OBJECTIVES OF SERVICE QUALITY

The subject of service quality has aroused considerable recent interest

among
business people and academics. Of course, buyers have always been
concerned
with quality, but the increasing competitive market for many services has led
consumers to become more selective in the services they choose.
Conceptualizing
the quality for services is more complex than for goods. Because of the
absence of
tangible manifestations, measuring service quality can be difficult but there
are
possible research approaches. Comprehensive models of service quality and
there
limitations can be studied. Understanding just what dimensions of quality are
of
importance to customers is not always easy in their evaluation process. It is
not
sufficient for companies to set quality standards in accordance with
misguided
assumptions of customers’ expectations. A further problem in defining
service
quality lies in the importance which customers often attach to the quality if
the
service provider is distinct from its service offers – the two cannot be
separated as
readily as in the case of goods. Finally, issues relating to the setting of
quality
standards and implementation of quality management should be studied.

INTRODUCTION TO SERVICE QUALITY

Quality improvement and adherence to accepted norms of quality are central
to the
modern concept of marketing of services. The quality of service delivery
results in
customer satisfaction and their retention as it reinforces the perception that
the
value of the service received is greater that the price paid for it. Some
important
concepts are:
Modern quality concepts result in better profitability, which is the main goal
of all
the business.
Quality control has much to do with changing the frame of min d and
psychology of
the service provider and particularly the front-end and back-end employees
actually
providing the services. We need to know how this fundamental change in
attitude
can be brought about.

Traditionally, most service providers have felt that they know all there is to
know
about the customers and their requirements. This smug or self-satisfied
approach
needs to be changed.
Development of feedback systems is very essential part of the quality
improvement.
How this can be used to develop better quality standards is an issue of
immense
importance.
Goal setting and adherence to the goals are both essential to ensure
continuous
improvement in the quality standards.

CUSTOMER RETENTION THROUGH QUALITY IMPROVEMENT

The focus of the modern marketers has shifted away from a one-time sale to
making repeated sales to the same customer. Increasing attention is being
paid to
medium and long term perspectives, rather than just the short-term
perspective.
This has been a major revolution in thinking in the field of marketing.
Customer
retention usually pays dividends by way of:
Lifetime value of the customer. If the customer remains loyal to the
company,
naturally, the repeated purchases represent a cumulative value which is
quite substantial compared to any single transaction.
Reduced costs. It costs much more to acquire a new customer than to retain
an old
customer. Therefore, the focus of marketing has shifted away from the goal
of mere
customer acquisition to customer retention in order to substantially reduce
marketing costs.
Benefit from wider opportunities to market more products and services to
customers who are already loyal to you. The key differentiator between
customer
retention is customer satisfaction.
Satisfaction results when the customer feels that the value of a service
received by
him is substantially higher than the price he paid for acquiring the service.
Customer satisfaction can be largely attributed to the quality of the service
or
product. Thus, delivery of high quality service is crucial to the high service
value
perception. When the major marketing goal of a company is customer
retention, the
quality of service delivery is, undeniably, the key differentiator.

LINK BETWEEN SERVICE QUALITY AND PRODUCTIVITY

The approach towards quality has changed quite drastically during the past
few years. Previously people thought in terms of quality control. Quality is
defined as
the ability of the service provider to satisfy customer needs. Customer
perception,
service quality, and profitability are interdependent values. The idea of
control was
that the manufacturer decided to find the reasonable number of defects that
a
customer would accept without demur. The goal of the exercise was to
restrict the
number of defects in order to be called a high-quality producer. This
approach was
based on two assumptions:

Other producers under similar marketing conditions would adhere to similar

norms
of non-compliance or transgression of quality. Thus the issue of competition
driving
up the quality was not taken seriously. Live and let live was the motto that
most
large producers adhere to. The lack of serious quality improvement
translates into
savings in production costs as elaborate effort for improvement was not
done.
Almost every customer assumed that the service or product received by
them will
not be perfect in every respect. Customers took it for granted that luck was
involved
in receiving high-quality goods and services. Thus, people would avoid cars
assembled on Fridays or Mondays. It was assumed that during the pre-
weekend
phase, when the employees where focused on the forth coming weekend,
and the
post-weekend phase , when the employees were physically and mentally
tired from
their weekend exploits, they paid less attention to work. It was thus assumed
that
on Fridays and Mondays, nobody would stop the assembly line for just a bolt
not
fitted at the appropriate place. People preferred cars which were driven from
the
factory to the dealer’s premises rather than carried by trucks to the delivery
points.
Customers believed that inherent defects were bound to be uncovered
during this
pre-delivery phase, and, therefore they would be duly identified and rectified
before
customer delivery.
The total service quality management [TSQM] emphasizes different policies.
Statements such as the following demonstrate the approach:
Quality is free. It is the non-quality that costs money. Non-quality means that
everything is not done right from the beginning.
About 35% of the company’s costs are due to faults and their corrections.

