Professional Documents
Culture Documents
SUBMITTED TO:
ARPNA KATIYAR
SUBMITTED BY:
MBA(F&C)-3rd SEM. VIKAS GAUR SACHIN VERMA ARCHANA VERMA AKHIL KAUSHAL SAURABH PANDEY
INTRODUCTION TO SERVICE QUALITYQuality 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 than 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 mind 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.
Lifetime value of the customer if the customer remains loyal to the company, naturally, the repeated purchases represents 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.
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.
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 risk ness 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.
A. Reliability :
This dimension is shown to have the highest influence on the customer perception of quality. It is the ability to perform the promised service dependably and accurately. Sahara Airlines, an upcoming domestic air carrier within India, has been striving to protect itself as a reliable airline. It hopes to differentiate itself from other airlines Indian Airlines. To p[protect this reliability, Sahara Airways has a scheme of full refund plus a coupon of Rs3,000 to every passenger on delay of flights by more than 59 minutes. When service delivery fails the first time, a service provider may get a second chance to provide the same service in the phase called Recovery. The expectations of the customer are usually higher during the recovery phase than before because of the initial failure. Thus, the service provider is likely to come under greater scrutiny, thereby increasing the possibility of customer dissatisfaction. The reliability dimension, which ensures timely delivery time after time, helps the service provider to meet the customer expectations fully at the lowest level of service expectation.
B. Responsiveness :
It is the willingness of the service firms staff to help customers and to provide them with prompt service. The customers may have queries, special requests, complaints, etc. In fact, each customer may have problems of his or her own. While the front-end employee may have been trained or equipped to deliver standardized services, the customers want them to go beyond this limit. It is the willingness to help the customer or willingness to go that extra distance that is responsiveness. Example: A customer calls room service to find out if they would pack a Jain lunch. It is not the hotels normal policy to cook such specialty and customized meals. However, the customer being very religious minded would be very pleased if the hotel could pack it for him to carry and eat. This may impose some strain on the kitchen. However, the hotel may be rewarded in two different ways if it agreed to provide the meal. The customer would be very pleased with the service and is very likely to recommend the hotel to his friends and acquaintances. In addition, the hotel could charge extra commensurate with the extra efforts. He is unlikely to mind paying more. The second aspect of responsiveness is speedy response to a customer request. When response is delayed customers usually loses interest. Many sales representatives respond on the phone, I will call you back. The call is never returned. The customer draws his or her own conclusion about the quality of service he is likely to receive in the future.
C. Assurance :
It defined as the ability of the company to inspire trust and confidence in the service delivery. It refers to knowledge and courtesy of the service firms employees and their ability to inspire trust and confidence in the customer toward the company. This dimension is considered vital for services that involve high risk as customers may not be able to evaluate all the uncertainties involved in the process by them. Example: Medical services requiring complex uncommon procedures, sales / purchase of financial securities, investment issues, legal affairs, etc. demand this service quality dimension. There are property developers/builders who provide a list of previous buyers of flats or apartments to potential buyers. The evaluation of construction services is beyond technical capabilities of most buyers. However, the prospective customers are free to call the previous customers. When prospective customers hear from them about the company and its satisfactory delivery, they feel assured and develop a more positive attitude towards the company.
D. Empathy :
It refers to the caring, individualized attention the service firm provides each customer. When service provider puts himself in the shoes of the customers, he may see the customers viewpoint better. When customers feel t5hat the provider is making his best effort to see their viewpoint, it may be good enough for most. Example: a lady customer with a young child arrives slightly late at the check-in counter and requests the agent for a seat along the aisle and near the toilet. Even if all such seats have already been taken up, the agent and the airline may make even effort to request another passenger to exchange seats and meet the customer demand. The lady passenger would be delighted if her request could be honored despite the last minute checking in, and even if she does not get such a seat, she would be grateful for their effort.
E. Tangibles :
It refers to physical facilities, equipment, and appearance of a service firms employees. The job of the tangible and physical evidence of a service is multifunctional. When a patient in the waiting room of a clinic sees the doctors certificate, he becomes aware of the quality of service he is about to receive. If a dental clinic provides patients with clean rubber footwear and freshly laundered bibs or coats before the actual service, the patients and their accompanying relatives or friends will be impressed. A dentist dressed in a spotless white coat is likely to impress, them even further. Tangibles provide the customer proof of the quality of service.
on-time arrival is a very important dimension to travelers, but SERVQUAL does not measure travelers perceptions of this variable. The third problem with problem with SERVQUAL deals with the gap theory methodology used for measuring the level of service quality. Measuring consumer expectations after a service has been provided will bias consumers responses. If customers had a positive experience at Blockbuster, they will tend to report lower scores for their expectations, so there is a measurable gap between what they expected and the actual service they received.
sales service. Buyers are not just conscious of the necessity of services after the purchase has been made - they demand it. Having tasted the joys of greater and enhanced services in all walks of life, urban Indians are clamoring for more. They now want an improvement in the quality of service offered. Service quality therefore is the latest buzzword - in corporate boardrooms, the local bania's siesta conversation with his neighbors and in the king's lair - the urban household. How then is the service provider to go about the difficult task of analyzing his business operations for chinks in delivery of quality service? What tool would indicate to him that he has misunderstood his customer? Where would he seek a consultant for rectifying this fatal error? The Gaps model of service quality looks into the gaps in service quality. It is a ready reckoned to service providers to analyze their existing service delivery system and rectify matters before the company has lost the attention of the customer.
