FOCUS ON THE CUSTOMERfreeuniversitybd.weebly.com/uploads/4/7/0/6/47064417/part_2.pdf · CUSTOMER COMPANY Customer Gap GAP 1 GAP 2 Gaps Model of Service Quality GAP 3 External Communications

1

SMSMPart 1

FOCUS ON THE CUSTOMER

2

SM

Perceived

Service

Expected

ServiceCUSTOMER

COMPANY

Customer

Gap

GAP 1

GAP 2

Gaps Model of Service Quality

GAP 3

External Communications

to CustomersGAP 4Service Delivery

Customer-Driven Service Designs and Standards

Company Perceptions of Consumer Expectations

Part 1 Opener

3

SMGaps Model of Service

Quality

• Customer Gap:

• difference between expectations and perceptions

• Provider Gap 1:

• not knowing what customers expect

• Provider Gap 2:

• not having the right service designs and standards

• Provider Gap 3:

• not delivering to service standards

• Provider Gap 4:

• not matching performance to promisesPart 1 Opener

4

SM The Customer Gap

ExpectedService

PerceivedService

GAP

Part 1 Opener

5

SMSMChapter 2

CONSUMER BEHAVIOR

IN SERVICES

6

SMObjectives for Chapter 2:

Consumer Behavior in Services

• Overview the generic differences in consumer behavior

between services and goods

• Introduce the aspects of consumer behavior that a

marketer must understand in five categories of consumer

behavior:

• Information search

• Evaluation of service alternatives

• Service purchase and consumption

• Postpurchase evaluation

• Role of culture

7

SM Consumer Evaluation

Processes for Services

• Search Qualities

– attributes a consumer can determine prior to

purchase of a product

• Experience Qualities

– attributes a consumer can determine after

purchase (or during consumption) of a product

• Credence Qualities

– characteristics that may be impossible to evaluate

even after purchase and consumption

8

SMFigure 2-1

Continuum of Evaluation for Different Types of Products

Difficult to evaluateEasy to evaluate

High in search

qualities

High in experience

qualities

High in credence

qualities

Most

Goods

Most

Services

9

SM

Figure 2-2

Categories in Consumer Decision-Making and Evaluation of

Services

Information

SearchEvaluation of

Alternatives

Purchase and Consumption

Post-Purchase Evaluation

Use of personal sources

Perceived risk Evoked set

Emotion and mood

Service provision as drama

Service roles and scripts

Compatibility of customers

Attribution of dissatisfaction

Innovation diffusion

Brand loyalty

10

SM

Figure 2-3

Categories in Consumer Decision-

Making and Evaluation of Services

Information

SearchEvaluation of

Alternatives

Purchase and Consumption

Post-Purchase Evaluation

Use of personal sources

Perceived risk

Evoked set

Emotion and mood

Service provision as drama

Service roles and scripts

Compatibility of customers

Attribution of dissatisfaction

Innovation diffusion

Brand loyalty

Culture Values and attitudes

Manners and customs

Material culture Aesthetics

Educational and social institutions

11

SM Information search

• In buying services consumers rely more on personal sources. WHY? Refer p32

• Personal influence becomes pivotal as product complexity increases

• Word of mouth important in delivery of services

• With service most evaluation follows purchase

12

SM Perceived Risk

• More risk would appear to be involved with purchase of services (no guarantees)

• Many services so specialised and difficult to evaluate (How do you know whether the plumber has done a good job?)

• Therefore a firm needs to develop strategies to reduce this risk, e.g, training of employees, standardisation of offerings

13

SM Evoked Set

• The evoked set of alternatives likely to be smaller with services than goods

• If you would go to a shopping centre you may only find one dry cleaner or “single brand”

• It is also difficult to obtain adequate prepurchase information about service

• The Internet may widen this potential

• Consumer may choose to do it themselves, e.g. garden services

14

SM Emotion and Mood

• Emotion and mood are feeling states that

influence people’s perception and

evaluation of their experiences

• Moods are transient

• Emotions more intense, stable and

pervasive

• May have a negative or positive influence

15

SMService Provision as

Drama

• Need to maintain a desirable impression

• Service “actors” need to perform certain

routines

• Physical setting important, smell, music,

use of space, temperature, cleanliness, etc.

