Lecture 3: Perceived Service Quality and Customer Satisfaction

Question 1

What is Service Quality?

Answer 1

Unlike Customer Satisfaction, it doesn’t need to be experienced.

Question 2

What is Perceived Service Quality (PSQ)?

Answer 2

• Consumer’s judgement (across multiple service encounters) about an entity’s overall excellence or superiority
• Summary assessment of performance relative to a reference standard (a customer’s ideal expectations), rather than simply an offering’s attributes’ performance.
• Expectations are adaptive to consumer learning and change over time

Question 3

What defines expectations?

Answer 3

Expectations determined by accumulated information:

• Stored customer knowledge from own experience
• Other customers’ experiences
• Firm’s strategies (ex: price, advertising, market share, and reputation)
• Media Reports

Question 4

What are the 3 types of expectations?

Answer 4

Will: Performance levels a customer predicts an offering is going to deliver

Ideal: Performance levels reflecting a customer’s ideal preferences across all offerings in a category.

Should: what customer believes an offering OUGHT TO deliver

Question 5

How is satisfaction defined? And what elements involved within satisfaction?

Answer 5

• a consumer’s post-consumption judgement (processes & outcome)
• An affective (emotion) state or feeling whether customers’ needs, desires, and expectations are met or exceeded.
• Satisfaction’s elements:
  - - Cognitive element (thinking and evaluation)
  - -Affective element (emotion and feelings)
• Emotions may include: frustration, anger, disappointment, alienation, disgust, etc.

Question 6

Distinguish between Satisfaction/Dissatisfaction (SD) and Service Quality (SQ)Distinguish between Satisfaction/Dissatisfaction (SD) and Service Quality (SQ)

Answer 6

SD vs SQ

(1) Experience dependent
| Assessable prior to actual experience

(2) Predominantly Cognitive |
Both Cognitive and Affective

(3) Short Term Temporal Focus
(transaction-specific judgment) |
Long Term Temporal Focus
(Overall Assessment)

(4) Ideal expectations used |
Will expectations used

SQ is a determinant (input) of SD.

Question 7

What is the evolution of service quality?

Answer 7

• Disconfirmation of expectations model
• The Nordic model
• The Gaps (PZB) Model and SERVQUAL

Question 8

What and how does “Disconfirmation of Expectations Model” work?

Answer 8

Where:

Confirmation→ perceptions = expectations

Negative
Disconfirmation→ Perceptions < Expectations

Positive DIsconfirmation→ Perceptions > Expectations

Question 9

What and how does “The Nordic Model” work?

Answer 9

Service on the basis of Functional and Technical Quality

Technical: what outcome gotten from the service

Funtional: way the service is delivered

Question 10

10. What and how does “The Gaps or PZB Model” work?

Answer 10

First four gaps are the result of management’s actions. Gap 5 occurs at the client level

Gap 1: The Knowledge Gap

Gap 2: The Standards Gap)

Gap 3: The Delivery Gap

Gap 4: The Communications Gap

Gap 5: The Perceived Service Quality Gap

Question 11

Explain Gap 1: The Knowledge Gap and provide examples.

Answer 11

Client’s expected service Management Perceptions of Client’s expectations
(Difference between client’s expectations and management perceptions of client expectations. Ex: Client’s expectation can be different to what management think customer expects)

Question 12

What are the key contributing factors for Gap 1: Knowledge Gap?

Answer 12

Key contributing factors (Gap 1):

(1) Lack of marketing research orientation
- Insufficient marketing research
- Inadequate use of research findings
- Lack of interaction between management and customers

(2) Inadequate upward communication
(3) Too many levels of management

Question 13

Explain Gap 2: The Standards Gap

Answer 13

Gap 2 ( The Standards Gap):

Difference between management perceptions of client’s expectations and service quality specifications. ( Management may set clear quality specifications, but these may not appear to be achievable by staff)

Question 14

What are

Key contributing factors to Gap 2: The Standards Gap

Answer 14

Key contributing factors (Gap 2):

• Inadequate management commitment to service quality
• Perception of infeasibility
• Inadequate task standardisation
• Absence of goal setting

Question 15

Explain Gap 3: The Delivery Gap

Answer 15

The difference between service quality specifications and the service actually delivered. (Goals and service KPIs exist but ignored or not adhered to)

Question 16

What are key contributing factors to Gap 3: The Delivery Gap?

Answer 16

• Role ambiguity
• Role conflict
• Poor employee job fit
• Poor technology job fit
• Inappropriate supervisory control system
• Lack of perceived control
• Lack of teamwork

Question 17

Explain Gap 4: The Communications Gap and provide an example

Answer 17

External communications to target market Service Delivery
(Difference between service delivery intention and what is communicated about the service to customers.

Ex: Promises given by promotion activities are not consistent with the service delivered)

Question 18

What are Key contributing factors to Gap 4: The Communications Gap?

Answer 18

(1) Inadequate horizontal communication between:
- Advertising and operations
- Salespeople and operations
- HR, marketing and operations
- Differences in policies and procedures across branches and departments

(2) Propensity to over-promise

Question 19

Explain Gap 5:The Perceived Service Quality Gap)

Answer 19

Difference between what customers expect and what they receive (Gaps 1-4=5).
Service experienced is not consistent with service expected.

Question 20

What does Gap 5 it results in?

Answer 20

Poor quality
Negative word-of- mouth
Erosion of corporate image, reputation and trust
Lost business

Question 21

Define SERVQUAL and how it works in relation to gap 5 in PZB model?

Answer 21

• Quantitative Technique to measure perceived and experienced Service Quality (found by PZB).
• Based upon 22 generic item survey which is designed to cover the 5 broad dimensions of Service Quality.
• Subtract expectations scores from performance perception scores, either unweighted or weighted to take into consideration the relative importance of each dimension of quality, or the relative importance of different customer groups.

Measures gap 5 in the gaps model.

How it works: Respondents are asked a 7-point Likert scale (1=strongly disagree, 7=strongly agree) regarding the item about:

• Service Quality expectations in service category
• Perceived Performance
• Relative importance of each dimension of quality

Question 22

What are the 5 dimensions of Service Quality!

Answer 22

Reliability – The ability to perform the promised service dependably and accurately.

Responsiveness – The willingness to help clients and provide prompt service

Assurance – The knowledge and courtesy of employees and their ability to convey trust and confidence

Empathy – The provision of caring, individualised attention to clients

Tangibles – The appearance of physical facilities, equipment, personnel and communications materials

Question 23

What are the Criticisms of SERVQUAL?

Answer 23

Five dimensions may not be applicable to all service contexts

Expectations and perceived performance typically assessed at one time

Measuring expectations provides no additional information beyond what is obtained from measuring perceived performance alone, see SERVPERF.

Does not explicitly include any customer inputs in its measurements .

Question 24

What are the benefits of using customer survey to measure satisfaction and service quality?

Answer 24

It can be used in large customer numbers and relatively cheap