The Zone of Tolerance

Extensive theoretical and empirical work has been conducted in the Marketing discipline to understand and explain the link between customer satisfaction and service quality. The greatest volume of research has focused upon the disconfirmation theory, which holds that satisfaction (dissatisfaction) is dependent upon the size of the confirmation (disconfirmation) of the service customers initial expectations (Churchill and Surprenant 1982). A similar theory, the Gaps Model of service quality, holds that customer satisfaction is based upon perceptions of service quality relative to the customers initial expectations (Parasuraman, Zeithaml, and Berry 1985). Both perspectives place great emphasis upon the role that expectations serve in the satisfaction development process. A refinement of the Gaps Model of service quality is the norms-based zone of tolerance model, introduced by Zeithaml, Berry and Parasuraman (1993) and further refined by Parasuraman, Zeithaml, and Berry (1994). The zone of tolerance (ZOT) is defined as the difference between desired service and the level of service considered adequate (Zeithaml et al 1993, pg. 6). As may be noted in this definition, the ZOT model recognizes that customers enter service encounters with different expectation levels. Desired service is the level of service the customer hopes to receive a blend of what the customer believes can be and should be (Zeithaml et al 1993, pg. 6). On the other hand, adequate service is the level of service the customer will accept (Zeithaml et al 1993, pg. 6). The difference between these two expectation standards is the zone of tolerance. The ZOT model proposes that satisfaction will result as long as customer perceptions of service performance fall in the zone. Zeithaml and her

colleagues (1993) proposed that the ZOT varies across customers and can expand/contract with the same customer. They also proposed that adequate service expectations are subject to change, while desired service expectations are relatively enduring. Parasuraman et al (1994) continued development of the ZOT model by testing three alternative questionnaire formats using an extensive mailing of 12,470 questionnaires. A total of 3069 usable questionnaire were returned for a response rate of 25%. Focusing on the five SERVQUAL dimensions of reliability, responsiveness, assurance, empathy, and tangibles (Parasuraman, Zeithaml, and Berry 1988), the three column format measured the respondents adequate and desired expectations, as well as their perceptions of the service providers performance in identical, side-by-side scales. The two column format generated direct measures of the service-superiority gap (perceived performance on desired service levels) and the serviceadequacy gap (perceived performance on adequate service levels) with identical, side-by-side scales. The one column format generated direct measures of both the service-superiority and service-adequacy gaps, but the questionnaire was split into two parts, with one set of scales designed to measure each of the gaps separately. Parasuraman et al (1994) found that while each of the formats were both reliable and valid, only the three column format offered the ability to determine where perceptions fell relative to the ZOT, the ability to pinpoint ZOT positions, and reduce the chance for inflated ratings and erroneous inferences. Another theoretical article regarding the ZOT was offered by Johnston (1995). Specifically, he theoretically examined the relationship between involvement and the ZOT, as well as the impact of various service performance outcomes upon the ZOT. In relation to the impact of involvement, he proposed that the width of the ZOT is inversely proportional to the degree of involvement (Johnston 1995, pg. 49). In other words, high involvement generates a

narrower ZOT, while low involvement generates a wider ZOT. Similar to Zeithaml et als (1993) contention, he also proposed that (1) performance within the ZOT may go unnoticed by the customer, (2) performance below the customers adequate expectations level (below the ZOT) will generate dissatisfaction, and (3) performance above the customers desired expectations level (above the ZOT) will generate delight, or what Zeithaml et al (1993) termed a customer franchise. It is appropriate to note that disagreement exists in the services marketing literature as to whether perceived service quality should be measured using a performance-based framework or with a standards (or norms)-based framework. Teas and DeCarlo (2004, pg. 272) noted that performance-based frameworks specify perceived performance, without any comparative referents, as the perceived quality concept, while standards-based frameworks specify a relative or comparative performance conceptualization of perceived quality. In other words, does a direct measure of perceived service quality offer greater explanatory power than a normsbased comparative measure? Parasuraman et al (1994) argued that norms-based models (such as the ZOT) would be more useful because of the measurement of more precise information about customer perceptions across the multiple expectations levels. In their study of 107 undergraduate students perceptions of a universitys Student Services Center, Teas and DeCarlo (2004) found that performance-based models offered more explanatory power than the ZOT regarding the relationship between perceived quality and purchase intentions. However, they also found that the ZOT (as the representative norms-based model) offered superior performance (relative to performance-based models) when evaluating the linkage between perceived quality and satisfaction. Hence, they provided support for the ZOT as a useful managerial and research