16

SMGlobal Feature:

Differences in the Service

Experience in the U.S. and Japan

Authenticity

Caring

Control Courtesy

Formality

Friendliness

Personalization

Promptness

Contact: +923006641921 Usman Waheed

17

SMSMChapter 3

CUSTOMER

EXPECTATIONS OF

SERVICES


18

SMObjectives for Chapter 3:Customer Expectations of

Service

• Recognize that customers hold different types of expectations for service performance

• Discuss controllable and uncontrollable sources of customer expectations

• Distinguish between customers’ global expectations of their relationships and their expectations of the service encounter

• Acknowledge that expectations are similar for many different types of customers

• Delineate the most important current issues surrounding customer expectations


19

SM DEFINITIONS

• Customers have different expectations re services – or expected service

• Desired service – customer hopes to receive

• Adequate service – the level of service the customer may accept

• DO YOUR EXPECTATIONS DIFFER RE SPUR and CAPTAIN DOREGO?


20

SMFigure 3-1

Dual Customer Expectation Levels

(Two levels of expectations)

Adequate Service

Desired Service

Zone ofTolerance


21

SMFigure 3-2

The Zone of Tolerance

Adequate Service

Desired Service

Zone ofTolerance


22

SM

Figure 3-3

Zones of Tolerance VARY for

Different Service Dimensions

Most Important Factors Least Important Factors

Level of

Expectation

Source: Berry, Parasuraman, and Zeithaml (1993)

Adequate Service

Desired Service

Zone ofTolerance

DesiredService

AdequateService

Zone

of

Tolerance

Desired Service

Adequate Service


23

SM

Figure 3-4

Zones of Tolerance VARY for

First-Time and Recovery Service

First-Time Service

Outcome

Process

Outcome

Process

Recovery Service

ExpectationsLOW HIGH

Source: Parasuraman, Berry and Zeithaml (1991)


24

SM

Figure 3-5

Factors that Influence

Desired Service

DesiredService

AdequateService

Zone

of

Tolerance

Enduring Service

Intensifiers

Personal Needs


25

SM

• Personal needs include physical, social,

psychological categories

• Enduring service intensifiers are individual, stable

factors that lead to heightened sensitivity to

service

This can further divided into Derived Service

Expectations and Personal service Philosophies


26

SM

Figure 3-6


Adequate Service

DesiredService

AdequateService

Zone

of

ToleranceSelf-Perceived

Service Role

Situational

Factors

Perceived Service

Alternatives

Transitory Service

Intensifiers


27

SM

• Transitory service intensifiers – temporary –

a computer breakdown will be less tolerated

at financial year-ends

• Perceived service alternatives

• Perceived service role of customer

• Situational factors


28

SM

Figure 3-7


Desired and Predicted Service

DesiredService

AdequateService

Zone

of

Tolerance

Predicted

Service

Explicit Service

Promises

Implicit Service

Promises

Word-of-Mouth

Past Experience

29

SMSMChapter 4

CUSTOMER

PERCEPTIONS OF

SERVICE

30

SM

Objectives for Chapter 4:

Customer Perceptions of

Service

• Provide you with definitions and

understanding of customer satisfaction and

service quality

• Show that service encounters or the

“moments of truth” are the building blocks of

customer perceptions

• Highlight strategies for managing customer

perceptions of service

31

SM

Figure 4-1

Customer Perceptions of

Service Quality and

Customer Satisfaction

Service

Quality

Reliability

Responsiveness

Assurance

Empathy

Tangibles

Product

Quality

PricePersonal

Factors

Customer

Satisfaction

Situational

Factors

32

SMFactors Influencing


• Product/service quality

• Product/service attributes or features

• Consumer Emotions

• Attributions for product/service success or

failure

• Equity or fairness evaluations

33

SMOutcomes of


• Increased customer retention

• Positive word-of-mouth communications

• Increased revenues

34

SM

Figure 4-3

Relationship between Customer

Satisfaction and Loyalty in

Competitive Industries

0%

20%

40%

60%

80%

100%

Very

dissatisfied

Dissatisfied Neither

satisfied nor

dissatisfied

Satisfied Very

satisfied

Satisfaction measure

Lo

yalt

y (

rete

nti

on

)

Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.

