1. Models of service quality

2. The evolution of service quality
Disconfirmation of expectations
The Nordic model
The three component model
The Gaps model of service quality & SERVQUAL
Various researchers have developed models of service quality. Five of the key models include, in chronological order: the disconfirmation of expectations model (Oliver 1977, 1980, 1981); the Nordic model developed by Grönroos (1982; 1984); the SERVQUAL/Gaps model developed by Parasuraman, Zeithaml and Berry (1985, 1988, 1991); and the three-component model developed by Rust and Oliver (1994). More recently, researchers (Dabholkar, Thorpe & Rentz 1996, Brady & Cronin 2001) have focused on integrating the perspectives of these four service quality models in an effort to extend current thought in service quality into the twenty-first century. It is important that we explore each of these models so that we can see how service quality as a construct has developed over time. We begin with the disconfirmation of expectations model, which is the cornerstone of service quality research.
Student activity
Ask students to think about tertiary education. What constitutes quality in education? Ask students in groups to write down how they would assess quality in education. Provide two or three groups with overheads to write their answers on. Use the student overheads to highlight the aspects identified as you talk about each model in turn.

3. Disconfirmation of expectations (Oliver 1980)
Much of the early service quality theory draws from research into how disconfirmed expectations affect product perceptions. That is, if our expectations are not met we change our perception and attitude toward a product. Many early models of service quality are based on the disconfirmation model used in the physical goods literature (Oliver 1977).
The disconfirmation of expectations model shown in figure 4.1 was developed from the seminal work of Oliver (1980). This model proposes three determinants of customer (dis)satisfaction: expectations, perceptions and (dis)confirmation. Using adaptation level theory as a basis, Oliver (1980) claims that customers form expectations before the purchase of a product or service, with expectations acting as a standard or frame of reference against which the service performance is judged. Within this conceptualisation, expectations form a baseline for consumers’ satisfaction levels. The higher the expectation in relation to actual performance, the greater the degree of disconfirmation and the lower the level of satisfaction to be achieved.
The model also implies that if customer expectations for a service are relatively low, then they may be satisfied with a service experience even if the performance is poor. For example, if a restaurant has a reputation for very inexpensive meals, customers will probably expect to wait or queue for a table and may not expect a high degree of personal service.

4. Frequently Asked Questions About Customer Expectations
Should a company aim to ‘delight’ the customer?
How does a company exceed customer service expectations?
Do customer service expectations continually escalate?
Is it a better strategy to under-promise and over-deliver?
How does a service company stay ahead of competition in meeting customer expectations?

5. The Nordic model (Gronroos 1990)
Represents the service experience on the basis of functional and technical elements
Technical quality refers to what the customer receives from the service
Functional quality refers to service delivery
Model emphasises companies must be careful what they promise
Grönroos’s (1984) model represents the service experience on the basis of functional and technical elements. The concept of technical quality refers to what the consumer receives from the service, or the outcome of the service process — for example the actual haircut from a hairdresser or legal advice from a solicitor.
The functional quality of the service refers to the way the service is delivered as reflected through the consumer’s perception of interactions that occur during the service encounter. This might include, for example, the friendliness of the hairdresser, the amount of attention given to the customer and so on. Within this model, Grönroos contends that, in forming service quality perceptions, consumers compare the expected level of service and the actual service performance they receive.
The key implication of this model for managers is the clear distinction drawn between the service itself and how it is delivered. This model emphasises that companies must be careful what they promise to consumers. The attributes and benefits popularised by companies through traditional marketing activities, such as advertising and promotion, must be realistic when compared to the service that customers eventually receive. If firms promise a level of service above what they can actually deliver, customers will be unsatisfied and unhappy with the service they receive.

6. The three-component model Rust & Oliver (1994)
The three-component model includes factors relating to the service product, service delivery and service environment, as shown in figure 4.3.
The service product is the consumer’s overall perceptions of the service offering and outcome, including any additional services that accompany its delivery. The service delivery refers to the interaction between consumers and the organisation within the service setting. Because services are intangible, variable and inseparable, the communication between provider and customer shapes the way the customer perceives the service delivery. The service environment is the internal and external environment. Literature on the internal environment focuses on the organisational culture and philosophy of management. The external environment, termed the ‘servicescape’ by Bitner (1992) reflects the setting in which the service is delivered.
The implications of this model are that organisations can target three main elements of service quality to improve their overall service quality. The model helps us to better understand how service quality works and suggests the elements on which managers should base service quality research. Management would need to develop surveys that reflect these three dimensions, in their specific industries, to properly assess consumers’ service quality perceptions.
Source: Rust & Oliver, p. 11

7. Customer expectations of service
Types of expectations customers hold for service performance
Sources of customer expectations

8. Possible Levels of Customer Expectations

9. Dual customer expectations levels and the Zone of Tolerance
Desired Service
Zone of
Tolerance
Adequate Service

10. Zones of Tolerance for Different Service Dimensions
Desired Service
Zone of
Tolerance
Level of
Expectation
Desired Service
Zone of
Tolerance
Adequate Service
Adequate Service
Reliability
Tangibles
Source: L. L. Berry, A. Parasuraman, and V. A. Zeithaml, “Ten Lessons for Improving Service Quality,” Marketing Science Institute, Report No (May 1993).

