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Service Marketing gap analysis
Free essay example:
The unique requirements of the additional 3P’s—people, physical evidence, and process are driven by the particular characteristics of service—intangibility, inseparability, variability, and perish ability. These characteristics also pose more marketing complexities which require different management activities.
All services are experiences—some are long in duration and some are short; some are complex and others are simple; some are mundane, whereas others are exciting and unique. (Wilson, Zeithaml, and Bitner, 2008) The delivery process of the service has been entitled the Servuction System by Langeard and Eiglier. They argued that a bundle of benefits are delivered through both visible and invisible parts which create an experience for the consumer. The experience can be affected by the visible inanimate environment of the organization which is part of the physical evidence, the invisible process for delivering the service, and the people involved in, both the contact personnel from inside the organization and other customers from outside the organization. Each part interacts and may influence the level of customer satisfaction. For example, a clean theater with comfortable seats and a spacious, well-lit parking lot may make the journey of going for a movie more enjoyable though the customer doesn't take any of that back home. Still, the environment of retail stores can influence people’s willingness to stay and the background music can influence traffic flow and the degree consumers willing to spend. Moreover, a physically comfortable setting can accelerate an employee’s better performance and improve his or her emotional state. Undoubtedly, a friendly, knowledgeable, and helpful hotel staff can greatly affect one’s impression of the hotel. The interactive impact also exists in the service process. The process involves in all the activities when the service is produced and delivered. For example, the receptionist of a hotel taking the information to check the customer in and then the bell-boy taking the luggage to the room, these activities are seen directly by the customer as front stage activities. Other backstage activities that are unseen by the customer include a kitchen staff preparing meals and laundry staff washing the sheets. (McColl-Kennedy, 2002) A hotel stay experience is determined by the brief encounters with the front-desk staff, bellhops, housekeeping staff, restaurant wait staff and so on. (Rust, Zahorik and Keiningham, 1996) These people who play an interactive part in the production and delivery of the service may be management, service providers, support personnel or even other customers. As other customers can directly affect how the service is delivered, as well as the overall satisfaction level, it is important for management to train customers in terms of what is expected of them in a service establishment and, if necessary, remove customers who behave in an offensive way. In five-star resorts and upmarket restaurants, for example, management, staff and other customers have expectations about how staff and customers should behave-even what they should wear. Sometimes signs are provided in the establishment, detailing the dress code. For example, it is common to see signs saying “shirts must be worn in the restaurant” and “No thongs”. (McColl-Kennedy, 2002)Ill-mannered restaurant customers at the next table, crying children in a nearby seat on an airplane, and commercial bank customers whose lengthy transactions take up the tellers’ time are all examples of unpleasant service experience caused by other customers. (Rust, Zahorik and Keiningham, 1996) Therefore, a failure at any one point mentioned above may result in greater risk for dissatisfaction at each ensuing level.
It has been agreed that the success of service marketing depends more on the management of service quality through the monitoring of customer satisfaction. Providing services that consistently meet or exceed customers’ expectations is the key to overcoming most of the major problems unique to service. (Rust, Zahorik and Keiningham, 1996) Customer satisfaction is the customer’s evaluation of a product or service in terms of whether that product or service has met the customer’s needs and expectations. Customer expectations are standards or reference points that customers bring to the service experience whereas customer perceptions are subjective assessments of actual service experience. The difference between customer expectations and perceptions is referred as the customer gap which is the central focus of the gaps model. The customer gap identifies service performance problems but does not determine the causes of the problems; it is the four provider gaps that help management identify where service quality has failed. Service firms need to close the gap between customer expectations and perceptions of the actual service received if they want to satisfy their customers with quality service and build long term relationships. (Wilson, Zeithaml, and Bitner, 2008)
A recurring theme in service companies is the difficulty experienced in translating customer expectations into service quality specifications that employees can understand and execute. The difficulty can be interpreted as three difficulties: the difficulty for managers who are not in direct contact with customers in large organization to understand the customer needs; the difficulty in getting the right balance between imposing service standards and still allowing the staff to be natural; the difficulty managers faces in selecting and training all of the customer-contact employees to do their jobs well and motivating them to care about doing their jobs and to make an extra effort to deliver the service expected.
The gaps model serves as a useful diagnostic tool for evaluating why service quality is failing, and the four provider gaps are aimed at management, reflecting potential service failure as a result of management’s actions. The first three gaps fit here and provide a framework for management to understand the causes of this service difficulty and the discussion of factors identified by studies might facilitate the closing of the gaps and help solve the difficulty.
The gap between what consumers expect and what managers think they expect may be considerably larger in service firms than in firms which produce tangible goods due to the lack of clear definition and tangible cues for service. So it is necessary for service firm executives to follow marketing research orientation, conduct upward communication system and place less layers of management to receive more accurate information about consumer’s needs and deliver higher quality service which is also viewed by consumers as having included all the features connoting high quality to them.
