Management Service Quality and SERVQUAL - Research Paper Example

Management Service Quality and SERVQUAL Management Service Quality and SERVQUAL Service delivery in the insurance industry has been one of the most contentious issues that affect its public perception. According to several studies done across the globe, many insurance sales agents and companies promises may not match the fulfillment. Among the subsectors of Insurance, Medical Insurance has been among the least investigated on matters of perception and expectation matching. The United Arab Emirates medical insurers have been no different regarding mismatching their delivery against their customers expectations. This paper inquired about customers experience and carried out a comparative analysis on UAEs medical insurance clients on their expectation and final perception after the service, by using the (SERVQUAL) a quality measurement tool. The conclusion was that the delivery of the services to the customers in many cases did not meet the expectations after experiencing the service.  Introduction Both the private and public healthcare providers in The UAE have been credited for trying to accommodate the high numbers of people seeking their services. According to statistics, the ratio of patient to the doctor is one to eighty thousand (1:80,000) which is way above the world standards of 1:250,000. Medical insurers, however, have been criticized for not doing enough to satisfy their customers expectation in the country. There are reasons that the medical insurance board has provided explaining this gap. Some include possible misunderstanding of the technicalities of insurance by some customers or misrepresentation of facts by insurance sales agents. These have done a lot in creating very unrealistic expectations to the customers that may not be met by normal standards. This paper will investigate the customers’ feeling about the insurance companies’ reliability, competence, responsiveness and fulfillment of the promises said. By using the SERVQUAL analysis tool, there will be a comparative analysis of the aspects of some medical insurance consumers of the UAE hospitals. SERVQUAL as a quality analysis tool takes various facets of customer expectation into consideration and matches them with the real experience (Kettinger, and Lee, 2010). This can be used as a measure by managers of medical insurance companies to establish the true nature of their customer’s feelings. There has been almost a 60% growth of medical insurers in the Middle East, especially in the Arab Emirates. The competition for this limited market has inevitably been high over the last decade. Therefore, many firms have adopted professional marketers to handle the selling of their products (Burns, 2012). However, the packaging of these policies may not be as realistic as they ought to be because sales agents aim for commission and may add untrue facts so that they excite the customers. The health sector in the UAE has grown over the past decade because of the massive investment, both in the country and private players in general. Both local and international companies have set base in the country because of its reputation of being economically stable. There are various factors attributing to the exponential growth of the general insurance in the country. These include the fact that the health sector no longer operates in the conventional aspect where the government had the highest stake. In this day and age, there many countries have adopted the competitive free market. Secondly, the use of marketing tools that the corporate world was previously using in this industry. This poses a danger because customers’ expectations are increased, thus leading to frustrations after they experience the service. Customers always have a perception of a product and can easily see the differences from one product to another. This always makes it easy for them to defect from one product to another based on whether they are satisfied or not. Some market researchers have confirmed that customers are 50% likely to change their stand and loyalty for a given product based only on the opinions of close people. Customer loyalty in a capitalistic market may be difficult to retain if the businesses involved do not apply the correct measures of retention. The general insurance market faces a similar challenge because the market is delicate and volatile. Medical insurance as a service in the market also falls into this situation because of the similar dynamics that the corporate world deals with the day to day basis.  Literature Review Various pundits have discussed and analyzed the aspects of SERVQUAL and its effect on decision making by managers. Others, such as Zinny (2013) have given a critique on the aspect of medical insurance regarding customer satisfaction measurements. Several publications are available with hard facts that represent the dynamics of the industry. Because this paper discusses the medical insurance’s customer’s expectation as matched with their perception and the SERVQUAL, there will be a technical approach to each of these aspects in details.  Kettinger and Lee (2010) give a critique and analysis of the SERVQUAL in the conventional European corporate situations. They investigated the reasons that have led to strong brands successfully maintaining their branding and customer retention for many years. In agreement Pons (2012) talks about the challenges that startups have in filling the gap of the customers when selling their products. This is a big deal, especially in the emerging markets. On the same breath, Bollinger (2013) looks at the way that customers perceive and define quality service. He found that quality can be defined differently and is subject to opinions, experiences and assumptions that customers may have in the long run. By investigating the insurance industry in America, the researcher found out that over the marketing of the brands sometimes could lead to confusion and perception change towards the marketed goods or services.  