Fig. 1: The Integrated Gaps Model of Service Quality (Parasuraman, Zeithaml, Berry 1985)
cost attached to the same slow and indifferent service - albeit by better looking personnel in better surrounds. Private sector banks understood the problem a mite better - but they too slipped up as business grew. They lost out on sustainability of the service promise. Example: A contractor using an electrical subcontractor for the first time may expect the subcontractor to use a certain grade of wire conduit in all of their construction sites they subcontractor, however, may think the contractor wants to use the lowest grade to keep the cost down. Unless the contractor clearly delineates his expectations, he will probably be dissatisfied because the subcontractor did not do what was expected. The reverse may also occur. Management can provide a service they think customers expect without conforming customer expectations. Although on the surface this sounds good because customer expectations will probably be exceeded, there are two dangers. First, if customer expectations are consistently exceeded, in time, these expectations will rise to meet the service being provided. Example: If customers do not expect their cars to be vacuumed and cleaned inside when the oil is changed at Quik Lube, then at first they will be pleased with this extra touch. But the next time they use Quik Lube, their expectations increase and after a few times of receiving this special touch, it will become a permanent part of their expectations. Failure to vacuum and clean the interior of the car will then result in a negative gap since the vacuuming and the cleaning of the interior becomes something customers expected. The second danger is that the firm may be spending money on providing services that the customers do not expect or perhaps even care about, thus yielding a negative impact on profit.
or that the lapse is unlikely to loss of customer patronage. Another trend related to Gap One involves current company strategies to retain customers and strengthen relationships with them. The term relationship marketing is used to describe this approach, which emphasizes strengthening the bonds with existing customers. When customers have strong relationships with their customers, gap 1 is less likely to occur. Lack of market segmentation to understand the needs are such segment. Market segmentation is the grouping of customers sharing similar requirements, expectations and demographic or psychographic profiles. Segmentation is usually done to understand the needs of customers more elaborately or distinctly. While segmentation has been used by marketers for decades, it may be more critical today than any other time. Customers are no longer satisfied by homogenous products and services for the mass market; now, more than ever before, they seeking and buying services that fit their unique configuration of needs. If the needs are not precisely understood due to lack of segmentation, quality perception is likely to be poor.
Many marketers are achieving success with niche marketing targeting segments of customers and developing services and strategies that fit their needs better than other companies offerings. Other marketers are embracing the concept of mass customization creating services for a large group of customers that can be customized or appear to be customized through technological innovations. Technology affords companies the ability to acquire and integrate vast quantities of data on customers that can be used to build relationships. Frequent flyer travel programs conducted by airlines, car rental companies, and hotels are among the most familiar programs of this type. Relationship marketing is distinct from transactional marketing, the term used to describe the more conventional emphasis on acquiring new customer rather than on retaining them. When companies focus too much on attracting new customers, they may fail to understand the changing needs and expectations of their current customers.
Vague or undefined service design. The service design may have been running traditionally for a number of years without any alterations, or it may have been borrowed from some other concept. Defining the service would go a long way towards determining the standards of customer satisfaction. Poor service design may also be a result of failure to connect service design to service positioning. Resource constraints. A service firm may understand and even want to deliver services desired by the customers but is unable to because of resource constraints. Example, a local air conditioner dealer knows that customers want quick repairs. However, demand for both services in springs and early summer will exceed the firms capacity to provide the service. The no of technician available to repair AC is limited and the number of hours they can work is limited. Because of personnel constraints these services cannot meet customer expectations for quick service during the peak demand time. Market Conditions. The most competitive market condition impacting this gap is known as competitive parity, a situation where competitors produce almost identical quality goods and services. To prevent a competitor from capturing additional market share, companies often match a competitors offering. In some cases, firms translate customer expectations into matching competitive offerings rather than meeting the wants of their customers. If this is done there will be a gap between what firms know customer expect and service pacifications, or what the firm actually provides. For example, an airline may know that passengers want more leg room in the airplane but they do not translate this in service specification. They do not put the seats further apart since other airlines are not doing it and to do so would reduce the potential passengers load. A second market condition affecting gap two is monopoly markets such as cable television services, utilities, and basic telephone services. Each operates with a virtual monopoly with no competitors. These firms may understand certain needs and expectations of their patrons but may not translate them to service specifications unless required to do so by a government agency supervising them. Their rationale for permitting this situation may be that the cost of meeting customer expectations is higher than the additional revenues that could be generated if the change were made. Management Indifference. Management may talk about providing high quality service, but in actual practice they may offer only the minimum level of service that will suffice. The goal is not to provide customer satisfaction but to avoid customer dissatisfaction. In the short run, this philosophy may succeed and may even generate greater revenues because more customers can be served. But in the long run, customers will switch to competitors who provide better service. Management complacency is a problem in many corporate owned service facilities because of the pressure to generate short term profits. Inadequate service leadership: Perception of infeasibility Inadequate management commitment
