2. Chapter 11
Managing service processes

3. Lecture objectives
Understand the importance of effective management of service processes to hospitality marketing
Evaluate dimensions of service quality in a hospitality context
Identify the principal reasons for service failure
Use service blueprinting to map a hospitality service process
Understand why, when and how customers complain about their hospitality experiences
Explain service recovery strategies for hospitality companies

4. Introduction
Managing service production and delivery processes is the responsibility of operations management
Marketing managers need to understand the principles of service operations management to ensure customers are satisfied
Managing demand is easier when the service process delivers what customers expect
When the service fails to deliver, marketing the hospitality brand is difficult
Hospitality businesses must deliver consistent service quality despite the constraints of intangibility, inseparability, seasonality and variability

5. Types of service process
Vertical processes are located within one department – food production operations
Horizontal processes are cross-functional – conference/events involve sales, reservations, operations, front desk, housekeeping and general management
Front-office processes interact with customers – check- in/check-out and food/beverage operations
Back-office processes hidden from customers – procurement processes
Some processes involve both front- and back-offices – front desk provides corporate customers with the bill and back office invoices the company

6. Five dimensions of service quality (SERVQUAL)
Reliability
Ability to perform the promised service dependably and accurately
Empathy
Caring, individual attention given to the customer
Tangibles
Appearance of physical facilities, equipment, employees and communication materials
Responsiveness
Willingness to help customers and provide prompt service
Assurance
The knowledge and courtesy of employees, and their ability to convey confidence and inspire trust Source: Parasuraman, et al. (1985), reproduced with permission of the American Marketing Association

7. Gaps model of service quality
Gap 1: management not knowing what customers expect
Gap 2: service quality standards do not match customer
expectations
Gap 3: service-performance gap
Gap 4: delivering the service promise
Closing the gaps:
When Gaps 1–4 are close, the company will be promising and
producing service experiences that meet customer expectations
When there are significant gaps (1, 2, 3, or 4) between what the
company promises and delivers, then customer expectations are
not met and customers will be dissatisfied
Parasuraman, Zeithaml and Berry (1992)

8. Service blueprinting
A service blueprint is a map that specifies how a service should be delivered
From the moment customers arrive to the moment they leave, all the actions that the customer and/or employees carry out are mapped on a diagram (see Figure 11.1)
The service blueprint has three horizontal lines:
Line of interaction – separates customers from front-of-house employees
When a vertical line crosses the line of interaction (e.g. when the customer is greeted), service encounters between customers and employees takes place
Line of visibility – separates front-of-house employee activities that the customer can see from those that cannot be seen
When the restaurant order taker is out of the customer’s sight in the kitchen
Line of internal interaction – internal service encounters take place which customers cannot see
By mapping service processes from a customer’s perspective, management can set service standards, develop service production and delivery processes that meet customers’ expectations

9. Figure 11.1 Mapping a restaurant service, customer
service encounter (x = internal service encounter)

10. Complexity and divergence in hospitality services
Service processes can be defined by complexity and diversity
The level of service complexity is the number of steps needed to perform the service:
fewer steps = lower complexity; more steps = greater complexity
The level of divergence refers to the degree of tolerance allowed in performing the service process:
some service processes are highly standardized and have a low degree of diversity; some operations allow employees more autonomy in delivering the service and have greater diversity
See Figure 11.2 for some examples

11. Figure 11.2 Complexity and divergence in hospitality services
Level of complexity
Lower Higher
Sandwich shop
Customized event catering
Street vendor
Gourmet restaurant
Lower Higher
Level of divergence
Figure Complexity and divergence in hospitality services

12. Service process strategies
1. Complexity reduction strategy
Reduces complexity in service process by reducing the number of steps to produce service (restricting menu)
Reducing complexity improves consistency and reduces costs
Could risk alienating existing customers
2. Increased complexity strategy
Increasing complexity means adding more activities to the existing service (more items on menu)
Increased complexity can create service quality problems and increase costs
3. Divergence reduction strategy
Reducing the level of divergence in the service implies more standardization
Higher level of standardization should increase productivity and reduce costs
This service process strategy is linked to volume sales and mass-marketing
4. Increased divergence strategy
Increasing divergence gives greater customization of the service
This might be niche positioning, e.g. human resource empowerment strategy, encouraging employees to respond to customers’ individual needs

