SERVICE MARKETING

MANAGEMENT

The Gaps Model of Service Quality

Chapter 2Chapter 2

This Chapter Objectives are to:

1.Introduce a framework called the gaps model of service quality2.Demonstrates that the gap model is useful framework for understanding service quality in an organization.3.Demonstrate that the most critical service quality gap to close is the customer gap, the difference between customer expectations and perceptions.4.Show that the four gaps occur in the companies, which we call the provider gaps, are responsible for the customer gap.5.Identify the factor responsible for each of the four provider gaps.

Theory Of The Gaps Model In Service Marketing

History of the Gaps Model

The gaps model of service quality was first developed by The gaps model of service quality was first developed by a group of authors, Parasuraman, Zeithaml, Berry, at a group of authors, Parasuraman, Zeithaml, Berry, at Texas A&M and North Carolina Universities, in 1985. Texas A&M and North Carolina Universities, in 1985. Based on exploratory studies of service such as executive Based on exploratory studies of service such as executive interviews and focus groups in four different service interviews and focus groups in four different service businesses the authors proposed a conceptual model of businesses the authors proposed a conceptual model of service quality indicating that consumers’ perception service quality indicating that consumers’ perception toward a service quality depends on the four gaps existing toward a service quality depends on the four gaps existing in organization – consumer environments. They further in organization – consumer environments. They further developed in-depth measurement scales for service developed in-depth measurement scales for service quality in a later year.quality in a later year.

Theory of the Gaps Model

Perceived service quality can be defined as, according to the model, Perceived service quality can be defined as, according to the model, the difference between consumers’ expectation and perceptions which the difference between consumers’ expectation and perceptions which eventually depends on the size and the direction of the four gaps eventually depends on the size and the direction of the four gaps concerning the delivery of service quality on the company’s side.concerning the delivery of service quality on the company’s side.

  

Customer Gap = f (Gap 1, Gap 2, Gap 3, Gap 4)Customer Gap = f (Gap 1, Gap 2, Gap 3, Gap 4)

  

The magnitude and the direction of each gap will affect the service The magnitude and the direction of each gap will affect the service quality. For instance, Gap 3 will be favourable if the delivery of a quality. For instance, Gap 3 will be favourable if the delivery of a service exceeds the standards of service required by the organization, service exceeds the standards of service required by the organization, and it will be unfavourable when the specifications of the service and it will be unfavourable when the specifications of the service delivered are not met.delivered are not met.

The Gaps Model

The Customer Gap:The Customer Gap:The difference between The difference between

customer customer perceptionsperceptions and and expectationsexpectations

Results from Provider GapsResults from Provider Gaps

The Customer gap

Expected Service

PerceivedService

Customer gap

Customer Expectations

Customer Perceptions

are the standards or reference points that customer bring into service experience often consist of what customer believes should or will happen.

are subjective assessment of actual service experiences.

The sources of customer expectations are marketer controlled factors (such as pricing, advertising, sales promises) as well as factors that the marketers has limited ability to affect( innate personal needs, word of mouth communications, competitive of feelings).

Customer gap cont’d

Broadly it is the goal of services marketing to bridge this distance, and we will devote virtually .

Provider Gap 1: Not knowing what customers expect Inadequate marketing research orientationInadequate marketing research orientation

Insufficient marketing researchInsufficient marketing researchResearch not focused on service qualityResearch not focused on service qualityInadequate use of market researchInadequate use of market research

Provider Gap 1: Not knowing what customers expect Lack of upward communicationLack of upward communication

Lack of Lack of interactioninteraction between management between management and customersand customers

Insufficient Insufficient communicationcommunication between between contact employees and managerscontact employees and managers

Too many Too many layerslayers between between contact personnel and contact personnel and top managementtop management

Provider Gap 1: Not knowing what customers expect Insufficient relationship focusInsufficient relationship focus

Lack of market Lack of market segmentationsegmentationFocus on Focus on transactionstransactions

rather than relationshipsrather than relationshipsFocus on Focus on newnew customers customers

rather than rather than relationrelation customerscustomers

Provider Gap 1: Not knowing what customers expect Inadequate service recoveryInadequate service recovery

Lack of encouragement to listen to customer Lack of encouragement to listen to customer complaintscomplaints

Failure to make amends when things go Failure to make amends when things go wrongwrong

No appropriate recovery mechanisms in place No appropriate recovery mechanisms in place to service failuresto service failures

Customer driven standards

are operations standards set to correspond are operations standards set to correspond to customer expectations and priorities to customer expectations and priorities rather than to company concerns such as rather than to company concerns such as productivity or efficiency.productivity or efficiency.

Provider gap 2 exist in service organizations for a variety of reasons. Those people responsible for setting standards, typically management, sometimes believe that customer expectations are unreasonable and unrealistic.