If service firms are going to get serious about providing high quality service, they must start with a commitment by management. Not only must management be committed to providing a high level of service, they must also set an example for their employees. Managers who talk service but fail to deliver an example of good service are not committed. Reduction of this gap requires setting service quality goals. These goals must be set with the customer, the service contact provider and management in mind. Customer contact employees must understand managements perspective and the need to generate a profit. In exchange, management must understand what is possible and what is not in terms of operations. Service contact personnel can provide their supervisors with valuable input into the best process for achieving service quality goals. To be effective, the goals must be customer oriented. The service quality standards must be what customers want and desire. Including in the goal setting process is advantageous to both management and service contact personnel. Task standardization will also reduce the size of gap two. Standardization can be achieved through hard technology (substituting machines or computers for people) or soft technology (improving work methods). Both methods are designed to standardize the operation and provide a uniform delivery of the service to customers, reducing the gap between management perception of consumer expectations, and the translation of those expectations into service quality specifications. Example: Hard technology can be used to completely replace the human provider as in case of ATMs or it could be used to improve the consistency of service, as in the case of the diagnostic computer used by auto mechanics and the automatic scrubbing machines used by cleaning the service. Example: The standardized employee training procedure used by McDonalds, the prepackaged tours offered by many travel agencies, and the buffet used by pizza Hut. By standardizing the training McDonalds strives to ensure that all employees use the same procedure in preparing food for their customers. No matter where one buys a McDonalds hamburger, it will look and taste the same. The same concept applies to prepackaged tours offered by travel agencies and a lunch buffet offered by Pizza Hut. Closing gap two by demonstrating strong leadership commitment and by setting by setting customers performance standardshas a powerful positive impact on closing the customer gap. Leadership plays a pivotal role in providing service excellence. Strategic measurement systems are also necessary to close this gap. While company measurement has historically been the bailiwick of finance and accounting, management strategies now call for the addition of key marketing indicators in the overall measurement program. To achieve competitive superiority in an era when satisfying a customer is a priority, companies need measurement systems that incorporate and align measures of customer perceptions and satisfaction with pivotal operational and performance indicators. Sam Walton of Wal-Mart is hailed as a service leader worldwide. His service philosophy to spur on his people and organization is as follows: Realize that customer service is the key. Design for comfort and convenience. Provide one-stop shopping. Customize Invert the organizational chart so that the customer is on the top and the management is at the bottom. Empower the sales staff. Provide servant leadership - Wal-Mart's managers are servants to the needs of their employees and customers. Recognize that the customer is always right.
While Sam Walton's philosophy may appear simplistic, it was his adherence to these very principles that led to the soaring growth of Wal-Mart in the 1990's, when others were retrenching and cutting down on costs.
Failure to smooth peaks and valleys of demand Inappropriate customer mix Over reliance on price to smooth demand Customers not fulfilling roles: The customer is as much involved in the process of services delivery as the service provider. Therefore, training the customer to receive the service to derive maximum benefit is essentials. Customers lacking knowledge of their roles and responsibilities. Customers negatively impacting each other Lack of training to the franchisees staff: Whenever service is provided by a franchisee in lieu of the service provider, the front-end employees of the franchisee require elaborate training to be able to cope with the customer demands in a standardized and pre-determined manner. Most service companies face and even more formidable task: attaining service excellence and consistency in the presence of intermediaries who represent them, interact with their customers, and yet are not under their direct control. Among the intermediaries that play a central role in service delivery are retailers, franchisees and dealers.
However, supervisors often tell employees to follow the correct job specifications but reward or punish employees on other criteria, which is called role conflict. For example, employees may be evaluated by their supervisors on such criteria as a balanced cash register for a bank teller, the number of automobiles repaired by a mechanic, and the amount of time spent cleaning a particular office by a janitor. When this occurs, employees will shortcut the specifications to improve whatever criteria are used by their supervisors in their evaluations, often neglecting other service specifications. Role conflict is inherent in many service contact positions. How this role conflict is handled will have an impact on how closely the service delivered matches the service specified. The primary conflict faced by service contact personnel is between expectations of customers and expectation of management. This conflict is increased when employees are not given flexibility to meet the needs of customers, when employees have little control over how the service is to be performed, the amount of paper work necessary to carry out the service, and the number of other employees a service provider must contact or use in the process of performing the service. To reduce role conflict, management should allow service contact personnel adequate flexibility to meet customer needs. Employees need to have some control over the service encounter because the greater the control, the less role conflict experienced. Control and flexibility mean service employees will not have to go to other employees and managers with questions and for permission to modify the service to meet a customers unique request. It is responsibility of the management to reduce the amount of conflict faced by their service employees. Not only does reducing role conflict aid service employers in meeting the needs of customers but it will increase job satisfaction, job morale and length of employment. Role ambiguity refers to employees lack of information or understanding of their job and job requirements. As role ambiguity increases job satisfaction decreases. It also becomes difficult for employees to perform the necessary job specifications if they lack an understanding of what these specifications are. Management often mistakenly assumes employees understand their job when, in fact, service contact personnel do not have clear understanding of goals and expectations. Although they have been told what to do, they may not have been told how the service is to be performed. To reduce role ambiguity, service firms must do the following: Provide frequent and clear downward communication from management on what is expected and how the service is to be performed. Provide employees with constructive feedback to help them understand how the service is to be performed and what management expects Provide employees with product and service knowledge so they canperform in their jobs better. Train and retrain employees in the proper method of performing the service Train service contact personnel Communicate effectively with customers, with supervisors, and with other employees.
impossible to deliver. Communication through these channels tends to raise customer expectations and set certain standards to assess the service in the minds of customers. Any discrepancy between promised and actual service tends to broaden the customer gap. A recent advertisement by a leading Pizza chain promised one free pizza with a specified order. On calling in for the offer, one found that the small print indicated that this offer was valid only at the counter and not on home delivery orders. Would the outlet have received so many calls if they had indicated this in bold type? While on the subject of pizzas, one wonders if Domino's manages to keep its promise of delivering anywhere in 30 minutes - especially in Mumbai traffic. If not, they must be making heavy losses on free pizzas.
sound show on any day. Taj Mahal is one of the wonders of the world, hence providing conservation guidelines for tourists in the communication content is an expectation.