John investigated customer expectations on new products that have not been tested in the market. His inquiry sought to find out the objectivity of a customer to make an independent judgment on new products. He found out that only about 30% of customers make their independent choices without external influence. This shows the power of marketing and personal selling that many insurance firms have in the long run. However, the danger of over expecting the customers always comes into play because of these factors (Carman, 2010). Despite that, several traits of a quality service came into the picture, and they included the empathy, responsiveness, reliability, and assurance as measures of satisfaction.  On the matter of medical insurance and its customer reception, (Burns, 2012) used several hospitals in Oman as the study center to establish customer expectation vis-à-vis their perception after the experience. He concluded that all three SERVQUAL gaps existed at all places in the equation. These gaps include the management perception gap, the performance service gaps and wrong service and quality gap. In his conclusion, he identified the aspect of management assumption that they understand the quality needs can jeopardize service delivery because if the danger of offering the wrong service to a right specific need. Methodology The research activity undertook to utilize questionnaires to obtain the required information from various respondents. The main aim was to determine the use of SERVQUAL to determine client expectations and service delivery perception after experiencing the service.. Because of the nature of the investigation and data to be collected, the descriptive research design was the ideal design employed. Inquisitive questions and tables were printed by questionnaires to collect primary data. This activity used the “purposeful sampling method.” In this method, the respondents from the surveys were only picked based on their relevance and ability to give the required information. The questionnaire in use was divided into two sections. The first required respondent information and the second one contained a tabular representation that showed the response sheet. On the table, the respondent was required to fill in the required. Each row had a sub row that was split into two, namely patient expectation and patient perception. The Likert scale starting from "Strongly Disagree = 1 "to strongly agree = 7" was used to indicate the customers rating. In the questionnaire, information regarding hospital type, the name of the hospital, demographics of the hospitals was captured. All the data collected was taken with the free consent of the respondents. There were no cases of taking the information by force or coercion that took place. Confidentiality and the promise of nondisclosure was an assurance that was given by the researchers before commencing in collecting the information from the respondents. As an ethical consideration, each of the respondent’s answers will be treated as a valid point towards calculation and establishment of the facts that the research seeks to find out. Data Analysis and Discussion This segment takes into account the data collected from the questionnaire and analyzes the findings depending on the actual data. There is a tabular representation of each particular data item that is, thus, used for deduction of facts. The scales that were used in this questionnaire were perception and expectation exploratory factors. The statistical description that included tabulation, graphical representation and limited calculations were key in this analysis. Each healthcare had its distinct data, and they were represented in tables. According to the findings, there was an average gap of customer perception and expectations. The five SERVQUAL dimensions and rest of the items were found to have a negative gap difference. The two tables represent a comparison of the 3 out of 10 major medical insurance providers in the calculated data. For the sake of company reputation, this study will not provide their official names because of social and legal cases. 1. For company A (average SERVQUAL results) Reliability Company A showed results that indicated that customers experienced service in the right way during the first encounter. This shows that their expectation was greatly surpassed by their initial perception of the serve they received. Therefore, the service by the providers could be rated higher than expected, in the long run. Despite this, there was a reported negative service gap and miscommunication in the same hospital. The clients indicated that there was a mishap in all the operations that could be a as a result of poor record keeping and analysis of customer data. This report proposes that proper records be kept at all times to avoid a perception of disorganization by the customer. C and B scored the lowest score mark. Responsive The company A has the highest score when it came to responsiveness from the service providers. There was a high level of coordination and efficient provision of services by the attendants. Asked about their perception on proper