2.3 THE SERVICE DELIVERY SYSTEM
2.4.1 Determinants of Service Quality
According to Parasuraman et al (1985) the following ten dimensions determine service quality.
Tangibles:
Tan.gibles include the physical evidence of service such as appearance of physical facilities, eqmpment, personnel, printed and visual materials.
Reliability:
Reliability relates to the consistency of performance and dependability.Itmeans that the firm honours it promises and performs the service right the first time. Essentially it is the ability to perform promised service dependably and accurately.
Responsiveness:
Responsiveness relates to the willingness to help customers to provide prompt service.It focuses on the timeliness of service.
Competence:
Competence means the possession of required skill and knowledge to perform the service.
Itincludes knowledge and skill of contact, operational and support personnel as well as the firm's research capability.
Courtesy:
Courtesy involves politeness, respect, consideration and friendliness of contact personnel.It includes consideration for consumer's property and neat and clean appearance of public contact personnel.
iCredibility:
Credibility involves trustworthiness, believability, and honesty of the service provider.It entails having the customer's best interests at heart. Company name, company reputation and personal characteristics of contact personnel contribute to credibility.
Security:
Security is freedom from danger, risk, or doubt and involves physical safety, financial security and confidentiality.
Access:
Access involves approachability and ease of contact.Itmeans that the service is easily accessible by telephone, limited waiting time to receive service, convenient location of service facility and convenient hours of operation.
Communication:
Communication means listening to customers and acknowledging their comments; keeping customers informed in a language they can understand and listening to them. Itinvolves explaining the service, explaining how much the service will cost, explaining the trade-offs between service and cost and assuring the consumer that a problem will be addressed.
2.4.2 Customer Perceptions of Service Quality
Several factors influence the customer's perception of the quality of service offered. These factors are as follows:
• Service Quality Dimensions
Zeithaml and Bitner (2000) contend that research suggests that customers do not perceive quality as a uni-dimensional concept i.e. customers' assessments of quality include the perceptions of multiple factors. Ithas been suggested that eight dimensions of quality be applied to all goods and
services viz. performance, features, reliability, conformance, durability, serviceability, aesthetics and perceived quality. These dimensions represent how customers organize information about service quality within their minds.
• Reliability
This is the ability to perform the required service dependably and accurately and this seems tobe the most critical of the dimensions. Reliability refers to the ability of the organization to deliver on its promises.
• Promises
This refers to the willingness of the service provider to help the customer and to provide prompt and efficient service. Customers do not like to wait to receive assistance for a lengthy period.
• Assurance
This refers to the employee's knowledge and courtesy and the ability of the fIrm and it's employees to inspire trust and confIdence. Customers need to have the assurance that they are in good hands and that their interests are going to be served well.
• Empathy
This refers to the ability to get into the customer's shoes and see things from their point of view.
This relates to the ability of a fIrm to understand the customer's perspective, and give them a good, personalized service. Good account management can take care of this side of the service game.
• Tangibles
These refer to the appearance of the physical facilities, equipment, personnel and communication materials. These are the physical representations or images of the services that customers, particularly new customers, will use to evaluate quality. Tangibles are often used by service
companies to enhance their image, provide continuity and signal quality to customers. Therefore in order to understand customers' perceptions, it is important to conduct market research. In today's fIercely competitive business environment, customer loyalty is a key success factor. In many industries it is practically impossible to make a difference with the quality and type of product or service offering. Some businesses have become commoditized and once that happens, it is easy to get caught up in the downward spiral of perpetual discounting and fIghting for a larger share of the market. Differentiating of product is rarely possible while differentiating on price alone can spell disaster, unless the company is huge and can command powerful economies of scale (Royer and
MacInnis, 2001). It is therefore important to always feel the pulse of customers in order to know what they expect and meet their needs and expectations.
In 1986, Jan Carlzon, the former president of Scandinavian Airlines wrote a book, "Moments of Truth". In this book, Carlzon defines the moments of truth in business as "anytime that a customer comes into contact with any aspect of a business, however remote, is an opportunity to form an impression". The moments of truth need to be managed well, as they contribute significantly to the
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building of long- term customer loyalty and total customer satisfaction.
2.4.3 Management commitment to Service Quality
This refers to the extent to which management views service quality as a strategic goal. The following issues are important considerations (Rapert and Wren, 1998).
• Do internal programs exist for improving the quality of service to customers?
• Does the company emphasize its sales goals as much as or more than it emphasizes serving customers?
• Are managers who improve the quality of service to customers more likely to be rewarded than other managers?
• Are resources committed to departments to improve service quality?
• Are all levels of management committed to providing quality service to its customers?
The absence of total management commitment merely widens the gap. Focus on other company performance objectives such as short-term profit and cost reduction, may receive greater emphasis than service quality. Management commitment to service quality is essential in ensuring customer satisfaction.
2.4.4 Benefits of Service Quality
Some of the major benefits of delivering service quality are:
• Customer retention - this means "repeat business."
• Referrals - satisfied customers are happy to generate positive word-of-mouth.
• Avoidance of "price" competition - if customers see your organization as the same as others, then your service is essentially undifferentiated or like a commodity. Differentiation is a strategy upon which to effectively compete. Price strategy is another way to compete, however
this may not always be possible or desirable. Attaining service quality allows competition based on a differentiation strategy.
• Retention of good employees - employees like to work for a "quality" organization.
• Reduction of costs - when quality is achieved, costs of correcting problems (after they have occurred) is reduced. Since a focus on quality stresses preventative maintenance, then these costs are reduced. In addition, many other costs are reduced such as lowing employee turnover and the cost of having to motivate uninspired employees (Kotler, Bowen, and Makens, 1996:
362 - 364).
Services are unique in the sense that they are intangible and, thus, customers must trust the organization before they purchase. With services, quality and perception of quality is essential.
Apart from the benefits mentioned above service quality enables the organization to compete with a "differentiation" strategy against competitors.