quiz
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MGT345_545Class3.ppt
Class 3
The Origins of Service Quality
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Quality - origins
- A desire for quality has long been recognized as essential to all business
- A focus on quality began in manufacturing and evolved to consider services
- Challenge: Quality is difficult to define, but the various definitions revolve around the expectations and perception of customers
- Hawthorne Works Experiments (1924-1932)
- Study impact of lighting on productivity
- Results were contrary to expectations
- Role of Management
First time there was an awareness that external factors other than money and working conditions could influence quality.
Quality defined – the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs (American Society for Quality)
Economic Impact of Quality
- Conventional theory recognizes two generic strategies for developing competitive advantage:
- Product Differentiation & Overall Cost Leadership
- Quality control is a crucial element of Product Differentiation
- If customers see a clear quality advantage, they usually favor a product, without trying to consider other factors
Market Share and Profitability
- Quality became, and still is, one of the most common means by which firms sustain their positions amongst competing firms
- Improvements in quality have been shown to increase market share, and thus increase profitability
THE EVOLUTION OF QUALITY
Product Quality Assurance (QA)
- Implemented by Bell Labs (early 1940s) and incorporated a strong focus on employee groups to:
- Determine Quality Standards
- Establish Proper Production Procedures
- Measure Conformance to Standards
- Establish Procedures for Handling Defects
W. Edwards Deming - statistician
- Father of the Japanese Quality Revolution
- Developed Deming’s Chain Reaction
Joseph M. Juran
- Focused on the idea that achieving quality was all about communication, management, and people (not just statistics)
- Believed that 80% of quality problems were caused by 20% of activities – Pareto Principle
- One of the first to acknowledge the “costs” of poor quality.
- Three Keys: Annual Improvement Plans, Massive Training Programs, and Leadership
Phillip Crosby
- Lead the Shift in Focus to Western Management
- Argued Effective Quality Management Required:
- An easily understood definition of quality
- A system by which to manage quality
- A performance standard that leaves no room for doubt of fudging by an employee
- A method of measurement that focuses attention on the progress of quality improvement
- A management philosophy that has been influenced by numerous academics and practitioners over many decades
- Encompasses the entire organization, from supplier to customer
- TQM stresses a commitment by management to have a continuing, companywide drive toward excellence in all aspects of products and services that are important to the customer.
Total Quality Management (TQM)
A holistic view of Quality Management
TQM (cont.): Recurring Themes
TQM is:
- Customer-centered and customer-driven
- Has a conscious philosophy of systematic improvement
- Requires empowered employees involved in collaborative action
- Requires committed management showing inspiring leadership
TQM (cont.)
Customer Driven
Focus on Quality
Continuous Improvement
Collaboration
Objectivity
Teamwork
Empowerment
Education and Training
Shared Vision
Leadership
QUALITY IN SERVICES & COSUMER BEHAVIOR
Times change…
- Quality in services did not start gaining serious momentum till the 1980’s
- The realization came up that goods and services ARE DIFFERENT!
- Just like manufacturing, quality focused on “quality checking” the final end product
- Quality of goods can be measured objectively, but how do you measure the quality of something intangible?
Back to the Drawing Board
- Shift to an emphasis on consumer behavior to dictate how to develop service quality practices
- At the end of the day, the consumer determines quality, not the designers or operations managers
What Is Consumer Behavior?
Consumer behavior involves the psychological processes that consumers go through in recognizing needs, finding ways to solve these needs, making purchase decisions: whether or not to purchase a product and, if so, which brand and where, interpret information, make plans, and implement these plans by engaging in comparison shopping or actually purchasing a product.
Stages in Consumer Decision Making and Evaluation of Services
Zeithhaml, Bitner, and Gremler (2009)
Need Recognition - Maslow
- Physiological – Food, Water, and Sleep
- Safety/Security – Shelter, Protection, and Security
- Social – Affection, Friendship, and Acceptance
- Esteem – Prestige, Success, Accomplishment
- Self-Actualization – Self-Fulfillment and an Enriching Experience
Information Search
- Personal and Non-Personal Sources
- Perceived Risk
- Traditionally, more risk is present in the purchase of a service when compared to goods
- Companies can begin to mitigate this risk to make the customer feel more comfortable
Evaluation of Service Alternatives
- Differences in the retailing of goods and services:
- Goods: Retail shops traditionally display competing goods in close proximity
- Services: Consumers visit an establishment usually offers a single brand (bank, dry cleaner, etc.)