They may also believe that the degree of variability inherent in service defies standardization and therefore that setting standards will not achieve desired goal .

Provider gap 2 cont’d

Because service are intangible, Because service are intangible, they are difficult to describe and they are difficult to describe and communicate. This difficulty communicate. This difficulty becomes especially evident when becomes especially evident when new services are being developed. new services are being developed. It is a critical that all people It is a critical that all people involved (managers, frontline involved (managers, frontline employees, and behind the scene employees, and behind the scene support staff) be working with the support staff) be working with the same concepts of new service same concepts of new service based on customer needs and based on customer needs and expectations.expectations.

One of the most important One of the most important ways to avoid provider gap ways to avoid provider gap 2 is to clearly designs 2 is to clearly designs services without services without simplification, simplification, incompleteness, subjectivity incompleteness, subjectivity and bias. To do so, tools are and bias. To do so, tools are needed to ensure that new needed to ensure that new existing services are existing services are developed and improved in developed and improved in as careful a manner as as careful a manner as possible.possible.

Provider gap 2 cont’d

The quality of service The quality of service delivered by customer delivered by customer contact personnel is contact personnel is critically influenced critically influenced by the standards by the standards against which they are against which they are evaluated and evaluated and compensated.compensated.

  

When Service Standards When Service Standards are absent (quality of are absent (quality of service as perceived by service as perceived by customer will is likely to customer will is likely to suffer)suffer)

When Service Standards When Service Standards do reflect (quality of do reflect (quality of service as perceived by service as perceived by customer will is likely to customer will is likely to enhanced)enhanced)

  

Provider gap 2 cont’d

Physical evidence Physical evidence

we mean everything we mean everything from business cards to from business cards to reports, signage, reports, signage, internet presence, internet presence, equipment, and equipment, and facilities used to facilities used to deliver service.deliver service.

Servicescape Servicescape

the physical setting the physical setting where the service is where the service is delivered.delivered.

  

Provider Gap 2: Not Having the right service quality designs standards

Absence of customer-driven standardsAbsence of customer-driven standardsLack of customer-driven service Lack of customer-driven service

standardsstandardsAbsence of Absence of process managementprocess management to focus to focus

on customer requirementson customer requirementsAbsence of formal Absence of formal

processprocess for setting for setting service qualityservice quality

Provider Gap 2: Not Having the right service quality designs standards

Poor service designPoor service designUnsystematic new service development Unsystematic new service development

process process Vague, undefined service designsVague, undefined service designsFailure to connect service design to Failure to connect service design to

service positioningservice positioning

Provider Gap 2: Not Having the right service quality designs standards Inappropriate physical evidence and Inappropriate physical evidence and

servicescapeservicescape

Failure to debelop tangibles in line with Failure to debelop tangibles in line with customer expectationscustomer expectations

Servicescape design that does not meet Servicescape design that does not meet customer and employee needs customer and employee needs

Inadequate maintenance and updating of the Inadequate maintenance and updating of the servicescapeservicescape

Provider Gap 3: Not delivering to service standards Deficiencies in human resource policiesDeficiencies in human resource policies

Ineffective Ineffective recruitmentrecruitmentRole ambiguity and Role ambiguity and role conflictrole conflictPoor employee-technology Poor employee-technology

job fitjob fitInappropriate evaluation Inappropriate evaluation

and compensation and compensation systemssystemsLack of Lack of empowermentempowerment, ,

perceived perceived controlcontrol, and , and teamworkteamwork

Provider Gap 3: Not delivering to service design standards Failure to match supply and demandFailure to match supply and demand

Failure to Failure to smoothsmooth peaks and valleys of peaks and valleys of demanddemand

Inappropriate customer Inappropriate customer mixmixOverreliance on Overreliance on priceprice

to smooth demandto smooth demand

Provider Gap 3: Not delivering to service design standardsCustomers not fulfilling rolesCustomers not fulfilling roles

Customers lacking Customers lacking knowledgeknowledge of their of their roles and responsibilitiesroles and responsibilities

Customers negatively Customers negatively impactingimpacting each each otherother

Provider Gap 3: Not delivering to service design standards Problems with service intermediariesProblems with service intermediaries

Channel conflict over objectives and Channel conflict over objectives and performanceperformance

Channel conflict over costs and rewardsChannel conflict over costs and rewardsDifficulty controlling Difficulty controlling

quality and consistencyquality and consistencyTension between Tension between

empowerment and empowerment and controlcontrol

Provider gap 3 cont’d

Provider gap 3 is the discrepancy between Provider gap 3 is the discrepancy between development of customer driven service standards development of customer driven service standards and actual services performances by company and actual services performances by company employees.employees.

