Transcendent:

Quality = Excellence. Recognized only through experience

Product-based: Quality is precise and measurable

User-based:

Quality lies in the eyes of the beholder

Manufacturing- Quality is in conformance to the firms developed based: specifications

Value-based:

Quality is a trade-off between price and value

Approaches to Service quality

Transcendent approach Quality in this sense is innate excellence. It reflects the best thing there is. Manufacturing based approach It relates to conformance with design or specification. Quality service would be one which is free of errors.

Approaches to Service quality

User based approach If a service meets the requirement of the user, then it is quality service. Fitness of purpose is the common phrase used in this context Product based approach - considers measurable characteristics. In most cases more equates with better Value based approach based on how customer sees value

Benefits of Service quality

1. 2.

Good service quality customer delight retaining existing customers and attracting new ones The positive relationship between perceived service quality and profitability have been documented empirically by Buzzell and Gale. Quality edge boosts performance in 2 ways Short run Superior quality fetches premium price Long run Business grows, gains in market share PZB found a positive relation between perceived quality of service obtained and willingness to recommend to friends

Rust, Zahorik and Keiningham Model relationship between service quality and profit

Improvement effort

Service quality improvement

Perceived service quality and Customer satisfaction Word of mouth Customer Retention Cost reduction

Attracting new customers

Revenues and market share

Profitability

Commitment to Service quality

Biggest responsibility with the management of the organization Resource allocation personnel as well as material Quality Control Benchmarking

Making service quality financially accountable

Business on the top quintile of relative service quality on an average realize an 8% higher price than the competition The Hospital corporation of America found a strong link between perceived quality of patient care and profitability across its many hospitals Ford Motor company has demonstrated that dealers with higher service scores have higher than normal profit, return on investment and profit per new vehicle sold

CEOs views on benefits of service quality

HDFC The nature and quality of our service will determine our reputation in the market Vysya Bank The main objective of TQM drive is to achieve maximum possible customer satisfaction and employee satisfaction because only a happy staff member will go out of his way to offer satisfying services to the customer and improve the bottom line

The Five Dimensions of Service Quality

Reliability
Assurance
Ability to perform the promised service dependably and accurately. Ex - flights depart/arrive on schedule Knowledge, competence, credibility and courtesy of employees and their ability to inspire trust and confidence. Ex Knowledgeable Mechanic at the service centre Physical facilities, equipment, and appearance of personnel. Ex seating and air-conditioning at the theatre Interpersonal communication, Caring, individualized attention the firm provides its customers. Ex Acknowledging the customer by name Willingness to help customers and provide prompt service. Ex no waiting at the hospital

Tangibles
Empathy Responsiveness

Measuring Service quality

Most widely used measure for service quality has been SERVQUAL devised by Parsuraman, Zeithaml and Berry Customer expectation of service quality results from a comparison of service expectations and perceived performance SERVQUAL was first published in 1988 The 5 service quality dimensions of reliability, responsiveness, assurance, empathy and tangibles are the basic attributes measured by the SERVQUAL SERVQUAL scores are expressed as the difference between expectations and performance Respondents complete a series of questions which measure their expectations on 5 service quality dimensions and subsequently record their perception on performance on the same dimensions

SERVQUAL

The original SERVQUAL consisted of 22 statements 4 on tangibles, 5 on reliability, 4 on responsiveness, 4 on assurance, 5 on empathy Equipments, physical facilities, appearance of employees, materials like pamphlets tangibles Meeting promises, performing the service right the first time reliability Prompt service, employees never too busy to respond to customer requests responsiveness Feeling of safety in transaction, employees having the knowledge to answer questions assurance Individual attention to customers empathy

SERVQUAL example
Expectation statements (E) 1. The physical facilities at Banks should be visually appealing 1 2 3 4 5 6 7 2. Banks should give customers individual attention

1 2 3 4 5 6 7 Corresponding perception statements (P) 1. The physical facilities a XYZ bank are visually appealing 1 2 3 4 5 6 7 2. XYZ bank gives its customers individual attention 1 2 3 4 5 6 7

SERVQUAL
To determine companys service quality along 5 service quality dimensions To find out relative importance of the service quality dimensions as considered by the customer To track customers expectations and perceptions over time To compare the companys SERVQUAL scores against that of the competitors

SERVPERF
Researchers felt it was unnecessary to have expectation and Performance statements. Hence they came out with the Performance statements only which is called the SERVPERF The statements are positively worded and those who agree with it fully give a 7 point and those who agree least give 1 point

Examples of SERVPERF Statements

Reliability
1. 2. 3. 4.

The TV was repaired right the first time. 1 2 3 4 5 6 7 The Airline is on time as per schedule. 1 2 3 4 5 6 7 The mobile bill is free of errors. 1 2 3 4 5 6 7 The lawyer calls back as he promised. 1 2 3 4 5 6 7

Assurance
1. 2. 3.

