Service Concept Profiling and the SERVQUAL Model in Business - Essay Example

CRITIQUE OF SERVICE CONCEPT, SERVICE CONCEPT PROFILING AND THE SERVQUAL MODEL IN BUSINESS Submitted A new business enterprise either implicitly or explicitly employs specific business theory, concept, technique or management ideas that explains the architecture or the design of delivery, value creation or identifies the employed mechanisms. The significance of the theory, concept, management idea and technique is to define the enterprises delivery of value to its clients, entice clients to pay for its value, and conversion of the value paid into profits. Consequently, it reflects managerial hypothesis about customer needs, taste and preferences, and how the business enterprise can work best to meet the customer’s needs and in the end realize profits. Global economic developments have transformed traditional relationship between the customer’s clients and suppliers. Emergence of new technologies and communication as well as the establishment of open trading global regimes has resulted in wide customer choice, and creation of alternative supply that is more transparent. Business Enterprises should tailor their products to suit the needs of the customers due to the fact that technology has evolved leading to low cost dissemination of information and customer solutions (Lee, Lee and Yoo, 2000, p.218). These transformations have forced business enterprises to carry out evaluation of the value they present to their clients. The new business environment has also emphasized the need to capture the value for provision of services and new products and in the process ensuring that the need of the customers are adequately met. A well developed business model will ensure the growth of the business enterprise and the absence of a business model will result in the failure of the business, and failed innovation. This aspect is clearly evident in the internet market due to the fact that revenue creation is more perplexing due to customer expectations of free services (Lee, Lee and Yoo, 2000, p.228). Service concept is fundamental in business management. Service concept provides an opportunity for both the client and the supplier to identify their expectation as well as what not to expect from a product or a service. Services that are clearly defined provides the customer with a clear understanding of what the service offers with inclusion of what each service does not offer , for example, service limitations, eligibility, how to make a request for a service, cost and how to get assistance. An elaborate service defines internal procedures that are relevant in the provision and support of the service. So as to conceptualize a service, five key questions must be answered. These include questions on service description (the type of service and where it can be found), questions that deals with self service and help (how to use the service being provided or how to get assistance), questions that touch on pricing and service cost (what is the price of the service), and finally questions that deals with service support and service delivery. The concept of service ensures that there is an overall accountability in the process of ensuring delivery of services is in accordance to the management life cycle and agreed enterprise requirements. Service profiling concept in business provides data and articulates logic and other proves that illustrates how a business delivers and creates value for its clients. It also describes revenue, profit and costs architecture that is associated with the enterprise that delivers the stated value. Factors related to a good service concept design are interrelated and is fundamental to business strategists questions (how does business enterprise create a sustainable competitive merit and realize supernormal profits). In summary, service profiling concept in business entails creation and delivery of value and the process of converting value payments into profits. So as to realize innovational profits, business entrepreneurs need to ensure excellence in product innovation and service delivery as well as have a clear understanding of the business design technological trajectories and customer needs. Successful development of a business concept is not enough in ensuring competitive merit since it is often easy for products to be imitated. Service profiling concept in business is a pathway to innovation and competitive advantage which could lead to service differentiation making it hard for the product to be replicated by new suppliers in the market (Oliver, 2007, p.480). Business concept models lacks theoretic framework in business studies and economics. This is due to the fact that it lacks established position in economic theory that creates business models. Economic theories hold the assumption that trade thrives around intangible and tangible products. Where, economic theories assume standard competitive market approach to the problem of value capturing. In these regard, innovations are usually assumed to have the ability to naturally create value and enjoys iron- clad patents protection. Through increased sells in established markets, firms can gain control of value. Examples of theoretic models in business includes: the traditional industries- a good example of these model is the American innovation company known as Swift and Company that was involved in meat re- engineering packing industry. Before 1870s, shipment of cattle was done via rail from stockyard centers in the Midwestern like Kansas city, Chicago, and Omaha to the East Coast where slaughtering of the animals were conducted and the meat sold to the residents by the butchers operating within the East Coast. Gustavo’s Swift realized that the animals could be slaughtered in Mid West and be shifted to distance markets in fright cars that were refrigerated. This could result in greater economic saving in terms of reduced transportation cost and, as a consequence leading to improvement in the quality of the final product (Oliver, 2007, p.483). The second theoretic business model is that of the internet or information industries. Information or internet industries poses great challenges to effective and efficient business models, since it is difficult to price services and, consumers are able to access information in numerous ways without paying for the product. In the information sector it is fundamental to evaluate the expected capture value from clients. In the information sector, Varian and Shapiro strategic elements are core in strategic engagement. Presently, business and management theories that are influential span across diverse academic schools including sociology, psychology, and economics. However, these academic disciplines have increased convergence due to pessimistic human nature, this occurs when the theory is concerned with the role of companies in society and on the corporate change and adaptation process . These negative assumptions are strongly evident in dimensions of strong