response, the customers indicate the urgency and timely attending of their needs. Both companies B ad C scored the least in this sector because the customers viewed them as being either too preoccupied or too overwhelmed. This indicates a need for the government to equip the public further on staff and build other hospitals because, they may experience a certain level of being overwhelmed hence poor service delivery (Stark, 2012). Assurance This is a psychological connection and concern that the company attendants could give to the customers (McGill, 2010). The customers feel that the more the company showed that it promises the customers what may be fulfilled well; the customers have a relatively high peace of mind. Company A scores the highest with the gap being almost as equal as A while company C scored the lowest with a negative expectation gap. The company C had the best-advertised campaign, hence filling the customers with too high expectations. The general gap indicated that the service being delivered is not only untrustworthy, it also misleads the customer and their expectations. Empathy, This is the psychological feeling that a given company or service provider understands one’s feeling and truly wishes to provide solutions for them. In the insurance sector, many companies have preconceived bad press coverage on matters if fraud and misrepresentations of facts and selling points just to maximize profits (Grace, 2011). Some customers have filed court cases on insurance tribunal because they felt that their cases were not properly handled by the insurance companies involved. In this research, companies A and B got the most positives on the matters of showing empathy to their customers while company C got the lowest. The response from C was that the customer service representatives were not at par with the customer’s psychological needs. Therefore, the management ought to modify customer relations to enhance their expectation at highest. In insurance and healthcare sectors, empathy is found to be the second highest expectation and second lowest perception of service quality Andrew, 2012). Determinant Overall Mean Score Perception Mean Score Expectation Mean Score Tangibles -0.46 4.57 5.14 Responsiveness -0.64 4.44 6.20 Assurance -0.7 4.57 6.27 Empathy -0.88 4.53 6.34 Reliability -0.81 5.38 6.26 The Correlation analysis between aspects of service quality and the magnitude of transactional factors have indicated that, demographic, timely and attitude of the staff goes hand in hand with perceived quality. Recommendations This research was aimed at the analysis of the medical assurance sector of the UAE and undertook to use the SEQUEL tool. The main aim of choosing this is to measure the perception and expectations that customers have prior and after the service is delivered to them. The essence of carrying out this study is the fact comes after various complaints were launched concerning the sector’s malpractice. Thus the research recommends the following:  a. Insurance companies ought to have proper Customer service and indemnify departments for speedy compensation because and any delay, in this case, can aggravate suffering. b. Lay importance of employee training and timings in order to be competitive in the market by providing effective facts. c. Invest in proper systems that capture customer information at all costs. d. Upgrade insurance products that serve the customers in the right and effective manner. e. Do customer follow-up after sale service to know the extent of satisfaction. In conclusion, the paper inquired about customers’ experience and carried out a comparative analysis on UAE’s medical insurance clients on their expectation and final perception. It has established the results by using the (SERVQUAL) a quality measurement tool. It was found that, the delivery of the services to the customers in many cases did not meet the expectations after experiencing the service. This is partially because the health sector in the UAE has grown over the past decade because of the massive investment both in the country and private players. After the analysis of the paper, the major recommendation is that the companies ought to have proper a Customer service and indemnify departments for speedy compensation. Lastly, investments must be made to improve systems used in the companies. Reference List Andrew , S. 2012. Quality of servicing in nursing homes. London; McMillan Pub. Bollinger, W. 2013. An empirical assessment of the SERVQUAl- scale, Journal of Business Research, 24, pp. 254-263. Burns, T. 2012. Researching customer service in the public sector, Journal of the Market Research Society, 34, pp.53-60. Carman, J.M. 2010. Consumer perceptions of service quality: an assessment of the SERVQUAL dimensions, Journal of Retailing, 66, pp. 33-4. Grace C.A. 2011. Service quality model and its marketing implications, European Journal of Marketing, 18, pp. 36-40. Kettinger, W, J, and Lee, C. L. 2010. Pragmatic perspectives on the measurement of information systems service quality, MIS Quarterly, 21(2) pp. 223-240 McGill, A. 2010. Explorations in Quality Assessment and Monitoring. Vol. 1, The Definition of Quality and Approaches to Its Assessment (NHealth Administration Press). Pons, et al. 2012. 10 years of service quality measurement: reviewing the use of the SERVQUAL instrument, Cuadernos de Diffusion, 7(13), pp. 101-7. Stark, S. 2012. Quality of servicing in nursing homes. Health Services Management Research, Vol. 13, pp. 205-15. Zinny , W. 2013. The SERVQUAl- scale, Journal of Business Research, 24, pp. 254-263. Read More