Service is largely intangible and is normally experienced simultaneously with the occurrence of production and consumption. It is the interaction between the buyer and the seller that renders the service to customers (Groonroos, 1988). Kotler & Keller, (2006) defines service as any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
Services refers to “economic activities offered by one party to another, most commonly employing time-based performances to bring about desired results in recipients themselves or in objects or other assets for which purchasers have responsibility” Lovelock and wirtz (2007 p. 15) cited in Nimako and Azumah, (2011). Some scholars however contend that service and services have different meanings (Solomon et al. 1985). Whilst “service” involves the whole organizations performance in providing the customer with a good experience, “services” implies something that can be offered to the customer.
Service Quality Essay Example
Needless to say, “services” definitions are outcome- related or directed at the value created since it is something of value delivered to a performance to meet customers’ needs Nimako & Azumah, (2011). In a typical banking firm, “services” may include specific services like: savings, current and loan account, money transfers, advisory services, electronic and SMS banking etc. Service products associated with technologies can reduce transaction cost, switching rates and encourage customers to create services outcomes on their own (Bitner et al. , 2002).
Services in this era of heightening competition can serve as a competitive advantage when associated with physical goods. The unique characteristics of services present several marketing challenges. This therefore requires that marketers must adopt appropriate strategies to deal with these challenges. Characteristics of Services Services are distinguished from goods as they possess unique characteristics and thus are treated differently from physical goods. Fisk et al (1993) suggest four service characteristics i. e. Intangibility, inseparability, heterogeneity and perishability; Intangibility
Services are activities performed by the provider, unlike physical goods they cannot be seen, tasted or felt, heard or smelt before they are consumed. Services cannot be stored or inventoried. They cannot be patented and readily displayed or communicated as compared to goods. Berry (1980) argues that even though the performance of most services is supported by tangibles, the essence of what is purchased is a performance. Thus, services are experienced when performed. Examples are making or receiving telephone calls, having a haircut and transacting business at a bank.
In order to increase the tangibility of services marketers must emphasize on the benefits of the service rather than just describing the features. Marketers must also develop strong visual symbols and images for their firms. Inseparability Inseparability is taken to reflect the simultaneous delivery and consumption of services. This means that services are typically produced and consumed simultaneously. In the case of physical goods, they are manufactured into products, distributed through multiple channels and consumed later.
The service is a performance, in real time, in which the purchaser cooperates with the provider. Thomas (1978) contends that the degree of this involvement is dependent upon the extent to which the service is people based or equipment based. The implication here is that people based services tend to be less standardized than equipment based services or goods producing services. Company employees must know that they (physically) and their actions (attitudes) go into the perceived service quality of the customer.
Management and employees must be trained (in terms of physical appearance and the right attitude formations) to behave appropriately. Heterogeneity Due to the fact that services are performances, frequently produced by humans, we can effectively conclude that service delivery will definitely vary from one provider to the other. This is a function of human involvement in the delivery and consumption process and reflects a potential for high variations or inconsistency in service delivery.
Ensuring consistency in service quality poses a great challenge to service marketers due to the heterogeneous nature of service. In managing this, automation of routine services should be employed to ensure quality, as standardization is maintained. Firms should also select good and qualified personnel for rendering the service. Perishability Services cannot be inventoried, returned, or resold. Services are ‘time dependent’ and ‘time important’ and this tends to make them highly perishable. The issue of perishability is primarily the concern of the service provider.
Service consumers usually become aware of the perishability of services where there is insufficient supply of a particular service or when they have to wait to consume a particular service. The inability of a service provider to build and maintain stock means that fluctuations in demand cannot be accommodated in the same way as goods. This poses many quality management problems. Hence, service quality level deteriorates during peak hours in banks, restaurants, transportation etc. Marketers should effectively utilize the capacity without deteriorating the quality to meet the demand.
