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Chapter 12
Understanding Service Quality
Chapter 12Chapter 12
UNDERSTANDING UNDERSTANDING SERVICE QUALITYSERVICE QUALITY
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.
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Chapter 12
Understanding Service Quality
LEARNING OBJECTIVES
• Identify the differences between the quality of tangible goods and the quality of services.
• Present the different dimensions of quality for goods and for services.
• Introduce the major components of quality theory and the theorists who contributed to it.
• Distinguish between technical quality and functional quality.
• Understand how customer expectations affect their perception of quality.
• Present the role of certification and awards for recognizing outstanding quality.
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Chapter 12
Understanding Service Quality
DIMENSIONS OF PRODUCT QUALITY
• Performance
• Features
• Reliability
• Durability
• Conformance
• Serviceability
• Aesthetics
• Perceived Quality
Source: Garvin,D. “Competing on the eight dimensions of quality,” Harvard Business Review, November December 1987.
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Chapter 12
Understanding Service Quality
MEASURES OF RELIABILITY
• Mean Time to First Failure (MTFF)
• Mean Time Between Failures (MTBF)
• Failure Rate per Unit of Time
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Chapter 12
Understanding Service Quality
DIMENSIONS OF SERVICE QUALITY
Source: Parasuraman A., L.L. Berry and V.A. Zeithaml, (1990), Understanding Measuring and Improving Service Quality: Findings from a Multiphase Research Program, The Free Press.
• Reliability
• Tangibles
• Responsiveness
• Assurance
• Empathy
Service Outcom
e
Service Process
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Chapter 12
Understanding Service Quality
Exhibit 12.1DEMING’S FOURTEEN POINTS
1. Create consistency of purpose for continuous improvement of product and service.
2. Adopt the new philosophy (mistakes and negativism are unacceptable.)
3. Cease dependence upon mass inspection.
4. End the practice of awarding business on price tag alone.
5. Improve constantly and forever the system of production and service.
6. Institute training.
7. Institute leadership.
Source: Walton, M. The Deming Management Method, Putnam Publishing Group, New York, 1986.
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Chapter 12
Understanding Service Quality
Exhibit 12.1 (Continued)DEMING’S FOURTEEN POINTS
8. Drive out fear.
9. Break down barriers between staff areas.
10. Eliminate slogans, exhortations, and targets for the workforce.
11. Eliminate numerical quotas.
12. Remove barriers to pride of workmanship.
13. Institute a vigorous program of education and training.
14. Take action to accomplish the transformation.
Source: Walton, M. The Deming Management Method, Putnam Publishing Group, New York, 1986.
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Chapter 12
Understanding Service Quality
COST OF QUALITY
The cost of poor quality is the difference between the actual operating cost and what the
operating cost would have been if there had been no errors or
failures by either the systems or the staff.
Source: Bland, F.M., Maynard, J., and Herbert, D.W., “Quality Costing of an Administrative Process,” The TQM Magazine, Volume ii, 1999, p. 221-230.
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Chapter 12
Understanding Service Quality
Exhibit 12.2CATEGORIES OF QUALITY COSTS
• Prevention Costs: Costs associated with preventing poor quality expended before a product or service is produced.
• Appraisal Costs: Costs that are incurred for inspection and testing to determine the condition of the product during and after it is produced but before it is released to the customer.
• Internal Failure Costs: Costs of producing defective products or services before they reach the customer.
• External Failure Costs: Costs associated with having defective products or services received by customers.
Source: Juran, J.M. Quality Control Handbook, McGraw-Hill, New York, 1951.
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Chapter 12
Understanding Service Quality
Exhibit 12.3THE COST OF QUALITY FRAMEWORK
High
100
Cost
0
Failure Costs
Total Cost
Prevention and Appraisal Costs
Percent Conforming
Low
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Chapter 12
Understanding Service Quality
MAJOR QUALITY THEORISTS
• Deming
• Feigenbaum
• Juran
• Crosby
• Taguchi
• Ishikawa
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Chapter 12
Understanding Service Quality
Exhibit 12.4QUALITY THEORY: PUTTING IT ALL TOGETHER
Ishikawa
Garvin
Feigenbaum
Deming
Taguchi
Crosby
Juran
COMMITMENT
COST CONTROL
CUSTOMER FOCUS
Empowerment Leadership
Data
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Chapter 12
Understanding Service Quality
DEFINING SERVICE QUALITY
• Technical Quality: related to the core element of service.
• Functional Quality: relates to the customers’ perception of how the
service is delivered.
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Chapter 12
Understanding Service Quality
CUSTOMER SATISFACTION
Satisfaction = (Perception of Performance) – (Expectation)
Customers will be satisfied when their perceptions of performance exceed their
expectations.
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Chapter 12
Understanding Service Quality
1. Improve Customers’ Perceptions of Performance
2. Decrease Customers’ Expectations
TWO WAYS TO INCREASE CUSTOMER SATISFACTION
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Chapter 12
Understanding Service Quality
Exhibit 12.6THE SERVICE QUALITY GAP MODEL
Word-of-Mouth
Personal Needs
Past Experience
Expected Service
Perceived Service
External Communicatio
n to Customers
Service Delivery
Service Quality
Specifications
Management Perceptions of
Customer Expectations
CU
STO
ME
RP
RO
VID
ER
Gap 1
Gap 2
Gap 3
Gap 4
Gap 5
Source: Parasuraman A., L.L. Berry and V.A.. Zeithaml, (1990), Understanding Measuring and Improving Service Quality: Findings from a Multiphase Research Program, The Free Press.
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Chapter 12
Understanding Service Quality
QUALITY CERTIFICATION AND AWARDS
International Organization for Standardization
ISO-9000
Malcolm Baldrige National Quality Award
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Chapter 12
Understanding Service Quality
KEY TERMS
• Functional Quality• Technical Quality• Reliability• Tangibles• Responsiveness• Empathy
