All Constitutes Of Successful Service Delivery - Assignment Example

Introduction Due to rapid development of service industry, a consideration should be given to analysis of all constitutes of successful service delivery. The success of a company operating in a service industry is dependant on the quality of the service a company provides. Thus, the major concern of quality management was estimation and evaluation of consumer expectations formation as well analysis of the quality and satisfaction as perceived by customers. Customer Expectations, Satisfaction, and Loyalty Formation of the customer expectation of services takes place during pre and post consumption stages. Thus, prior to direct interaction with the service, consumers form own expectations about experiences related to the service consumption. In such way, customers establish own standards against which in the future the quality of the service received will be compared in accordance with the disconfirmation model. In case if the expectations about the service consumption were greater then the actual quality of product received, the outcome is negative disconfirmation or, in the other words, dissatisfaction with the service received. Whereas, if the expectations were smaller then the quality of the services received, the outcome is positive disconfirmation or product satisfaction. (Lovelock, C., & Wirtz, J. 2004). The higher customer satisfaction is, the greater is the possibility of customer loyalty in the post consumption stage. Thus, customer satisfaction and loyalty are directly related. The concept of customer loyalty is of vital importance as repurchase of services gives significant advantages to the service producer: a continuous stream of profit, reduction of marketing costs, growth of per-customer revenue, decrease in operating costs, increase in referral, increase in price premium (Youjae, Y., Suna, L. 2004). In relation to the customer loyalty, the service recovery concept should be emphasized, as customer loyalty is often seen as a consequence of successful service recovery. Service recovery can defined as all actions of the service provider to repair the damage resulted from inability to provide a service as it is designed to. Examples of failure to deliver high quality service are low speed delivery, damaged baggage arrival, cold restaurant meal. Thus, service recovery significantly influences customer's attitudes alongside with behavioral intentions and results in a possibility of customer loyalty when successfully executed (Lovelock, C., Patterson, P.G., & Walker, R.H. 2001). Customer Expectations of Services: Formation As previously stated, customer expectations are formed during the first two stages of customer purchase decision and are closely related to knowledge about a service a customer already has. The expectations formation process is not only influenced by marketer's communications, but also is shaped by word of mouth communication, past experience, and personal need. While marketer's communication is a relatively simple concept, word of mouth communication and past experience should be further categorized. Scholars distinguish two sources of customer knowledge about a service: external research and internal research. While internal search is directly linked to previous experiences and influences both the level of desired and expected services, external search category unites implicit and explicit promises (marketer's communication) and word of mouth secondary information received from second sources. Consequently, the two major types of knowledge are distinguished: experience and familiarity, knowledge received through direct involvement and second hand knowledge, respectively (Palmer, A. 2001). Customer service expectations can be categorized into 5 overall dimensions: reliability, tangibles, responsiveness, assurance, and empathy. The formation process is affected by numerous factors; in general, price is considered to be the dominant one. In the article "Understanding Customer Expectations of Service" by Parasuraman, A., Berry, Leonard L., Zeithaml, Valarie (1991), authors emphasize the importance of price as the shaper of customer expectations since many customers cognitively establish direct correlation between the service price and the expected quality of product that will be provided in the future. Quality Cues: Prior and at the Point of Purchase Creation of expectations is one of the central themes in services marketing. There are a number of interfaces in the service delivery system that will affect the final outcome. Even though prior to purchase or credence quality cues are of a vital importance, they cannot be easily identified. Every customer has initial set of expectations containing various information and descriptive beliefs that are brought by a potential customer into the service delivery system. As the customer encounters various cues such as peripheral components of the core service, observations of experience of others, planned in order to directly influence customer's expectations or unplanned, different potential expectations may be formed. There are five possible outcomes that result from customer exposure to cues: cues may be ignored and expectations may remain unchanged, the expectations may weaken, strengthen, or an entirely new set may be formed (Palmer, A. 2001). In general, companies tend to influence customer expectations especially during the pre purchase stage; points of influence after a customer has entered the delivery system are called interventions and will be discussed in detail further in the essay. The quality cues may be used by a marketer at the pre purchase stage in order to either lower, increase initial expectations. In a global meaning, there are various ways to provide those cues: facility design, employee behaviors, delivery of peripheral services, management of client-to-client interaction, etc. (Coye, R. 2004) The intervention can be of general nature that targets the segment of the market as a whole in case of marketers have a reason to believe that the expectations are too high and customers do not understand the difficulties of the process of service delivery. An example of this can be a message on answering machine that states the possibility of a delay due to high sales volume and recommends calling back another day. There are situations when expectations of the service are unreasonably low; in this case, a marketer provides quality cues that would increase the level of customer expectations. Once again, the ways through which the result can be achieved are numerous, but the major considerations are: reliability, responsiveness and competence. A bright example is PR program or television commercials that emphasize some specific features of the service provided, as these cues tend to significantly increase customer expectations. However, when it comes to commercials, the quality of created expectations and desires should be considered. The Servqual is a scale used to measure the quality of service provided to customers. The scale has 22 items with 5 distinctive dimensions: tangibles, reliability, responsiveness, assurance, and empathy. Each item, when the scale is employed, is used twice: in order the evaluate customer expectations about companies in the service industry and further to establish the degree of expectations customers have of a specific service. The model plays a key role in assessment of customer expectations thus enabling service providers