13. Reasons for service failure
Service failures occur when service does not match customer’s
expectations
Typical hospitality service failures include the following:
facilities/services promoted by marketing are not available
physical environment is disappointing (damaged furniture, tired décor, poor hygiene standards, atmosphere not welcoming)
service is slower than expected
standard of cooking is poor (overcooked/undercooked food, too much/too little seasoning, food served at the wrong temperature)
employees who lack product knowledge, do not care or, even worse, are rude to customers
Some service failures are relatively minor for the customer; others
very important
Dissatisfied customers with complaints can complain, create
negative word-of-mouth and even litigate against a hospitality
company

14. When and how customers complain
Concurrently
Customer complains at the same time as the service failure occurs, allows employees to respond and solve the problem. From both the company’s and the customer’s perspective, this is best time to complain
Subsequently
Customers telephone, , text or write letters of complaint. Over time customers can feel more strongly about the service failure and incidents can be magnified. Since customer contacted company, complaint can still be managed
Third-party complaints
Unhappy customers complain to organizations (consumer bodies, governments, tourist boards, motoring organizations) hotel and restaurant guide books. Organization responds to customer complaints and agree action to resolve complaint with company
Online complaints
Unhappy customers complain online through travel sites (TripAdvisor). Some hotels respond effectively to online complaints – many do not
Negative word-of-mouth
Some unhappy customers do not complain to the company, but tell their family and friends about the ‘poor’ service and generate negative word-of-mouth publicity; this can be compounded when the negative W-o-M is online

15. Service recovery strategies
Zero defects strategy
Borrowed from manufacturing and Total Quality Management (TQM)
Key idea to design out every potential problem before it can occur
The special characteristics of services make the adoption of a zero defects strategy difficult to implement but working to reduce operational service failures can reduce complaints
Encourage complaints!!!
Companies can improve customer service by learning from complaints
Encouraging customers to complain can help to improve service quality
Treat customers fairly when they complain
Customers have a sense of ‘fairness’
Outcome fairness refers to the tangible result the customer expects to receive after a complaint
Customers expect fair compensation relative to the complaint
Procedural fairness refers to the company’s policy for handling complaints. When a problem arises, customers want the first employee to sort out the problem quickly and efficiently or find someone who can
Interactional fairness refers to customers expecting employees and management to treat them politely and honestly. Customers want companies to genuinely care about their problem

16. Conclusion
Processes can be categorized as vertical or horizontal; or front office or back-office
Managing service processes helps to deliver customer satisfaction
Five dimensions of service quality are: reliability, empathy, tangibles, responsiveness and assurance
The gaps model of service quality helps to explain the gap between customer expectations and perceptions of service quality
You can map a hospitality service using blueprinting
Complexity and divergence service process strategies can improve service quality and profitability
The reasons for service failure in a hospitality context
When and how customers complain
The important role of service recovery strategies

17. References and further reading
Gummesson, E. and Kingman-Brundage, J. (1991). ‘Service design and quality: applying service blueprinting and service mapping to railroad services’. In P. Kunst and J. Lemmink (eds) Quality Management in Services. Van Gorcu.
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, pp. 41–50.
Parasuraman, A., Zeithaml, V. and Berry, L. L. (1992). ‘Achieving service quality through gap analysis and a basic statistical approach’. Journal of Services Marketing, 6 (1), pp. 5–14.
Shostack, L. (1981). ‘Service positioning through structural change’. Journal of Marketing, 51, pp. 34–43.
Singh, J. (1990). ‘A typology of consumer dissatisfaction response styles’. Journal of Retailing, 66 (1), pp. 57–99.
Tax, S. S. and Brown, S. W. (1998). ‘Recovering and learning from service failure’. Sloan Management Review, 40, pp. 61–75.
Zeithaml, V. A. and Bitner, M. J. (2009). Services Marketing. McGraw-Hill.