- Consumers have a tendency to choose the first acceptable service alternative
Service Purchase
- Consumers make the decision to purchase a service or do it themselves
- Much is still unknown about a service at the time of purchase
- When did you purchase your vacation?
- Many service providers offer “free” or “discounted” initial trials
Consumer Experience
- Many things can impact the experience itself:
- Physical Setting
- Roles of Individuals
- Compatibility
- Customer Coproduction
- Emotions and Mood
Post Experience Evaluation
- Word-of-Mouth
- When dissatisfied, consumers blame the provider and/or themselves
- Positive and negative biases can impact an evaluation
- Brand Loyalty – Two Sides:
- Good to Have, Difficult to Capture
Let’s evaluate this billborad
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Things to Remember…..
- One major driver of consumer behavior includes generational differences and their respective life experiences
- Consumer purchase decision making is a process that has numerous steps
- A purchase decision can be influenced at any of these stages
SERVICE QUALITY CONCEPTS
Accessing Quality in Service
- Confirmation/Disconfirmation Paradigm
- Comparing prior expectations of service performance with actual performance of the service.
- Confirmation = match
- Disconfirmation = don’t match
- Positive (exceeds) or Negative (does not exceed)
- Numerous models exist, but it should be cautioned, there is no one best model!
Sasser, Olsen, Wyckoff (1978)
SERVICE QUALITY
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Grönroos (1982)
- Two dimensions lead to service quality:
- Technical (what is delivered): Food, Room, Etc.
- Functional (how is it delivered): Behavior, Accessibility
Lehtinen (1983)
- Two dimensions lead to service quality:
- Process Quality (during service):
- Output Quality (post service)
The Gaps Model of Service
Quality – Parasurman, Zeithhaml, Berry (1985)
- The Customer Gap
- The Provider Gaps:
- Gap 1 – The Listening Gap
- Not knowing what customers expect
- Gap 2 – The Design and Standards Gap
- Not having the right service designs and standards
- Gap 3 – The Performance Gap
- Not delivering to service standards
- Gap 4 – The Communication Gap
- Not matching performance to promises
The Customer Gap
Zeithhaml, Bitner, and Gremler (2009)
Company Perceptions of Consumer Expectations
Expected Service
CUSTOMER
COMPANY
Gap 1:
The Listening Gap
Provider Gap 1
Zeithhaml, Bitner, and Gremler (2009)
Key Factors Leading to Provider Gap 1
Zeithhaml, Bitner, and Gremler (2009)
CUSTOMER
COMPANY
Gap 2: The Design and Standards Gap
Customer-Driven
Service Designs and Standards
Company Perceptions of Consumer Expectations
Provider Gap 2
Zeithhaml, Bitner, and Gremler (2009)
Key Factors Leading to Provider Gap 2
Zeithhaml, Bitner, and Gremler (2009)
CUSTOMER
COMPANY
Service Delivery
Gap 3: The Performance Gap
Customer-Driven
Service Designs and Standards
Provider Gap 3
Zeithhaml, Bitner, and Gremler (2009)
Key Factors Leading to Provider Gap 3
Zeithhaml, Bitner, and Gremler (2009)
CUSTOMER
COMPANY
External Communications to Customers
Gap 4: The Communication Gap
Provider Gap 4
Service Delivery
Zeithhaml, Bitner, and Gremler (2009)
Key Factors Leading to Provider Gap 4
Zeithhaml, Bitner, and Gremler (2009)
Gaps Model of Service Quality
Zeithhaml, Bitner, and Gremler (2009)
Gap Analysis
Overall Strategic Assessment
- How are we doing overall in meeting or exceeding customer expectations?
- How are we doing overall in closing the four company gaps?
- Which gaps represent our strengths and where are our weaknesses?
Gap Analysis
Specific Service Implementation
- Who is the customer? What is the service?
- Are we consistently meeting/exceeding customer expectations with this service?
- If not, where are the gaps and what changes are needed?
Gap Analysis Examples
How do the following companies address Gap Analysis?
- Zingerman’s
- Nick’s Pizza & Pub
- BerylHealth
SERVQUAL - Parasurman, Zeithhaml, Berry (1998)
Established 5 key factors that customers consider
- Reliability: Service providers ability to perform service dependability and accurately
- Responsiveness: Willingness to help customers and provide prompt service
- Empathy: Caring personal attention
- Assurances: Knowledge and courtesy of employees and their ability to inspire trust and confidence
- Tangibles: Physical facilities, equipment, etc.
Questions
Break