There is considerable support for a link between improvements in service quality and improvements in service quality and improvements in financial performance. Grant reports that the American Customer Satisfaction Index studies found a positive correlation between customer satisfaction and stock market returns. Much of the literature has sort to establish a link between satisfaction and loyalty. Dick and Basu, in a conceptual paper on loyalty viewed satisfaction as an antecedent of relative attitude because, without satisfaction, consumers will not hold a favorable attitude towards a brand as compared to other alternatives available and will therefore not be predisposed to repurchase. . Much of the research into the outcomes of the satisfaction has measured behavioral intentions, for example, the likelihood of recommending a service or repurchasing it. However, in the light of increasing levels of competition in most services markets, behavioral intention based on loyalty generated through good service can easily be broken. This decline has been attributed to a number of factors including greater choice and information available to customers, the commoditization of several services, and increased levels of competition. Against this, some researchers have pointed out that much of the evidence to support a link between quality and financial performance is anecdotal in nature and refuted by analysis of corporate performance. It is suggested that there is wide spread evidence of managers frustration with the inability of quality improvement to improve organizational performance. Developments in information technology are offering new insights into the link between quality and financial performance. Large multiple outlet service organization are increasingly able to experiment with elements of service quality in test sights and to judge economic performance over time. A fast-food restaurant, For example, may implement a new staff payment system or training program in a number of experimental sites and will be able to identify changes in performance relative to other control branches. Some service providers have disaggregated their information even further by linking service quality questionnaires to features of the service which a respondent actually received. In this way, individual employees or groups of employees can be linked to measure of quality. While information technology is opening up new possibilities for correlating data about inputs and perceived outcomes, the problem of analyzing cross-sectional data remains. It is very difficult within a research framework to isolate all of the contributors to customers perceptions of quality except those which the researcher is interested in The Service Profit-chain.
Specific guarantees of service performance are sometimes offered, especially in respect of service outcomes. As an example parcel delivery companies often guarantee to deliver a parcel within a specified time and agree to pay compensation if they fall below this standard. Many of the public utilities now offer compensation payments if certain specified services are not delivered correctly, increasingly, service organizations set their service guarantees with reference to benchmarks established by bestpractice companies within their sectors, or in completely different sector. Many highly specific targets are therefore restricted to internal use where their function is to motivate and control staff rather than to provide guarantees to potential customers. While the major banks give their branch managers targets for such quality standards as queuing time for counter staff and availability of working ATM machines, it does not guarantee a specified level of service to its customers. Many services companies belong to a trade or professional association and incorporate the associations code of conduct into their own service offering. Codes of conduct adopted by members of professional associations as diverse as car repairers, undertakers and solicitors specify minimum standards below which service provision should not fall. The code of conduct provides both a reassurance to potential customers and a statement to employees about the minimum standards which are expected of them. Contrary to popular belief, a company operating to ISO 9002 does not guarantee a high level of quality for its service. Instead, ISO accreditation is granted to organizations who can show that they have in place management systems for ensuring a consistent standard of quality- whether this itself is high or low is largely a subjective judgment. Although this standard was initially adopted by manufacturing industries, it has subsequently found significant use among service companies, including education, leisure centers and building contractors. Increasingly, industrial purchasers of services are seeking the reassurance that its suppliers are ISO registered. In the case of some public sector services which operate in a monopolistic environment, quality standards are sometimes imposed from outside. In the case of privately owned utilities, the relevant regulating authority has the power to set the specific targets.
HUMAN FACTORS It basically includes employee recruitment and selection, training, rewards and motivation. I shall not deliver substandard service nor shall I let anybody else deliver substandard service is the type of motto to be adopted. For example, some quality conscious automobile companies have given the right of halting the assembly line to any concerned employee who may have noticed inadequate or defective components fitted on a vehicle. This quality consciousness is crucial to long term quality maintenance. In addition, customer feedback on quality issues has to be an important component of employee evaluation.
SYSTEMS SUPPORT It is not employees but also system which tends to produce defects. Thus, organizations have to put systems in place that ensure high quality services delivery. For example, the computerized system in the bank has to ensure accurate and timely delivery of the customer bills and statements. ORGANIZATIONAL FACTORS Organizations with very high number of levels within the structure tend to have very poor interaction between the front-end employees and the higher echelons within the organization. The reporting structure and close interaction between the supervisors and the front-end service delivery employees is very important. A receptionist being a front-end employee may be seen as the key person for the customer interaction. However if the receptionist is not authorized to ask the housekeeping unit to improve upon the service when a customer has complained about it, it may demotivate the employee, and, in future, the receptionist may not report problems with the housekeeping unit. FEEDBACK Organizations need to encourage feedback from every employee including the front-end employees as a part of the quality monitoring system. Employees have to be told that this feedback is crucial for the organizational success.
1] QUALITY CIRCLES
Quality circles are groups of non-supervisors and work leaders in a single company department who volunteer to conduct group activities in order to improve the effectiveness of the work in their respective departments. Fishbone or Ishikawa diagrams prepared by Ishikawa help to trace quality complaints to the responsible production process that is the root cause of the problem. The role of individual employees is very crucial to quality control of services as well as goods production. This is more so in the case of services where the service is usually delivered in person by one of the employees. The diagram below is a root cause diagram that enables you to pinpoint the causes contributing to the delayed departure. In addition, the frequency of each failure can be measured so that the reasons for poor quality service can be understood and both short and long-term measures can be instituted to tackle the situation.