meet the specific desires (Lovelock, C., Patterson, P.G., & Walker, R.H. 2001). The Role of Servicescape Servicescape plays a key role in providing information about service delivery process by means of elements of design such as signs and cueing formats that communicate the service production process and contribute to formation of realistic expectations. Servicescapes consist of three major parts: facility exterior such as exterior design and surrounding environment, service interior such as equipment used in the service delivery, and other tangibles as business cards, uniforms, employee brochures. The role of servicescape is multifunctional: facilitator, socializer, and differentiator. Servivescape plays a primary role in image development, stimulates the socialization of customers and employees in terms of their roles and behaviors. For example, pregnant military women were initially allowed to wear civilian closing. However, this resulted in their loss of identity in terms of association with the soldier. From now an on, maternity issues are the standard issues in the army. (Hoffman, D., Kelley, S. W., Chung, B. C. 2003). Finally, as a differentiator, a servicescape may distinguish a company from competitors through styling and design of interior or attract other customer segments. An example of this is a Chinese restaurant with traditional interior styling and design. Value: Service Recipient and Service Provider Customer value is not experience, but rather is a result perceived by customer. Customer values is viewed as a 4 level hierarchy: basic, the fundamental components of the value package that is a necessity in business, expected is what customers consider to be normal for the service provider and competitors, desired is the add-value features, that a customer would like to have but not necessarily expects, and, finally, unanticipated, the value goes beyond customer expectations and desires (Palmer, A. 2001). In relation to the service provider, value is viewed as an instrument to achieve greater efficiency of service delivery and production. Through estimation and evaluation of concepts of customer expectations, desires, and values a service provider develops a specific strategy intended at satisfaction of customer needs (McColl-Kennedy, J.R. 2003). Evaluating the Quality of Service: 5 Gaps Gap analysis is a specific case of quality management. Quality of service analysis through the gap method is centered on computation of discrepancy between each respondent's importance and satisfaction scores. Thus, this analysis provides data for quality management decisions. One of the most critical gaps is the lack of not knowledge regarding customer expectations of a service and may result from any of the following factors: lack of marketing research, inability to analyze research findings, lack of management interactions with service recipients, or inadequate upward communication. Another gap results from wrong service quality standards, a discrepancy between what managers perceive a customer expects and the actual standards of the service managers are striking for. This gap results from inadequate commitment to service performance, perception of feasibility, lack of standardization, or wrong goal setting. The service performance gap is a consequence of unwillingness of inability of employees to perform the level of service required by management. Further, seven other factors contributing to the inability can be distinguished: role ambiguity and role conflict, supervisory control systems, employee job fit, perceived control, fit between technology and the job. Gap between promises and delivery is another key factor that is a consequence of advertising, personal selling or public relations misrepresentation of the service level provided. Gap between customers' expectations is another major gap that is the result of the other gaps occurrence (Palmer, A. 2001). Service Quality Research While most service quality research uses the gap or servqual model for evaluation of customer expectations, there is a vast amount of other strategies. Such methods as customer survey and customer interview even though being widely used have some considerations to be included in the analysis. For instance, such aspects as body language and tone of voice are forgone, aside from this, they are rather costly. Customer value workshop method is a hybrid that incorporates other methods such as mental weighting method, technological interfaces, Kawakita Jiro methods and is in general considered to be more effective then the focus groups by reflection of exact picture of customer current and future needs, allows verification of gaps between the real and ideal quality of service performance. (Yang, C. 2003) Another strategy used by marketers is Importance Satisfaction model. This model is in many ways similar to the gap analysis, as it also compares the satisfaction and importance levels of different components. However, unlike the gap analysis that is centered on discrepancy level between importance and satisfaction, the Importance Satisfaction model examines the relationship between the two (Fontenot, G., Henke, L., Carson, K. 2005) Conclusion The importance of service quality research and evaluation on the final efficiency outcomes on the service industry performance can hardly be overestimated. The analytical data regarding quality and customer expectations analysis is still in the stage of formation. However, considering the rapid development of the service industry, there is little doubt regarding the fact that within the next few decades the services analysis will be the dominant branch of marketing and management study. References Coye, R. (2004). Managing customer expectations in the service encounter. International Journal of Service Industry Management. Bradford, 15(1), 54. Retrieved 17, 2005, from Edith Cowan University multiple database. Fontenot, G., Henke, L., Carson, K. (2005). Take Action On Customer Satisfaction. Quality Progress. Milwaukee, 38(7), 40-48. Retrieved 17, 2005, from Edith Cowan University multiple database. Hoffman, D., Kelley, S., Chung, S. (2003). A CIT investigation of servicescape failure and associated recovery strategies. The Journal of Services Marketing. Santa Barbara, 17(4/5), 322-341. Retrieved 17, 2005, from Edith Cowan University multiple database. Lovelock, C., & Wirtz, J. (2004). Services marketing: People, technology, strategy (5th ed). Pearson Education International. Lovelock, C., Patterson, P.G., & Walker, R.H. (2001). Services marketing: An Asia Pacific Perspective (3rd.) Sydney: Prentice Hall. McColl-Kennedy, J.R. (ed.). (2003). Services marketing: A managerial approach. Queensland: John Wiley & Sons Australia, Ltd. Palmer, A. (2001). Principles of services marketing (3rd Ed.). London: McGraw-Hill, England. Parasuraman, A., Berry, Leonard L., Zeithaml, Valarie A. (1991). Understanding Customer Expectations of Service. Sloan Management Review. Cambridge, 32(3), 39-59. Retrieved 17, 2005, from Edith Cowan University multiple database. Yang, C. (2003). Managing Service Quality. Bedford, 13(4), 310-325. Retrieved 17, 2005, from Edith Cowan University multiple database. Youjae, Y. and Suna, L.(2004) What Influences the Relationship Between Customer Satisfaction and Repurchase Intention Investigating the Effects of Adjusted Expectations and Customer Loyalty. Psychology & Marketing. Hoboken, 21(5), 351. Retrieved 17, 2005, from Edith Cowan University multiple database. Read More