11. Factors That Influence Desired Service
Lasting Service
Intensifiers
Desired Service
Personal Needs
Zone of
Tolerance
Adequate Service

12. Factors That Influence Adequate Service
Temporary Service
Intensifiers
Desired Service
Perceived Service
Alternatives
Zone of
Tolerance
Self-Perceived
Service Role
Predicted
Service
Adequate Service
Situational
Factors

13. Factors That Influence Desired and Predicted Service
Explicit Service
Promises
Implicit Service
Promises
Word-of-Mouth
Desired Service
Zone of
Tolerance
Past Experience
Predicted
Service
Adequate Service

14. Customer perceptions Factors which influence consumers’ perceptions
Factors which influence satisfaction
Dimensions of service quality
Service encounters

15. Customer Perceptions of Quality and Customer Satisfaction

16. Factors Influencing Customer Satisfaction
Product/service quality
Specific product or service features
Consumer emotions
Attributions for service success or failure

17. Factors Influencing Customer Satisfaction
Perceptions of equity or fairness
Other consumers, family members, and coworkers
Price
Personal factors
the customer’s mood or emotional state
situational factors

18. Outcomes of Customer Satisfaction
Increased customer retention
Positive word-of-mouth communications
Increased revenues

19. Service Quality
The customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.
Service quality assessments are formed on judgments of:
outcome quality
interaction quality
physical environment quality

20. The SERVQUAL dimensions – Perceived Service Quality (Parasuraman, Zeithaml & Berry 1988)
Reliability (dependability, accurate performance)
Assurance (competence, courtesy, credibility & security)
Tangibles (appearance of physical elements)
Empathy (easy access, good communications & customer understanding)
Responsiveness (promptness & helpfulness)
Reliability refers to the firm’s ability to deliver a promised service dependably and accurately (Parasuraman, Zeithaml & Berry 1985). An example of this is a taxi driver arriving promptly and taking you to your destination safely and efficiently.
Assurance refers to the knowledge and courtesy of employees and their ability to inspire trust and confidence (Parasuraman, Zeithaml & Berry 1985). For example, an accountant is knowledgeable, skilled, qualified and has a good reputation.
Tangibles are the physical facilities, equipment and the appearance of staff (Parasuraman, Zeithaml & Berry 1985). For example, a hairdressing salon should be neat and tidy, employees appropriately dressed, and so on.
Responsiveness refers to the service provider’s willingness to help customers and provide prompt service (Parasuraman, Zeithaml & Berry 1985). In a dentist surgery, for example, the dentist should be accessible, there should be no waiting and staff should be willing to listen.
Empathy is demonstrated by giving caring, individualised attention to customers (Parasuraman, Zeithaml & Berry 1985). For example, employees should understand consumers’ needs, listen to their concerns and be patient.

21. The Five Dimensions of Service Quality
Reliability
Ability to perform the promised service dependably and accurately.
Knowledge and courtesy of employees and their ability to inspire trust and confidence.
Physical facilities, equipment, and appearance of personnel.
Caring, individualized attention the firm provides its customers.
Willingness to help customers and provide prompt service.
Assurance
Tangibles
Empathy
Responsiveness

22. Exercise to Identify Service Attributes
In groups of five, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customer’s point of view.
Reliability:
Assurance:
Tangibles:
Empathy:
Responsiveness:

23. SERVQUAL Attributes RELIABILITY EMPATHY RESPONSIVENESS TANGIBLES
Providing service as promised
Dependability in handling customers’ service problems
Performing services right the first time
Providing services at the promised time
Maintaining error-free records
EMPATHY
Giving customers individual attention
Employees who deal with customers in a caring fashion
Having the customer’s best interest at heart
Employees who understand the needs of their customers
Convenient business hours
RESPONSIVENESS
Keeping customers informed as to when services will be performed
Prompt service to customers
Willingness to help customers
Readiness to respond to customers’ requests
TANGIBLES
Modern equipment
Visually appealing facilities
Employees who have a neat, professional appearance
Visually appealing materials associated with the service
ASSURANCE
Employees who instill confidence in customers
Making customers feel safe in their transactions
Employees who are consistently courteous
Employees who have the knowledge to answer customer questions

24. The Service Encounter is the “moment of truth”
occurs any time the customer interacts with the firm
can potentially be critical in determining customer satisfaction and loyalty
types of encounters:
remote encounters, phone encounters, face-to-face encounters
is an opportunity to:
build trust
reinforce quality
build brand identity
increase loyalty

25. A Service Encounter Cascade for a Hotel Visit
Check-In
Bellboy Takes to Room
Restaurant Meal
Request Wake-Up Call
Checkout

26. A Service Encounter Cascade for an Industrial Purchase
Sales Call
Delivery and Installation
Servicing
Ordering Supplies
Billing

27. Critical Service Encounters Research
GOAL:
understanding actual events and behaviors that cause customer dis/satisfaction in service encounters
METHOD:
Critical Incident Technique
DATA:
stories from customers and employees
OUTPUT:
identification of themes underlying satisfaction and dissatisfaction with service encounters

28. Sample Questions for Critical Incidents Technique Study
Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with an employee of ______________.
When did the incident happen?
What specific circumstances led up to this situation?
Exactly what was said and done?
What resulted that made you feel the interaction was satisfying (dissatisfying)?