department. Thus, services to internal customers also have to be given the same degree of importance as those for external customers. Every employee is a quality inspector and is empowered. Each and every employee can stop the assembly line. Thus, each employee is treated as a quality inspector and is empowered to take appropriate corrective action. Continuous measurement and improvement. It has been the belief of a number of organizations that the quality improvement needs to be done on a large scale to be effective. Contrary to this, it has been seen that while it helps to have a major review of the quality of Japanese goods and services owes much to the continuous measurement and improvement, even on a small scale. Thus, small tinkering towards quality improvement also contributes significantly to overall quality improvement due to the cumulative effect. Commitment to quality improvement from the top management. Organizational culture is very crucial to the quality improvement process. In particular, the contribution of top management and their commitment is also crucial as employees usually emulate the attitudes of the top management. When the top management is committed to quality improvement, the employees feel confident that they would enjoy the support of top management even when they have to make some hard unpalatable decisions leading to short term loses. THE FACTORS THAT CAUSE THE FAILURE OF TQM ARE AS FOLLOWS: More rhetoric than real commitment to the development of quality culture. Many times we see quality statements or organizational objectives displayed prominently at work place. Surprisingly, most of them are for the visitors or the customers rather than the operating employees! Thus, they are decorative rather than operative in nature. This does not bring about the desired changes in the products or services, nor does it bring about an attitudinal change. More focus on cost saving than on long-term generation of value for the customers. Some of the quality control initiatives require capital funds or increases in the variable cost. In the short run, they may sound like unnecessary costs and therefore not desirable. However, in the long term, quality improvement would bring about customer satisfaction through greater value delivery and customer loyalty. These costs will eventually transform themselves into financial gains. Lack of quality initiatives, support, or follow-through actions. The lack of commitment also could mean no further initiatives or follow up actions. Employees may tend to think that if the immediate crisis is adverted, there is less compulsion to follow up on the efforts made.
Automation can produce data about various customer transactions. It can be used as a source of information about consumer behavior, special interest, etc. This can be used to make customized offerings to high net-worth customers for mutual benefits.
Specialization in a particular area of service:While there are any number of both public and private hospitals in India, a very large percentage of them offer extensive services in almost all the areas of medical care. By specialization in one area, however, a hospital can develop expertise, reduce costs, and build up a quality reputation which can be unmatched. In Canada, Dr Shouldice, a pioneer in the technique for surgical correction of hernia (a condition usually brought about by the weakening of the stomach wall), and his colleagues run a number of hospitals which surgically treat only hernia. Unlike in the case of other hospitals, the surgery
is mostly performed under local anesthesia, with the patient walking in and out of the operating theatre with the help of the surgeon. The previously operated patients in their post-operative stay in the hospital provide moral and spiritual support to the newly admitted patients, which lead to reduced anxiety and faster recovery. Adoption of modularization Instead of offering completely different or distinct services, the company may design add-on modules and offer them to customers by way of greater variety. Thus, a tour and travel company may offer an add-on package for children below 3 or between 3 and 12 years of age. The company may offer an additional stay package at attractive prices, single room supplement for a price, etc. these modules will effectively meet the demands of the greater segments of the customers more precisely. Various modules can be combined to produce distinctive services that appeal to various customers. For example, in Kulu Manali, a large number of hiking alternatives are available to a tourist. Thus, the tourist can decide on an uphill and/or downhill walk. The tourism department offers a choice of walk trail for 2 hours, 4 hours, or 6 hours. One can choose either a bus, funicular railway, chair car, ski lift, or even a post office bus to reach the starting point and then choose the trail of the selected duration. Even the return arrangement is similarly made by flexible mode of transport. As a result, tourists return to the area frequently and choose the modular package best suited to their pockets and levels of energy.
2] Customer panels
These can provide a continuous source of information on customer expectations. Groups of customers, who are generally frequent user, are brought together by a company on a regular basis to study their opinions about the quality of service provided. On other occasions, they may be employed to monitor the introduction of a new or revised service for example a panel could be brought together by a building society following the experimental introduction of a new branch design format. The use of continuous panels can offer organizations a means of anticipating problems and may act as an early warning system for emerging issues of importance. Retailers have been involved in the operation of continuous panels contribute to monitor their level of service provision as well as letting panels contribute to new product development research. User groups also have an important part to play in many of the UKs recently privatized industries such as gas, water, electricity and telecommunication. However, the validity of this research method is quite dependent on how well the panel represents consumers as a whole. There has been a suggestion that the number of people prepared to become members of panels is not rising as quickly as firms appetite for information. The result has been the emergence of professional panel members who may not be representative of service users as a whole.
3] Transaction analysis
An increasingly popular method of evaluative research involves tracking the satisfaction of individuals with particular transactions that they have recently been involved in. This type of research enables management to judge correct performance, particularly customers satisfaction with the contact personnel with whom they have interacted, as well as their overall satisfaction for the service.
The research effort normally involves a mail-out questionnaire survey to individual customers immediately after a transaction has been completed. For example, the Automobile Association surveys customers who have recently been served by its breakdown service and many building societies invite customers who have just used their mortgage services to express their views on the service received via a structured questionnaire. An additional benefit of this research is its capability to associate service quality performance with individual contact personnel and link it to reward system.
4] Perception surveys
These investigations use a combination of qualitative and quantitative research methods. Many professional services organization have employed such studies in order to develop future market strategies. Their aim is to achieve a better understanding of how customers view an organization. In other words, to help the firm itself as clients see it. The initial qualitative stages of a study involve researchers in identifying the attitudes of clients towards the firm as well as how the firm is perceived by the community at large. Group discussions and/or in depth interviews are the vehicles used for assessing the perceptions of people at this stage. In the quantitative phase of the survey, clients are asked to judge the companys performance using a battery of attitude statements. Perception studies of ten include an analysis of the perceptions of a firms employees.