tool for better understanding how customer perceptions of quality impact satisfaction with the service. Additionally, Voss, Parasuraman, and Grewal (1998) argued that there are instances when a standards-based framework does not provide sufficient explanatory power. Specifically, in their study of 200 faculty members of a large university, these authors found that the standards-based framework was only useful when price and performance were consistent. In other words, they examined how price perceptions impacted the expectations-perceived performance framework. They found that the more customers were price tolerant, the less satisfied they were with a high-price/low-quality offering. On the other hand, for those customers who were initially less price tolerant, satisfaction was greater for the low-price/highquality offering. Yet, in those instances where levels of delivered performance matched the price level (low-price/low-quality; high-price/high-quality), perceived performance was compared against prior expectations to determine satisfaction levels. Additional support for the ZOT model has been provided by Walker and Baker (2000). These authors proposed that the width of the ZOT varies for essential versus less-essential service quality components. They also proposed that the ZOT width would be influenced by the degree of customer experience with the service, as well as the number of competitive alternatives the customers perceived. They surveyed 205 college students regarding health club membership. It was found that the width of the ZOT does indeed varying dependent upon the service quality dimension in question. Specifically, Walker and Baker (2000) found that the ZOT was narrower for the assurance and reliability dimensions than for the empathy, responsiveness, and tangible dimensions of service quality. In relation to customer experience levels, it was found that no significant differences exist between experienced and non-experienced customers on desired

service level expectations. However, the ZOT is narrower for experienced customers because they have increasingly demanding adequate expectations (Walker and Baker 2000, pg. 424). Additionally, these authors found no support for the Zeithaml et al (1993) proposition that the presence of readily available provider alternatives would narrow the ZOT. Walker and Baker (2000) attributed this finding to the stability of the desired expectations standard. Another recent study offered similar findings to those reported by Walker and Baker (2000). Gwynne, Devlin, and Ennew (2000) also investigated the width of the ZOT relative to the different service quality dimensions and found in their study of 218 students that service quality dimensions that are perceived as more important enjoy a wider zone of tolerance. Their results attribute this to higher levels of desired expectations for the most important service quality dimensions. It was also found that these desired expectations tend to be relatively stable. Additionally, customers who were more favorably disposed to the provider (generally more experienced customers) tended to have higher levels of adequate expectations than their less favorably disposed counterparts, and thus tended to have narrower ZOTs. In summary, the Zone of Tolerance (ZOT) model is a standards-based framework for understanding customer perceptions of service quality and satisfaction with the service. While the ZOT is inappropriate in some instances, such as when the primary purpose is to explain the variance in some dependent construct, it is considered appropriate when the primary purpose is to diagnose accurately service shortfalls (Zeithaml et al 1996, pg. 40). The model holds that service customers has two basic types of prepurchase expectations; desired and adequate. These expectations define the boundary of the zone of tolerance. As long as perceived performance falls within the zone, the result is customer satisfaction. Performance below the zone generates

dissatisfaction, while high performance that exceeds the customers desired expectations generates delight, or a customer franchise. What does the Zone of Tolerance model offer business managers? It explains that the firms customers enter discrete transactions with the organization with different expectations. They have a level of service they will accept, and they have a level of service they want. As long as the firms offerings fall within the zone, the customers will be satisfied. However, falling within the zone is only enough to maintain competitive parity. Obviously, falling below the zone puts the firm at a competitive disadvantage. On the other hand, performing above the zone offers the firm the possibility of developing a long-term competitive advantage. It is important that the firm gain an understanding of the service quality dimensions that are most important to its target customers, for it is within these dimensions that the zone is narrowest. It is likely that competitive advantage may not be derived from performance on these dimensions, but the firm must perform within the customers zones of tolerance on these dimensions to be competitive. Yet, the less important dimensions offer an opportunity for the development of sustainable competitive advantage as the zones of tolerance associated with these dimensions tend to be wider.

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