Marketing research orientation
It has been unveiled in studies (George and Barksdale 1974; Lovelock 1981; Parasuraman, Berry, and Zeithaml 1983) that operations function is believed to be more critical by many service organizations, which resulted in the less emphasis put by service organizations on marketing and marketing research than goods firms. The gap between consumer expectations and management perceptions of consumer expectations depends largely on the extent to which a company recognizes the importance of the consumer.
Firms that take operations orientation divert their focus from consumers and make less effort to understand the needs and expectations of customers. For example, banks that close their branch lobbies in mid-afternoon to facilitate balancing the day’s transactions and that issue ninthly customer statements designed whiteout input from customers exemplify an operations orientation.( Zeithaml, Berry, and Parasuraman,1988) Marketing research is a key approach for the service firms to understand consumer expectations and perceptions of their service. So marketing research orientation is a useful solution for facilitating managers to understand what customers want from the company.
In Schneider and Bowen’s research in 1985, it was suggested that customer-contact personnel could accurately predict customer expectations and perceptions of the service. Therefore, top managers who may not have a firm grasp of consumer quality expectations depends largely on the information received from the customers and provided by customer-contact personnel.
In service organizations, the types of messages that need to be conveyed are often complex and ambiguous (e.g., problems encountered in service delivery, how employees feel, morale and attitudes within the organization) and top managers often differ considerably in background from contact personnel. (Zeithaml, Berry, and Parasuraman, 1988) In the case of Burger King, the manager who had been shifted from the top position to the front-line for one week got the chance to communicate with the customers from the perspective of a customer-contact employee and found customer’s basic need as warming milk for the baby and other basic needs for the employees through daily communication with them, such as the basic need of help from team leader as a beginner teller.
Levels of management
The size of the gap 1 can also be affected by the number of layers of management between top managers and customer-contact personnel. The communication and understanding of customer needs are easily inhibited by the layers which place barriers between senders and receivers of messages.
Even if consumer needs are known by the executives of a service firm, appropriate specifications may not always be set. Gap 2 refers to the discrepancy between managers’ perceptions of consumer expectations and the actual specifications established by management for a service. (Zeithaml, Berry, and Parasuraman, 1988) Several obstacles are related to the inability to set proper service specifications and high enough standards to meet the customer’s quality expectations, such as management’s emphasis on short-term profitability and cost-reduction techniques.( Tinkham and Kleiner,1993) The approaches suggested to close this gap are setting a user-based approach on management commitment to service quality, setting formal goals and standardizing tasks
Management commitment to service quality
The tendency to emphasize other objectives, such as cost reduction and short-term profit, rather than service quality was illustrated by Hax and Majluf in 1984 in the following statement.
Most U.S. firms suffer significantly from the use of short-term, accounting-driven measures of performance to establish the reward mechanisms for high level managers, who are mainly responsible for implementing strategic actions (Hax and Majluf 1984, p.90)
A user-based approach to quality results in an emphasis on serving the customer. American Express is a good example to illustrate the user-based approach to quality. They dedicate to quality which overrides all other values of the firm. American Express is a market-driven institution, committed to the customers in everything they do. It has been concluded by Zeithaml, Berry, and Parasuraman that the proportions of resources committed to service quality, the existence of an internal quality program, and the extent to which managers believe their attempts to improve service quality will be recognized and rewarded in the organization are the three specific variables related to management commitment to service quality.
It is necessary that managers set goals since formal goals not only improve organizational performance and individual achievement, but increase overall control of the organization. Formal goals for service quality are established in most of companies that have been successful in delivering high quality of service, such as American Express, McDonald’s.
American Express found that timeliness, accuracy, and responsiveness were the important outputs to be achieved by analyzing customer complaints. 180 formal goals were then identified by managers for different aspects of service quality. Monitoring devices were then set up to evaluate the speed with which telephones were answered, complaints were handled, bills were mailed, and new applications were approved. The effective formal goals set by American Express enable service providers to understand what management wants to deliver. McDonald’s is noted for committing all its fast food franchises to providing their customers with fast service, consistent product and low price. The size of gap 2 is expected to be reduced if there is a formal quality program including identification and measurement of service quality standards existing in the service firm.
The degree to which tasks to be performed can be standardized or reutilized decides the effectiveness of translating managerial perceptions into specific service quality standards.