5] Mystery customers
The use of mystery customer is a method of auditing the standard of service provision, particularly the staff involvement in such provision. A major difficulty in measuring service quality is overcoming the non-conforming of staff with performance guidelines. This so called service-performance gap is the result of employees being unable and/or unwilling to perform the service at the desired level. An important function of mystery customer surveys is therefore to monitor the extent to which specified quality standards are actually being met by staff. This method of researching actual service provision involves the use of trained assessors who visit service organizations and report back their observations. Audits tend to be tailored to the specific needs of a company and focus on an issue that it wishes to evaluate. The format of the enquiry is determined jointly by the client and research organization. The constructive nature of this research technique has to be stressed, as the mystery customer can quite easily be mistaken by staff as an undercover agent spying on them on behalf of the management. In particular, if the techniques are applied correctly, they can allow management to know what is really happening at the sharp end of their business. To be effective mystery shopping surveys need to be undertaken independently, should be objective and must be consistent. The training of assessors is critical to the effective use of this research method and should include, for example, training in observation techniques which allows them to distinguish between a greeting and an acknowledgement.
6] Analysis of complaints
Dissatisfaction of customers is most clearly voiced through the complaints that they make about service provision. For many companies, this may be sole method of keeping in touch with customers.
Complaints can be made directly to the provider or perhaps indirectly through an intermediary or a watch dog body. Complaints by customers, referring to instances of what they consider poor-quality service may, if treated constructively, provide a rich source of data on which to base policies for improving service quality. However, customer complaints are at best an inadequate source of information. Most customers dont both to complain, remain dissatisfied and tell others about their dissatisfaction. Others simply change to another supplier and do not offer potentially valuable information to the service provider about what factors where wrong which cause them to leave. In truly market - oriented organizations, complaints analysis can form a useful pointer to where the process of service delivery is breaking down. As part of an overall programme for keeping in touch with customers, the analysis of complaints can have an important role to play. The continuous tracking of complaints is a relatively inexpensive source of data which enables a company to review the major concerns of customers on an ongoing basis and hope fully rectifies any evident problems. In addition the receipt of complaints by the firm enables staff to enter into direct into direct contact with customers and provides an opportunity to interact with them over their matters of concern. As well as eliciting customers views on these issues in particular, complainants can also contribute views about customer service in general. Many companies have gone to great lengths to make it easy for customers to complain, for example by creating free phone telephone lines and making comment cards readily available.
7] Employee research
Research undertaken among employees can enable their views about the way that services are provided and their perceptions of how they are received by customers to be taken into account. Data gathered from staff training seminars and development exercises, feedback from Quality circles, job appraisal and performance evaluation reports, etc. can all provide valuable information for planning quality service provision. One way in which formal feedback from staff can be built into a systematic research program is the operation of a staff suggestion scheme. The proposals which staff may make about how services could be provided more efficiently and/or effectively certainly do have an important role to play in moving service quality. Research into employees needs can also identification of policies which improve their motivation to deliver a high quality service. Many of the techniques employed to elicit the views of employees as internal customers are in principle the same as those used in studies of external customers. Interviews and focus may be used in the collection of qualitative data on employee needs, wants, motivations and attitudes towards working conditions, benefits and policies. In the respect of obtaining involvement and participation, involving employees in the research process and its findings, for example by using them to gather data, showing them videotapes of group discussions and interviews with customers and circulating them with the findings of research reports, can do a lot for improving their understanding of service quality issues throughout their organization. There are many barriers to the flow of information from employees to managers, especially in organization where there is no culture of listening to staff. Where there are clearly identified, and for acting on the result, a shared commitment to improving quality can greatly improve customers perception.
8] Benchmarking studies
The nature of customers quality expectations in other similar service industries can be useful source of information for managers. It is often apparent that customer needs may be similar between different industries, even though the service product on offer is ostensibly quite different. Many common dimensions cut across the boundaries of industries and apply to services in general for example courteous and competent staff, a pleasant environment, and helpfulness, to name but a few. It can therefore be beneficial to investigate the nature of service provision in closely related services areas, and draw upon the findings of any research that has been made available. In particular, it is worth while investigating what is known in those services sector that have a good track record of analyzing and responding to customers needs and identifying whether it is applicable to an industry that has only recently adopted a customer-led approach. For example, it is possible to learn a lot about certain aspects of hospital service from what hotel and catering establishments have been researching and practicing for some considerable time. Continuing with this theme, many services organizations that have been operating outside the private market place for many years can benefit from an understanding of the operations of their counterparts in other countries that have openly marketed their services I in a freely competitive market. In this way, managers within the UK National Health Service may learn a lot about customer care by examining health services in the USA. The term benchmarking is frequently used to describe the process by which companies set standards for themselves, based on a study a best practice elsewhere. Best practice could be defined in terms of firms within the same sector, or completely different sectors which share similar processes. Benchmarking can be undertaken at a number of levels, based on what is compared and what the comparison is being made against: Performance benchmarking This is essentially based on outcome measures. Process benchmarking For example, the efficiency and effectiveness of customer handling procedures. Strategic benchmarking For example, comparing the integrity of a companys strategic plan with best practice in the industry. Internal benchmarking This involves comparing internal processes and structures. Competitive benchmarking This may be with respect to market share, selling price etc. Functional benchmarking Sometimes the task will be compare the performance of a companys functions with best practice. Benchmarking involves a five-step continuous process: plan the study; from the benchmarking team; identify potential benchmarking partners; collect and analyze the information; and adapt and improve. While benchmarking produces a standard against which improvements are continuous and benchmarks can go out of date very quickly.
