1. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 1 Chapter 14: Improving Service Quality and Productivity

2. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 2 Components of Quality: Service-based Tangibles: Appearance of physical elements Reliability: Dependable and accurate performance Responsiveness: Promptness; helpfulness Assurance: Competence, courtesy, credibility, security Empathy: Easy access, good communication, understanding of customer

3. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 3 How Customers Might Evaluate Online Businesses: Seven Dimensions of E-S-QUAL  Accessibility : Is site easily found?  Navigation: How easy is it to move around the site?  Design and presentation: Image projected from site?  Content and purpose: Substance and richness of site  Currency and accuracy  Responsiveness: Firm’s propensity to respond to e-mails  Interactivity, customization, and personalization  Reputation and security

4. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 4 Service Quality (SERVQUAL) Questionnaire Items 4 n Providing service as promised n Dependability in handling customers’ service problems n Performing services right the first time n Providing services at the promised time n Maintaining error-free records n Keeping customers informed as to when services will be performed n Prompt service to customers n Willingness to help customers n Readiness to respond to customers’ requests RELIABILITY RESPONSIVENESS n Employees who instill confidence in customers n Making customers feel safe in their transactions n Employees who are consistently courteous n Employees who have the knowledge to answer customer questions ASSURANCE n Giving customers individual attention n Employees who deal with customers in a caring fashion n Having the customer’s best interest at heart n Employees who understand the needs of their customers n Convenient business hours EMPATHY n Modern equipment n Visually appealing facilities n Employees who have a neat, professional appearance n Visually appealing materials associated with the service TANGIBLES

5. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 5 QUESTIONS USED TO MEASURE SERVQUAL (CLASSROOM LECTURE) Empathy 1. The instructor is genuinely concerned about the students. 2. The instructor understands the individual needs of students. 3. The instructor has the student’s best long-term interests in mind. 4. The instructor encourages and motivates students to do their best. Assurance 1. The instructor is knowledgeable in his/her field. 2. The instructor is fair and impartial in grading. 3. The instructor answers all questions thoroughly. 4. I am confident the instructor has an expert understanding of the material.

6. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 6 Responsiveness 1. The instructor quickly and efficiently responds to student needs. 2. The instructor is willing to go out of his or her way to help students. 3. The instructor always welcomes student questions and comments. Reliability 1. The instructor consistently provides good lectures. 2. The instructor is dependable. 3. The instructor reliably corrects information when needed.

7. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 7 Tangibles 1. The classroom is modern and updated. 2. The physical environment of the classroom aids learning. 3. The classroom is equipped with all the necessary equipment to aid learning. 4. The classroom is kept clean and free of distractions.

8. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 8 Measuring and Improving Service Quality

9. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 9 Soft and Hard Measures of Service Quality  Soft measures—not easily observed, must be collected by talking to customers, employees, or others  Provide direction, guidance, and feedback to employees on ways to achieve customer satisfaction  Can be quantified by measuring customer perceptions and beliefs ― For example: SERVQUAL, surveys, and customer advisory panels  Hard measures—can be counted, timed, or measured through audits  Typically operational processes or outcomes  Standards often set with reference to percentage of occasions on which a particular measure is achieved  Control charts are useful for displaying performance over time against specific quality standards

10. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 10 Hard Measures of Service Quality  Control charts to monitor a single variable  Offer a simple method of displaying performance over time against specific quality standards  Are only good if data on which they are based is accurate  Enable easy identification of trends  Service quality indexes  E mbrace key activities that have an impact on customers

11. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 11 Composition of FedEx’s Service Quality Index—SQI (Table 14.4) Late delivery—right day Late Delivery—wrong day Tracing request unanswered Complaints reopened Missing proofs of delivery Invoice adjustments Missed pickups Lost packages Damaged packages Aircraft delays (minutes) Overcharged (packages missing label) Abandoned calls 1 5 1 5 1 10 5 1 Failure Type Total Failure Points (SQI) = Weighting Factor XXX,XXX Daily Points X Number of Incidents =

12. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 12 Control Chart for Departure Delays (Fig 14.4) JFMAMJJASOND 60% 70% 80% 90% 100% Month % Flights Departing Within 15 Minutes of Schedule

13. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 13 Tools to Analyze and Address Service Quality Problems  Fishbone diagram  Cause-and-effect diagram to identify potential causes of problems  Pareto Chart  Separating the trivial from the important. Often, a majority of problems is caused by a minority of causes (i.e. the 80/20 rule)  Blueprinting  Visualization of service delivery, identifying points where failures are most likely to occur

14. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 14 Cause-and-Effect Chart for Flight Departure Delays (Fig 14.5) Aircraft late to gate Late food service Late fuel Late cabin cleaners Poor announcement of departures Weight and balance sheet late Delayed Departures Delayed check-in procedure Acceptance of late passengers Facilities, Equipment Front-Stage Personnel Procedures Materials, Supplies Customers Gate agents cannot process fast enough Late/unavailable airline crew Arrive late Oversized bags Weather Air traffic Frontstage Personnel Procedures Materials, Supplies Backstage Personnel Information Customers Other Causes Mechanical Failures Late pushback Late baggage

15. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 14 - 15 Late passengers Waiting for pushback Waiting for fuelling Late weight and balance sheet Late cabin cleaning/supplies Other Newark All stations, excluding Chicago-Midway Hub Washington Natl. 23.1% 15.3% 15.4% 53.3% 15% 11.3% 8.7% 11.7% 33.3% 19% 9.5% 4.9 % Case: Analysis of Causes of Flight Departure Delays