determinism and are evident in institutional and ecological analysis of corporations. This denies the probability of goal- directed and purposeful behavioral adaptations of theories in firms. This could lead to increased focus on value appropriation instead of value creation in most strategic theories as well as the shrinking, inertia and opportunism assumptions in organizational economic analysis (Oliver, 2007, p.486). In order to increase productivity of an organization and the quality of service rendered, implementation of management theories is paramount. In work places managers utilize a variety of theories in the process of implementing strategies; the choice of theories to be implemented largely depends on workforce, purpose and workplace. Popular theories of management include chaos theory, system theory and contingence theory. To begin with, chaos theory holds the premise that change is usually constant. In chaos theory change is inevitable and it cannot be controlled. Growth in the organization results in increased chances for occurrence of skeptical events and complexities. In order to sustain the emerging complexities, the organization channels more energy through improved structure so as to maintain its stability. Contingency theory holds the view that managerial decisions are made basing on circumstances at hand. Appropriate action is taken by the manager basing on the most significant aspect to the present circumstance. For instance, in a university, the manager may chose to use leadership approach with inclusion of worker participation while an army leader would utilize autocratic approach. The final theory is known as the system theory, this theory postulates that managers have a clear understanding of the system and recognizes how the system affects workers and how workers influence the system around them. According to this theory, a system comprise of different components that work in unison so as to achieve the objectives and goals of a business enterprise. However, scholars refute the aspect that a business can thrive well while utilizing only one theoretic approach. Managers should incorporate all theories so as to ensure the success of the business entity (Tse and Wilton, 2008, p.205). Customer satisfaction and service quality are significant concepts that must be understood by companies so as to grow and remain competitive. It is necessary for companies to identify and evaluate constructs that relates to consumer perspective, that is, expectations and perceptions; this will lead to understanding the consumer and as a result satisfying their needs. The quality of a service is significant since it leads to improved customer satisfaction, reduced cost, customer loyalty, retention and profitability. In a study carried out to determine the theoretic application of SERVQUAL model in a business and on how consumers perceive the quality of a service and whether the satisfied them; careful analysis of the results showed that, SERVQUAL model is not an effective instrument in the process of measuring service quality due to the fact that commodities in the same dimension regroup and overlap from different factor analysis dimensions carried out (Tse and Wilton, 2008, p.209) The SERVQUAL model also indicated that some items associated to several components. Some dimensions indicated less than 0.7 scale of reliability. The study also established that the overall customer perception on the quality of a service was not satisfactory. This meant that the expectations of customers exceeded customer perception. The study also indicated that all customer dimensions indicated higher service expectations in comparison to service perception. Theoretically, according to the findings, SERVQUAL model is not an elaborate service quality measurement tool in a business entity. This is due to the fact that constructs are not measurable in that context. Pragmatic implications shows that businesses tend not to provide the expected service quality by customers. The study findings through gap analysis further showed businesses need to better all spheres of service quality. In addition, SERVQUAL model experiences a number of criticisms from different dimensions: theoretic criticisms which include paradigm objections- this criticism holds the view that SERVQUAL model depends on disconfirmation paradigm instead of attitudinal paradigm. This means that SERVQUAL does not draw its assumptions from psychological, statistical, and economic theory; secondly, gaps model that holds the view that their exist little evidence that P- E gap is utilize by customers during the process of assessing service quality; thirdly, process orientation, under these assumption SERVQUAL mainly focuses on service delivery process and not the service encounter outcomes; fourthly, dimensionality, here the dimensions of SERVQUAL are not universal. This means that there is contextualization of number of service quality dimensions. There exists a high correlation between the five SERVQUAL dimensions, that is, assurance, reliability, tangibility, responsiveness and empathy (Teas, 2003, p.20). There also exists operational criticism on the SERVQUAL model that comprises of: expectations, clients have different expectations that they use to in the process of evaluating the quality of a service and, SERVQUAL does not measure absolutely the expectations of a customer on service quality; item composition-this means several items do not meet the same dimension on the quality of a service.; Moment of Truth , this means there is variability in measurement of service quality by different customers.; Polarity- items reversed polarity in a scale results in respondent error; scale point- Likert seven- point scale is flawed; two administrations- administration of two instruments, that is, perception and expectation results in confusion and boredom; variance extracted- SERVQUAL model is responsible for items variance disappointing proportions (Teas, 2003, p.25). Increasing challenges in business has resulted in development of new theoretic frame work and business models utilize in ensuring the growth of a business venture. However, these theories and models experience numerous limitations. The limitations could be utilized by scholars so as to develop a more workable business model that would ensure increase service quality, customer satisfaction and profit realization for the business entity. Bibliography Lee, H., Lee, Y. and Yoo, D., 2000. The Determinants of Perceived Service Quality and It’s Relationship with Satisfaction. Journal of Service Marketing, 14(3), pp.217-231 Oliver, R. L., 2007. Effect of Expectation and Disconfirmation on Post Exposure Product Evaluation. Journal of Applied Psychology, 62(4), pp.480-486. Teas, R. K., 2003. Expectations, Performance Evaluation, and Consumers’ Perceptions of Quality. Journal of Marketing, 57(4), pp.18–34. Tse, D.K. and Wilton, P.C., 2008. Models of Consumer Satisfaction Formation: An Extension. Journal of Marketing Research, 25(2), pp.204-212. Read More