The Travel agent is able to give all the details regarding the destination. 1 2 3 4 5 6 7 The professor is Knowledgeable in the subject. 1 2 3 4 5 6 7 The bank teller processes the transaction with out fumbling around. 1 2 3 4 5 6 7

Tangibility
1. 2.

3.
4. 5.

The Hotels lobby and facilities are attractive 1 2 3 4 5 6 7 The bank statement is easy to understand 1 2 3 4 5 6 7 The classroom is well ventilated and equipped with projector and other aides. 1 2 3 4 5 6 7 The airline staff are well groomed. 1 2 3 4 5 6 7 The seats in the theatre are comfortable. 1 2 3 4 5 6 7

Empathy
1. 2. 3.

The flight attendant has a pleasant demeanor 1 2 3 4 5 6 7 The reservation assistant at the theatre is consistently polite 1 2 3 4 5 6 7 The telephone operator is courteous. 1 2 3 4 5 6 7

Responsiveness
1. 2. 3.

When there is a problem the firm finds solution for it quickly 1 2 3 4 5 6 7 The cable TV operator gives a correct time when the installer will show up 1 2 3 4 5 6 7 The doctor is always available on phone in case of emergencies 1 2 3 4 5 6 7

Other Soft Methods used by service organizations to assess quality

Transaction surveys: also called as trailer calls or post transaction surveys. Usually done with a small questionnaire immediately after the service transaction. Ex- A survey of airline passengers while disembarking Complaint solicitation and analysis: Customers tend to voice their dissatisfaction through complaints. An analysis of the complaints can help in identifying quality failure points Mystery shopping: In this method research companies are used by the service organization who send people posing as customers in order to judge service quality

The mystery shopper is unknown to the service provider. Mystery shopping also termed as ghost shopping can be useful in reinforcing service quality Intermediary research This form of research is useful in services where intermediaries can provide valuable feedback to the firm regarding the quality of service

Hard and Soft Measures of Service Quality

Hard measures refer to standards and measures that can be counted, timed or measured through audits
typically operational processes or outcomes e.g. how many trains arrived late?

Soft measures refer to standards and measures that cannot easily be observed and must be collected by talking to customers, employees or others
e.g. SERVQUAL, surveys, and customer advisory

panels.

Hard Measures of Service Quality

Control charts to monitor a single variable Service quality indexes Root cause analysis (fishbone charts) Pareto analysis Blueprints

Control charts are useful for displaying performance over time against specific quality standards. Example: Percentage of Flights Leaving within 15 Minutes of Schedule time
100% 90% 80% 70% 60%
J F M A M J J A S O N D

Month

Composition e of FedExs Service Quality Index (SQI)

Failure Type
Weighting Factor X No of = Incidents Daily Points

Late Delivery Right Day 1 Late Delivery Wrong Day 5 Tracing request unanswered 1 Missing proofs of delivery 1 Invoice adjustments 1 Missed pickups 10 Lost packages 10 Damaged packages 10 Aircraft Delays (minutes) 5 Overcharged (packages missing label) 5 Abandoned calls 1

Total Failure Points (SQI) =

XXX,XXX

Fishbone diagrams: A cause-and-effect diagram to identify potential causes of problems.

Facilities, Equipment
Arrive late Oversized bags

Front stage Personnel

Procedure
Delayed check-in procedure Boarding pass problems

Customers

Gate agents Aircraft late to cannot process fast gate Acceptance of late passengers enough Mechanical Cut of too close to departure Failures time Late/unavailable Late pushback Poor gate locations airline crew

Delayed Departures Other Causes

Weather Air traffic Late food service Late baggage Late fuel Late cabin cleaners Poor announcement of departures Weight and balance sheet late

Materials, Supplies

Backstage Personnel

Information

Analysis of Causes of Flight Departure Delays

15.3% 15.4% 23.1% 23.1%

23.1%

All stations, excluding Chicago-Midway Hub

11.7% 8.7%

4.9 % 19% 9.5% 33.3% 33.3%

11.3%
15%

53.3%
Washington Natl.

Newark

Late passengers Waiting for pushback Waiting for fueling

Late weight and balance sheet Late cabin cleaning / supplies Other

Pareto charts: Separating the trivial from the important.

Pareto Analysis is a statistical technique in decision making that is used for the selection of a limited number of tasks that produce significant overall effect. It uses the Pareto Principle (also know as the 80/20 rule). In terms of quality improvement, a large majority of problems (80% of the variable) are produced by a few key causes (20%). This is also known as the vital few and the trivial many.

Blueprinting: A visualization of service delivery. It allows one to identify fail points in both the front stage and backstage.