9] Intermediary research
Service intermediaries often perform a valuable function in the process of service delivery, performing their role in quite a different manner to goods intermediaries. Research into intermediaries focuses on two principle concerns: Firstly, where intermediaries form an important part of a service delivery process, the quality perceived by a customer is to a large extent determined by the performance of intermediaries. In this
way, the perceived quality of an airline may be tarnished if its ticket agents are perceived as being slow or unhelpful to customers. Research through such techniques as mystery customer surveys can be used to monitor the standard of quality delivered by intermediaries. Secondly, intermediaries as co-producers of a service are further down the channel of distribution and hence closer to customers. They are therefore in a position to provide valuable feedback to the service principal about consumers expectations and perceptions. As well as conducting structured research investigations of intermediaries, many services principals find it possible to learn more about the needs and expectations of their final customers during the process of providing intermediary support services such as training.
against the company were successful, analysts said that they generated a large amount of bad publicity. Despite the protests and the accusations against the industry, analysts noted that customer behavior in the fast food industry was paradoxical. People realized that junk food was unhealthy and criticized companies for serving it, but when healthier alternatives were made available, customers did not like them. Apart from increasing public aversion to fast food, increased competition also harmed McDonalds adversely. McDonalds had to face competition not only from fast food chains like Burger King, Wendys and Pizza Hut, but also from chains like Subway, Cosi and Panera Bread, which dealt in salads and sandwiches. McDonald focused on building more stores, consumers were demanding better food and more variety. Acc. To a survey conducted by Business week, consumers who ate fast food at least once a month rated both Wendys and burger king better than McDonalds, as far as the quality of food was concerned. McDonalds continuous expansion and failing franchisee relations had an adverse effect on service and quality, which had been its USP for many years. In 1990s, McDonalds stopped grading its franchisees by mystery shoppers on parameters such as cleanliness, speed and service. In 1992 McDonalds introduced made for you kitchens to counter custom-made food systems at Wendys and Burger King, but it extended the time required to serve instead of speeding it up. Research also found that slow service and rude professional employees were major sources of customers complaints. Acc. to a survey, Wendys took 127 seconds to serve its customers while V took 163 seconds. Besides, McDonalds products had become stale and the company had failed to come out with successful product launches since the early 1980s. Although it attempted in the 1990s, to introduce 40 food items but most of them failed to appeal to customers. The Golden Arches Rise Again: After McDonalds announced its first quarterly loss in38 years in 2003, the board realized that big changes were required in the companys strategy and direction. The board ousted Greenberg and installed Cantalupo as the CEO. Soon after taking over, Cantalupo prepared the plan to win, which outlined McDonalds strategy for the next three years. The plan streamlined the companys operations and aimed to create a McDonalds that was more geared to the new conditions in the fast food industry. The cornerstone of the turnaround plan was the improvement of comparable sales, which could be increased by improving the quality of service and operations in existing restaurants, instead of funneling capital spending into new openings. Towards this end, the company made several improvements designed to help the restaurants function more efficiently. For instant, it reduced the number of shelf-keeping units by 84, which reduced inventory, and designed new menu boards that would include more pictures to make ordering easy. It also introduced new automated drink dispensers, French fry bins, and a hydraulic vegetable-oil-delivery system that would save time in the kitchen. The menu was simplified and included a greater number of healthy options, while doing away with slow moving products. For instance, instead of selling separately a Double Cheeseburger meal, a Quarter Pounder meals, and a Two-Cheeseburger meal, McDonalds planned to sell only the Quarter Pounder. The number of items in a Value Meal was also pared down from 13 to 8. In a move to offer a healthier menu McDonalds Increased its focused on salads and sandwiches. In 2003, it introduced entre-sized salads, along with items like Mc-Griddles breakfast sandwiches, whitemeat chicken nuggets and chicken nuggets and chicken strips, which were reasonably successful. It also began offering fruit with Happy meals. In early 2004, McDonalds began phasing out its super-size portions of fries and soft drinks. It also launched the Adult Happy meal, which was a meal designed for grown-ups that included a salad, bottled water, a pedometer and a booklet of walking tips. Soon after introducing this concept, comparable store sales increased 10.5%. Some McDonalds outlets were also diversifying into coffee. Some Australian franchisees were testing a concept called McCafe in over 500 outlets in Australia.
