transfer of ownership (Lovelock and Gummesson, 2004)

Extended marketing mix
Booms and Bitner (1981) extended mix to 7 ‘Ps’. The importance of each will vary according to the particular service
Physical Evidence
Process
People

Extended marketing mix
People
All human actors who play a part in service delivery and influence a buyer’s perceptions
Physical Evidence
The environment in which the service is delivered and any other tangible elements
Process
The procedures, mechanisms, and flow of activities by which the service is delivered

References
Booms, B. and Bitner, M.J. (1981) Marketing strategies and organization structures for service firms. In Donnelly, J. and George, W. eds. (1981) Marketing of Services. Chicago: AMA, pp. 51-67.
Ding, Y. and Keh, H. (2015) A re-examination of service standardization versus customization from the consumer’s perspective. Journal of Services Marketing. 30 (1), 16-28.
Lovelock, C. and Gummesson, E. (2004) Whither services marketing: in search of a new paradigm and fresh perspectives. Journal of Service Research. 7 (1), pp. 20-41.
Vargo, S. and Lusch, R. (2004) The four service marketing myths. Journal of Service Research. 6 (4) 324-335.
Zeithaml, V. (1981) How consumer evaluation processes differ between goods and services. In Donnelly, J. and George, W. eds. (1981) Marketing of Services. Chicago: AMA, pp. 186-190.
Zeithaml, V., Parasuraman, A., and Berry, L. (1985) Problems and strategies in services marketing. Journal of Marketing. 49 (2), 33-46.

Service quality and satisfaction
Part 2: Measurement and management
Marketing Services and the Customer Experience
Study unit 5

Difficulties of measurement and management
Intangibility of services makes quality difficult to measure. An abstract construct
Inseparability means that customers co-produce the service and take some responsibility for quality
Variability means no two interactions will be the same

Levels of measurement
Three sets of measures:
Customer measures
Service performance measures
Financial measures

SERVQUAL and Gaps model
As well as identifying five dimensions of service quality (RATER), Parasuraman, Zeithaml, and Berry (PZB) developed:
the SERVQUAL Questionnaire (PZB, 1991) to measure service quality
a framework commonly called the Gaps model (PZB, 1985) to show the major causes of service quality shortfalls and how to remedy them

SERVQUAL
22 items, across the five dimensions
P (perception) and E (expectation scores) scores for each item are compared to arrive at a quality score for each of the 22 items
Adapt depending on the industry and context to reflect different service activities
Administer on a regular basis to analyse trends

Criticisms of SERVQUAL
Is it measuring SQ or satisfaction?
SERVQUAL dimensions are not generic
Concentrates on process more than outcome
Excessively long questionnaire
Respondents are required to rate expectations and perceptions at the same time. Expectations will be biased by experience of service
No indication of importance of each item to customers
The fact that what we experienced is better than we expected (P>E), doesn’t actually tell us much about the quality of the service

Performance-only questionnaire
Cronin and Taylor (1992) recommend using only the performance questions of the SERVQUAL model
Resembles typical customer survey
They also allow for weighting of the 22 items

Service quality Gaps model
Management’s perceptions of customer expectations
Translation of perceptions into service quality specifications
Service Delivery
Perceived Service
Expected Service
External Communications
WOM
Personal needs
Past experience
Gap 5
Consumer
Company
Gap 4
Gap 3
Gap 2
Gap 1
(Parasuraman, Zeithaml, and Berry 1985)

Gap 1: Not knowing what customers expect
The gap between customer expectations and management perception of customer expectations
A misunderstanding of what attributes are valued by customers
A market intelligence gap

Causes of gap 1

Gap 2: Inappropriate service standards
The gap between management perception of customer expectations and service quality specifications
Service designs and standards do not reflect expectations
A design standards gap

Causes of gap 2

Lack of management commitment (belief that customer expectations are unrealistic)
Vague, undefined service designs
Inadequate task standardization
Failure to develop physical environment in line with customer expectations

Gap 3: Failure to deliver to standards
The gap between service quality specification and service delivery
May lack necessary systems, processes, and people
May not encourage and require staff to meet standards
A delivery gap

Causes of gap 3

Rigid or complicated specifications
Poor internal marketing
Employee role ambiguity or conflict
Break-down in technology or systems support
Employee/customer unwillingness or inability to perform
Failure to match supply and demand

Gap 4: Failure to meet promises
The gap between service delivery and external communications
The provider promises one thing and delivers another
A communications or ‘promises’ gap

Causes of gap 4

Propensity to over-promise or exaggerate
Lack of integration between marketing and operations
Lack of horizontal communication within the firm

Gap 5
The gap between perceived service and expected service.
The customer-perceived gap
The result of one or more of gaps 1 to 4
SERVQUAL measures gap 5 (perceptions versus expectations)
Having administered SERVQUAL, marketers can examine which of the four gaps is responsible for gap 5

Closing the gaps

Gap 1: Market intelligence gap Market research; customer feedback; interaction between customers and management; communication between contact personnel and management
Gap 2: Standards gap Specify tasks, sequences, and timings as tightly as possible; standardize repetitive tasks to improve consistency
Gap 3: Delivery gap Improve recruitment, training, and rewards; clarify roles; empower; improve technology and equipment; educate customers; monitor late/inaccurate deliveries; complaints recovery procedures
Gap 4: Communications gap Don’t over-promise; seek input from contact personnel; pre-test advertising; facilitate inter-functional communication

Measuring satisfaction
Organizations create customized measures of satisfaction to suit their individual needs
Attempts have been made to devise generic models. UKCSI (2019) uses five dimensions: 
customer experience
customer complaints and recovery 
customer ethos 
emotional connection
ethics

Sainsbury’s

Checkout Trolleys and baskets Products Deli and fish
counter Staff Pricing Misc.
Help at checkouts

Enough time to pack purchases Easy to steer trolleys
Strong bags
Wide range of

Quality fresh fruit and veg
Quick service

High quality product Always available

Helpful and courteous Clearly marked on shelf
Good offers Baby-changing facilities
Not crowded

58 statements across seven categories to rate on a Likert scale.

Research techniques
Questionnaires (SERVQUAL surveys; exit surveys)
Critical incident technique
Customer panels
Mystery customers
Complaint (and compliment) analysis
Employee research
Ethnographic research
User-generated content
Lost-customer follow-up

Setting service standards
Q: How far should a firm go in improving service quality?
A: As far as customers are prepared to pay for the enhanced level of quality

References
Cronin, J. and Taylor, S. (1992) Measuring service quality: a re-examination and extension. Journal of Marketing. 56 (3), pp. 55-68.
UKCSI (2019) The State of Customer Satisfaction in the UK. Available at: https://www.instituteofcustomerservice.com/research-insight/research-library/ukcsi-the-state-of-customer-satisfaction-in-the-uk-january-2019
Parasuraman, A., Zeithaml, V., and Berry, L.L. (1985) A conceptual model of service quality and its implications for future research. Journal of Marketing. 49 (Fall), pp. 41-50. 
Parasuraman, A., Zeithaml, V., and Berry, L.L. (1988) SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing. 64 (1), pp. 12-40. 
Parasuraman, A., Zeithaml, V., and Berry, L.L. (1991) Refinement and re-assessment of the SERVQUAL scale. Journal of Retailing. 67 (4), pp. 420-450. 

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