For example, task standardization may help deliver superior customer service in the health field. Provena Covenant Medical Center is a 280-bed healthcare facility which has established hospital wide customer service standards to translate the managerial perceptions and help employees see the specific service quality standard they can follow. Based on the overall customer service goals set by the hospital as to improving the satisfaction ratings of customers, each individual department has established its own goals. For instance, employees in the laboratory have standards for filling various requests for tests within a specified period of time at a specified level of accuracy. And the maintenance staff has to respond to all repair requests within a specific time period. (Friedman Diane, 2000)
The third gap is the discrepancy between the specifications and standards set by management for the service and the actual performance and delivery of the service by employees. It is also referred as “service performance gap” which exists because the service providers do not perform as expected by management, either unable or unwilling to conduct the service at the desired level. Employee-job fit, perceived control of customer-contact personnel, role conflict and role ambiguity are the main theoretical constructs that are proposed to account for the size of gap 3.
Service Quality problems are more likely to occur if the customer-contact personnel are not well suited to their positions because the performances of these employees are directly related to the customers’ satisfaction. However, the critical customer-contact employees such as front-line service providers tend to be positioned in the lowest level of organization chart with the least well pay and the least education. For example, employees such as telephone operators, car rental agents, and repair technicians may lack language efficiency, interpersonal skills, or other skills to serve customers in an effective way expected. Also, the high turnover among the front-line employees exists in many service companies, which challenges the delivery of constantly outstanding customer service.
The relatively solutions to minimize this gap for service managers is to pay enough attentions on matching the employee to the job through effective selection processes and sufficient resources allocation.
Perceived control is viewed as the degree to which the customer-contact employee is restricted by the organizational rules, culture and procedures. The more flexibility and control the employee perceives in the stressful situation in providing services, the more confident he or she will be and the better the performance will be conducted as a consequence.
Empowerment is thought to be necessary to provide the contact employee with the flexibility. Empowerment refers to a situation in which the manager gives employees the discretion to make day-to-day decisions about job-related activities (Hartline and Ferrell, 1996) Employees are able to decide the best way of performing a task given by the manager if they gain more discretion over how their jobs are performed. The increased flexibility accompanying empowerment, which help customer-contact employees to satisfy customers by making on-the-spot decisions, may result in employees being more effective and adaptive. Thus, more enthusiastic service with quicker response to customer needs is likely to be conducted by the employees who feel better about their jobs. Some studies in this area also support this positive effect of empowerment. For example, Bateson (1985) found that the more control the customer-contact employees have over the service encounter, the more ability they will have to satisfy customers. Similarly, Bitner(1990) and Bitner, Booms, and Tetreault(1990) concluded that customers are more likely to be satisfied with the contact employees who are full of ability, competence , willingness to solve their problems.
However, improper empowerment may lead to negative results such as employees may “give away the store”or abuse the empowerment and make bad decisions. For these drawbacks, managers should use empowerment cautiously under appropriate conditions. Previous research suggests that empowerment works best when the firm’s culture supports its use by guiding and limiting employee actions. (Hartline and Ferrell, 1996) Training on how to use the decision-making authority wisely can also help to ensure that the empowered employee decisions are in the best interests of the management.
Employees experience role conflict when the expectations of the top managers, immediate supervisors or customers are too demanding. Contact employees have to satisfy the needs of both the company and the customer as a linkage between the two parts. Sometimes the expectations of the company and the consumer are conflict. Take an income tax firm as an example. Conflict exists where different expectations are demanded by the management and the customer. Staff members are expected to process as many consumers as possible in a limited short time by the company, while they are requested personal attention by the consumers who want to discuss their tax avoidance strategies with the service provider.
Studies find that role conflict is an unavoidable aspect in the jobs of customer-contact employees (Shamir, 1980). The new accounts personnel in banks who are asked to complete forms for each service they sell may always experience the role conflict when there are other customers waiting to be served. They will be faced with the struggle of taking time to cross-sell bank services to the customer at the desk or simply moving on to the waiting customers. The cross-selling achievement which measures their performance makes this conflict more complicated.
A service organization needs to put efforts in coping with the role conflict of service employees as to reduce the size of gap 3. Performance measurement system is one tool used to reduce the role conflict in the way of focusing on the service quality perceived by the customers in addition to the efficiency measurement.
Role ambiguity occurs when the necessary information for effectively enact the role of the employee is nonsalient. Employees may experience role ambiguity when they are uncertain about what they are expected by the managers or supervisors, the way to satisfy the expectations, and the measurement of their performance under which they are evaluated and rewarded.
The training provided by the organization can help employees gain an accurate understanding of what is expected and how they will be evaluated. Training that relates to specific services offered by the firm should help the contact person in dealing with the customer. Training in communication skills, especially in listening to customers and understanding what customers expect, also should give contact personnel greater role clarity. (Zeithaml, Berry, and Parasuraman, 1988)
To summarize, managers and supervisors are responsible for establishing the organization’s common value about constant quality service with the additional 3P’s and the unique characteristics of service bearing in mind. A fully understanding of the first three gaps in the service quality model and successful avoiding the factors related to the size of the gaps may facilitate the difficulty involves in the communication and control processes in understanding consumers’ needs, and managing and enabling employees to deliver expected service.
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