McDonalds was also on a drive to improve quality of service and maintenance standards in its restaurants. In 2003, Cantalupo reinstalled the grading system by mystery shoppers to identify, improve, or eliminate underperforming restaurants and to check whether the franchisees were maintaining the expected high standards of hygiene and cleanliness. Under the turnaround plan, the company decided that each restaurant would be visited by mystery shoppers- anonymous visitors paid to observe restaurants- at least 16 times a year. In 2004, the company introduced the travel path which required that a staff member, in a restaurant, had to walk around at regular intervals during the day to ensure that everything was in order. Surveys conducted by the company in the early 2000s revealed that Ronald McDonalds was one of the best recognized icons in the US, ranking just behind Santa Claus. McDonalds began to showing signs of turning around by early 2004. Number of satisfied customers increased by more than 2 million over 2003-2004. Fast Food restaurant Factor Analysis Fast Food Restaurant Attributes Critical Factors Influencing Service Quality Individual attention paid to you, when in group (0.663) Staffs acknowledgment on entering the outlet (0.655) Providing reliable informationmenu ingredients, nutritional value, offers, etc. (0.683) Response to suggestions/feedback/complaints (0.628) Staffs knowledge in answering (0.621) Accommodation of requests (0.594) Assistance for seating (0.591) Service provision in time (0.570) Effective utilization of personal details for mailers, feedback, offers, etc. (0.542) Recreational or special facilities play area for children, indoor games, etc. (0.508) Personalized service and customer delight Maintenance of Hygiene/ Cleanliness (0.715) Correct provision of ordered items (0.688) Accuracy in billing (0.665) Provision of items mentioned in the menu card (0.646) Quality of preparation : Ordered items (0.635) Convenience of outlet hours (0.631) Image of the fast Food chain (0.571) Courtesy shown by staff (0.555)
Dimension
Tangibles Reliability Responsiveness Assurance Empathy
McDonalds
-1.09 -1.6 -1.72 -0.9 -2.45
Pizza Hut
-1.05 -1.2 -1.4 -0.936 -2.5
Dosa Plaza
-1.8 -0.931 -1.86 -0.5 -1.584
The above table shows, that the fast food industry received strong ratings on the empathy dimensions, particularly caring and individualized attention and low ratings on the Assurance dimensions. This study
used a seven points scale range from strongly agree (7) to strongly disagree (1), to assess all five dimensions of service. Table I suggests that Dosa Plaza is the highest performing fast food restaurant and holds an advantage over others in the area of perceived reliability, assurance and empathy dimensions Whereas Pizza Hut is good at responsiveness and tangible dimensions. Responses were computed by subtracting the expectation response from the perception response. Each aspect of the quality of service showed differences with respect to the size of gap score. The bigger the gap is, the more important the dimensions from the customers point of view, which would be ranked in the following, order: Empathy, Responsiveness, Tangibles, Reliability and Assurance. None of the service quality dimensions had a positive SERVQUAL score, suggesting that the Fast food restaurants considered for this study did not meet or exceed consumers expectations.
CONCLUSION:
Findings from this study provide initial direction in determining the optimum service quality attributes to focus on in promoting fast food services. No positive scores were found. The largest discrepancy was found along the empathy dimension. This indicates that the sample population appears not to be getting what they expect from their fast food service experience as far as individual attention is concerned. If the industry persists in measuring and monitoring the perceptual aspects of fast food service quality, the complementary aspects of basic outcome must be tracked as well to ensure an appropriate and satisfactory customer experience. Managerial Implications: These results have several managerial implications, in that they support the findings of previous research which indicates that customer contact employees play an important role in affecting customer perception of service quality. In general, it is important for managers to identify the relevant intrinsic and extrinsic cues used by consumers in order to communicate the relevant quality signals to them. The implication of this research is to design a service delivery system that promotes positive moments of truth. Moreover, using service quality assessment like SERVQUAL can ensure that fail points in customer encounters are reduced, leading to a positive experience and strong customer referrals. Additionally, managers should make key performers aware of their role and provide them with adequate training in order to offer a consistently high standard of service delivery. We saw low customer ratings on the empathy dimension of service quality in our research. Due to the dominant role played by the employees in the fast food industry, management should make sure that there are always sufficient staffing levels to cope with peaks and troughs in demand. In doing so, they will optimize service delivery and provide consistent service at all times. Finally, it is important that the service quality be assessed on a regular basis. The first assessment provides a baseline for comparison with future assessments. This comparison is essential for gauging the effectiveness of service quality improvement efforts and identification of service quality trends as they emerge. The frequency of reassessments will vary with the individual firms situation. Conclusion The Service Quality Top Ten Lessons The Key lessons which I learned after the whole study and the developments of the last 10-15 years are as follows: Service delivery is a process, it is as subject to the disciplines of analysis and process control as any manufacturing process. Customer value is built in to service design, and it is possible to evaluate service design systematically using tools such as service blueprinting, Gap model of service delivery, service profit chain, return on quality analysis. The times are changing, as Bob Dylan wrote gives a conclusion that the old road for financial success for business was to seek profit growth through market share and through cost economies. Times have changed, and the new order identifies that both cost reduction and revenue increases through retention and satisfaction, or seeking market share and customer loyalty. Everything includes service, and most things are predominantly services. Think globally, act locally. Larger organizations need to recognize that in delivering customer value, homogenous an enterprise following a single, perspective customer value formula doesnt work optimally.
Quality isnt free. Investments in service quality improvements must be made with the an eye on Net Present Value (NPV) or Return on Investment (ROI) as other investments, and with the same discipline in identifying anticipated benefits, and measurement of outcomes. Quality doesnt always lead to profits; For an individual firm, higher service quality is not an unconditional guarantee of profitability. Blind faith in quality initiatives is often a cover on the organizations failure. Do it with numbers. Clearly there is an emerging science to developing quality service, and increasing customer value. There are many tried and true methods for measuring customer satisfaction. One size doesnt fit all. The ultimate goal of the customer value models is company profitability but service delivery systems arent designed as one size to fit all. The consequence may be an active plan to lose some customers. Understanding customers needs even when you know different customers have different needs, recognize that each customers needs may vary dependent on situational factors. And, lastly, when in doubt ask. The best way to understand what customers value is to ask them. The Gap model of service delivery is useful approach to ask customers what they value, and explore with staff and management as to how to deliver it. Improving service quality is certainly not a simple, straight forward exercise. Service quality can be improved if the following areas are given due attention: Identifying primary quality determinants, Managing customer expectations, Managing evidence, Educating customers about the service Developing a quality culture, Automating quality, Following up the service quality information system, Employing benchmarking wherever possible and Keeping track of internal costs, external costs and quality maintenance costs.