29. Common Themes in Critical Service Encounters Research
Recovery:
Adaptability:
employee response
to service delivery
system failure
employee response
to customer needs
and requests
Coping:
Spontaneity:
unprompted and
unsolicited employee
actions and attitudes
employee response
to problem customers

30. Recovery DO DON’T Acknowledge problem Explain causes Apologize
Compensate/upgrade
Lay out options
Take responsibility
Ignore customer
Blame customer
Leave customer to fend for him/herself
Downgrade
Act as if nothing is wrong
“Pass the buck”

31. Adaptability DO DON’T Recognize the seriousness of the need
Acknowledge
Anticipate
Attempt to accommodate
Adjust the system
Explain rules/policies
Take responsibility
Ignore
Promise, but fail to follow through
Show unwillingness to try
Embarrass the customer
Laugh at the customer
Avoid responsibility
“Pass the buck”

32. Spontaneity DO DON’T Take time Exhibit impatience Be attentive Ignore
Anticipate needs
Listen
Provide information
Show empathy
Exhibit impatience
Ignore
Yell/laugh/swear
Steal from customers
Discriminate

33. Coping DO DON’T Listen Try to accommodate Explain
Let go of the customer
Take customer’s dissatisfaction personally
Let customer’s dissatisfaction affect others

34. Evidence of Service from the Customer’s Point of View
Contact employees
Customer him/herself
Other customers
Operational flow of activities
Steps in process
Flexibility vs. standard
Technology vs. human
People
Physical
Evidence
Tangible communication
Servicescape
Guarantees
Technology
Website
Process
Source: From “Managing the Evidence of Service” by M. J. Bitner from The Service Quality Handbook, eds. E. E. Scheuing and W. F. Christopher (1993), pp

35. UNDERSTANDING CUSTOMER REQUIREMENTS

36. Company Perceptions of Consumer Expectations
Provider Gap 1
CUSTOMER
Expected Service
Listening Gap
COMPANY
Company Perceptions of Consumer Expectations
Part 3 Opener

37. Listening to customers through market research
Using Marketing Research to Understand Customer Expectations
Elements in an Effective Services Marketing Research Program
Analyzing and Interpreting Marketing Research Findings
Model Services Marketing Research Programs
Using Marketing Research Information
Upward Communication

38. Objectives for Chapter 6: Listening to Customers through Research
Present the types of and guidelines for marketing research in services.
Show how marketing research information can and should be used for services.
Describe the strategies by which companies can facilitate interaction and communication between management and customers.
Present ways that companies can and do facilitate interaction between contact people and management.

39. Common Research Objectives for Services
To discover customer requirements or expectations for service.
To monitor and track service performance.
To assess overall company performance compared with that of competition.
To assess gaps between customer expectations and perceptions.
To identify dissatisfied customers, so that service recovery can be attempted.
To gauge effectiveness of changes in service delivery.
To appraise the service performance of individuals and teams for evaluation, recognition, and rewards.
To determine customer expectations for a new service.
To monitor changing customer expectations in an industry.
To forecast future expectations of customers.

40. Criteria for an Effective Service Research Program
Includes both qualitative and quantitative research
Includes both expectations and perceptions of customers
Balances the cost of the research and the value of the information
Includes statistical validity when necessary
Measures priorities or importance of attributes
Occurs with appropriate frequency
Includes measures of loyalty, behavioral intentions, or actual behavior

41. Stages in the Research Process
Stage 1 : Define Problem
Stage 2 : Develop Measurement Strategy
Stage 3 : Implement Research Program
Stage 4 : Collect and Tabulate Data
Stage 5 : Interpret and Analyze Findings
Stage 6 : Report Findings

42. Portfolio of Services Research
Research Objective
Type of Research
Identify dissatisfied customers to attempt recovery; identify most common categories of service failure for remedial action
Customer Complaint Solicitation
“Relationship” Surveys
Post-Transaction Surveys
Customer Focus Groups
“Mystery Shopping” of Service Providers
Employee Surveys
Assess company’s service performance compared to competitors; identify service-improvement priorities; track service improvement over time
Obtain customer feedback while service experience is fresh; act on feedback quickly if negative patterns develop
Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas
Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service
Measure internal service quality; identify employee-perceived obstacles to improve service; track employee morale and attitudes
Determine the reasons why customers defect
Lost Customer Research
Future Expectations Research
Forecast future expectations of customers; develop and test new service ideas