Quality enhancement usually improves profitability by 5 to 10%. This is a

sizable
jump in the overall profitability. To get a similar increase in profitability with
quality
improvement, the company will need to increase the turnover by 20 to 25%,
which
is quite a sizable task.

The costs of the quality improvement are roughly divided into two groups:
cost of
conformance and cost of non-conformance.
Cost of Conformance
This includes costs incurred to adhere or stick to the existing established
standards
or norms. This is the maintenance and improvement of the quality.
• Preventive costs: these include staff training cost and costs of the robust
design or
robustness built into the service.
• Cost of Control: to continuously maintain the high quality, it is necessary to
carry
out surveys and obtain feedback from the customers to ensure that the
delivery is
as per the planned level of service and quality standards.

Cost of non-conformance
The non-conformance to the established standards results in additional cost
of
customer dissatisfaction, complaints and warranty claims. The costs are for
replacement, correction or compensation of the faulty delivery of services or
goods.

DEFINING SERVICE QUALITY

Quality is an extremely difficult concept to define in a few words. At its most
basic,
quality has been defined as conforming to requirements .This implies that
organizations must establish requirements and specifications; once
established, the
quality goal of the various function of an organization is to comply strictly
with
these specifications. Many analyses of service quality have attempted to
distinguish
between objective measures of quality and measures which are based on the
more
subjective perceptions of customers.
A development of this idea by Gronroos identified ‘technical’ and ‘functional’
quality
as being the two principle components of quality. Technical quality refers to
the
relatively quantifiable aspects of a service which consumers receive in their
interactions with a service firm. Because it can easily be measured by both
customer and supplier, it forms an important basis for judging service
quality.
Examples of technical quality include the waiting time at a supermarket
checkoutand the reliability of train services. This, however, is not the only
element that
makes up perceived service quality. Because services involve direct
consumer-
producer interaction, consumers are also influenced by how the technical
quality is
delivered to them. This is what Gronroos describes as functional quality and
cannot
be measured as objectively as the elements of technical quality. In the case
of the
queue at a supermarket checkout, functional quality is influenced by such
factors as
the environment in which queuing takes place and consumers perceptions of
the
manner in which queues are handled by the supermarket’s staff. Gronroos
also sees
an important role for a service firm’s corporate image in defining customers’
perception of quality, with corporate image being based on both technical
and
functional quality.
Service quality is a highly abstract construct, in contrast to goods where
technical
aspects of quality predominate. Many conceptualizations of service quality
therefore
begin by addressing the abstract expectations that consumers hold in
respect of
quality. Consumers subsequently judge service quality as the extent to which
perceived service delivery matches up to these initial expectations. In this
way, a
service which is perceived as being of mediocre standard may be considered
of high
quality when compared against low expectations, but of low quality when
assessed
against high expectations. Analysis of service quality is complicated by the
fact that
production and consumption of a service generally occur simultaneously,
with the
process of service production often being just as important as the service
outcomes.
Gronroos pointed out that a buyer of manufactured goods only encounters
the
traditional marketing mix variables of a manufacturer, i.e. the product, its
price, its
distribution and how these are communicated to him or her. Usually
production
process are unseen by consumers and therefore cannot be used as a basis
for
quality assessment. By contrast, service inseparability results in the
production
process being an important basis for assessing quality.

A further problem in understanding and managing service quality flows from

the
intangibility, variability and inseparability of most services which results in a
series
of unique buyer-seller exchanges with no two services being provided in
exactly the
same way. It has been noted that intangibility and perceived riskiness’
affects
expectations, and in one study of a long-distance phone service, a bookstore
and a pizza shop service, it was concluded that intangibility had some role in service
quality expectations. Managing customers’ expectations can be facilitated by
means of managing the risks a consumer perceives when buying a particular
service.