Standards must be backed by appropriate resources Standards must be backed by appropriate resources ( people, system, and technology) and also be ( people, system, and technology) and also be enforced to be effective that is employees must be enforced to be effective that is employees must be measured and compensated on the basis of measured and compensated on the basis of performance along those standards.performance along those standards.

Narrowing gap 3 by ensuring that all the resources Narrowing gap 3 by ensuring that all the resources needed to achieve the standards are in place reduces needed to achieve the standards are in place reduces the customer gap.the customer gap.

Critical Inhibitors closing to Gap3

Employees who do not clearly understand Employees who do not clearly understand the roles they are to play in the company the roles they are to play in the company managementmanagement

Poor employee selectionPoor employee selection

Inadequate technologyInadequate technology

Inappropriate compensation and recognition Inappropriate compensation and recognition

Lack of empowerment of teamworkLack of empowerment of teamwork

Provider gap 3 cont’d

These factors all relate to the These factors all relate to the companies human resource companies human resource function and involve internal function and involve internal practices such as recruitment, practices such as recruitment, training, feedback, job design, training, feedback, job design, motivation, and organizational motivation, and organizational structure to deliver better structure to deliver better service performance, these service performance, these issues must be addressed across issues must be addressed across function ( such as with both function ( such as with both marketing and human marketing and human resources)resources)

Another important variable in Another important variable in provider gap 3 is the customer, provider gap 3 is the customer, even contact employees and even contact employees and intermediaries are 100 percent intermediaries are 100 percent consistent in their service consistent in their service delivery, the uncontrollable delivery, the uncontrollable variables of the customer can variables of the customer can introduce variability in service introduce variability in service delivery. If the customer do not delivery. If the customer do not perform their roles perform their roles appropriately.appropriately.

Provider gap 3 cont’d

Customer can also Customer can also negatively influence the negatively influence the quality of service received quality of service received by others if they are by others if they are disruptive or take more than disruptive or take more than their share of a service their share of a service providers time. providers time. Understanding customer Understanding customer roles and how customer roles and how customer themselves can influence themselves can influence service delivery and service delivery and outcome is critical.outcome is critical.

A third difficulty A third difficulty associated with associated with provider gap 3 involves provider gap 3 involves the challenge in the challenge in delivering service delivering service through such through such intermediaries as intermediaries as retailers, franchisees, retailers, franchisees, agents, and brokers.agents, and brokers.

  

Provider Gap 4: Not matching performance to promises Lack of integrated services marketing Lack of integrated services marketing

communicationscommunicationsTendency to view each external Tendency to view each external

communication as independentcommunication as independentNot including interactive marketing in Not including interactive marketing in

communications plancommunications planAbsence of strong internal Absence of strong internal

marketing programmarketing program

Provider Gap 4: Not matching performance to promises Ineffective management of customer Ineffective management of customer

expectationsexpectationsFailure to manage customer expectations Failure to manage customer expectations

through all forms of through all forms of communicationcommunicationFailure to Failure to educateeducate

customers adequatelycustomers adequately

Provider Gap 4: Not matching performance to promisesOverpromisingOverpromising

Overpromising in Overpromising in advertisingadvertisingOverpromising in Overpromising in personal sellingpersonal sellingOverpromising through physical Overpromising through physical

evidence evidence cuescues

Provider Gap 4: Not matching performance to promises Inadequate horizontal communicationsInadequate horizontal communications

Insufficient communication between Insufficient communication between sales and operationssales and operations

Insufficient communication between Insufficient communication between advertising and operationsadvertising and operations

Differences in Differences in policies policies and proceduresand procedures across across branches or unitsbranches or units

Applications of the Gaps Model   First of all the model clearly determines the First of all the model clearly determines the

two different types of gaps in service two different types of gaps in service marketing, namely the customer gap and the marketing, namely the customer gap and the provider gaps. The latter is considered as provider gaps. The latter is considered as internal gaps within a service firm. This model internal gaps within a service firm. This model really views the services as a structured, really views the services as a structured, integrated model which connects external integrated model which connects external customers to internal services between the customers to internal services between the different functions in a service organization. different functions in a service organization. Important applications of the model are as Important applications of the model are as follows:follows:

The 10 determinants of service

1.       The gaps model of service quality gives 1.       The gaps model of service quality gives insights and propositions regarding customers’ insights and propositions regarding customers’ perceptions of service quality.perceptions of service quality.

2.       Customers always use 10 dimensions to form 2.       Customers always use 10 dimensions to form the expectation and perceptions of service quality the expectation and perceptions of service quality (Fig. 2). (Fig. 2).

3.       The model helps predict, generate and identify 3.       The model helps predict, generate and identify key factors that cause the gap to be unfavourable to key factors that cause the gap to be unfavourable to the service firm in meeting customer expectations.the service firm in meeting customer expectations.