35

SM Service Quality

• The customer’s judgment of overall

excellence of the service provided in

relation to the quality that was expected.

• Process and outcome quality are both

important.

36

SM The Five Dimensions of

Service Quality

Ability to perform the promised service dependably and accurately.

Knowledge and courtesy of employees and their ability to convey 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.

Tangibles

Reliability

Responsiveness

Assurance

Empathy

37

SM 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:

38

SMSERVQUAL Attributes

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

Keeping customers informed as to when services will be performed

Prompt service to customers

Willingness to help customers

Readiness to respond to customers’ requests

RELIABILITY

RESPONSIVENESS

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

ASSURANCE

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

EMPATHY

Modern equipment

Visually appealing facilities

Employees who have a neat, professional appearance

Visually appealing materials associated with the service

TANGIBLES

39

SM 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

40

SM

Check-In

Request Wake-Up Call

Checkout

Bellboy Takes to Room

Restaurant Meal

Figure 4-4

A Service Encounter

Cascade for a Hotel Visit

41

SM

Sales Call

Ordering Supplies

Billing

Delivery and Installation

Servicing

Figure 4-5

A Service Encounter Cascade for an Industrial

Purchase

42

SMCritical 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

43

SMSample 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)?

44

SM Common Themes in Critical

Service Encounters Research

Recovery: Adaptability:

Spontaneity:Coping:

Employee Responseto Service Delivery

System Failure

Employee Responseto Customer Needs

and Requests

Employee Responseto Problem Customers

Unprompted andUnsolicited EmployeeActions and Attitudes

45

SM Recovery

• 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

DO DON’T

46

SM Adaptability

• Recognize the

seriousness of the need

• Acknowledge

• Anticipate

• Attempt to

accommodate

• Explain rules/policies

• Take responsibility

• Exert effort to

accommodate

• Promise, then fail to

follow through

• Ignore

• Show unwillingness to

try

• Embarrass the customer

• Laugh at the customer

• Avoid responsibility

DO DON’T

47

SM Spontaneity

• Take time

• Be attentive

• Anticipate needs

• Listen

• Provide information

(even if not asked)

• Treat customers fairly

• Show empathy

• Acknowledge by name

• Exhibit impatience

• Ignore

• Yell/laugh/swear

• Steal from or cheat a

customer

• Discriminate

• Treat impersonally

DO DON’T

48

SM Coping

• Listen

• Try to accommodate

• Explain

• Let go of the

customer

• Take customer’s

dissatisfaction

personally

• Let customer’s

dissatisfaction affect

others

DO DON’T

49

SMFigure 4-6

Evidence of Service from the

Customer’s Point of View

People

ProcessPhysical

Evidence

Contact employees

Customer him/herself

Other customers Operational flow of

activities

Steps in process

Flexibility vs.

standard

Technology vs.

human Tangible

communication

Servicescape

Guarantees

Technology


50

SM

Figure 17-9

Sample Measurements for the

Balanced Scorecard

Adapted from Kaplan and Norton

Innovation andLearning Perspective

CustomerPerspective

Service Perceptions

Service Expectations

Perceived Value

Behavioral Intentions:

OperationalPerspective:

Right first time (% hits)

Right on time (% hits)

Responsiveness (% on

time)

Transaction time (hours,

days)

Throughput time

Reduction in waste

Process quality

Financial Measures

Price Premium

Volume Increases

Value of Customer

Referrals

Value of Cross Sales

Long-term Value of

Customer

% Loyalty% Intent to Switch# Customer

Referrals# Cross Sales# of Defections

Number of new products

Return on innovation

Employee skills

Time to market

Time spent talking to

customers


51

SM

Figure 17-10

Service Quality Spells Profits

ServiceQuality

CustomerRetention

Costs

PricePremium

Word ofMouth

Margins

Profits

Defensive Marketing

Volume ofPurchases

MarketShare

Reputation

Sales

PricePremium

Offensive Marketing


52

SM

Documents

FOCUS ON THE CUSTOMERfreeuniversitybd.weebly.com/uploads/4/7/0/6/47064417/part_2.pdf · CUSTOMER COMPANY Customer Gap GAP 1 GAP 2 Gaps Model of Service Quality GAP 3 External Communications