They should also increase personal selling for new clients during slow times. Service marketing mix This refers to the selection and combination of the elements of the extended marketing mix to achieve a given marketing objective. The traditional marketing mix model was primarily directed at seemed useful for physical goods. The extended marketing mix is a marketing toolbox that expands the number of controllable variables from four in the original marketing mix model to seven; Product/Service A product is any combination of goods and services offered to satisfy the needs and wants of consumers.
According to Hinson (2006) a product is the core benefit that consumers derive from the consumption of a particular service or product. The service quality must meet customer’s expectation that is the technical, functional and emotional aspects of the service. Other scholars categorized product into three basic levels; namely the core product, actual product and augmented product. The core product which is the first level represents what the consumer actually buys in terms of benefits. The second level, the actual product consists of the brand name, features, ackaging, parts, and styling whilst the final level, the augmented component includes additional services and benefits that surround the first two levels of the product example a technical assistance in operating the product and service agreements like guarantees. Price Price is defined as the amount of money or price that consumers are willing to pay for a product or service. Prices are determined by several factors including market share, competition, material cost, product identity and customers’ perceived value of the product.
Zeithaml (1998) defines price from a customer’s cognitive conception as something that must be given up or sacrificed to obtain certain kinds of products. Pricing, in the context of banking has additional components (Clemes, 2004). Apart from the fees charged for services rendered, banks also impose interest charges on loans and pay interest on certain types of account. Promotion Promotion is a communication process that takes place between a business and its various publics.
Promotion in a service-oriented company includes the multiplicity of marketing communications tools that can be used by a service company to affect the image and perceptions of their corporate and sub brands in the minds of their service consumers to their corporate benefit. Promotional strategies that can be utilized to project quality of a service include through-the-line advertising, sponsorships, personal selling, and positive word of mouth communication. Place Place refers to having the right product, in the right location, at the right time to be purchased by consumers.
The place element in the service marketing mix refers to how available the service is to the service customer. Place in a service-oriented company includes the extent of accessibility of the service. Service must be made accessible to the service customer at the right place and at the right time without inhibitions to the consumer. This implies that financial service firms must do more beyond brick and mortar to ensure that essential services are provided to consumers. People Due to the simultaneity of production and consumption in services, employees ccupy the key position in influencing customer’s perception of service quality. Hence all people directly or indirectly involved in the consumption of a service are important part of the extended marketing mix. This element includes the dressing of employees, personal appearance, and their attitudes which influence customer’s perception of the service. According to majority of banks executives in Ghana as reported in the 2012 Ghana Banking Survey, “people” element of the banking service delivery will matter most to banks in the battle for the future and will become a necessary impetus for competitive advantage.
Process Process refers to procedures, mechanisms, and the flow of activities by which services are acquired or consumed. Process decisions are essential part of the marketing strategy and radically affect how a service is delivered to customers. The process must be perceived by the customer as being relevant and value-laden. The customer judges the service by the operational flow of the service and actual delivery steps experienced. Some services may however be so complex and hence require the customer to follow complicated steps in order to obtain satisfaction.
Physical evidence This represents the environment in which the service is delivered any tangible goods that facilitate the performance and communication of the service. The ability and environment in which the service is delivered, both in terms of the tangible goods that helps to communicate and perform the service, and the intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers are entailed in physical evidence.
Customers look for clues to the likely quality of a service also by inspecting the tangible evidence. For example, prospective customers of a bank may look to the design of learning materials, the appearance of facilities, staff, etc Definition of Service quality Customers usually evaluate services as they interact with the service provider in a service encounter hence Service quality is defined as the customer’s overall impression of the relative inferiority or superiority and its service provision (Groonroos, 1988; Bitner & Hubbert, 1994).
Asubonteng et al (1996) defined Service quality as the difference between customers’ expectations for service encounter and their perceptions of the service received. Parasuraman et al. , (1985) explained that perceived service quality is the degree and direction of discrepancy between customer service perceptions and expectations. Lewis (1989) suggests that perceived service quality is a consumer judgment which is derived after comparing consumers’ expectations of service with their perceptions of actual service performance.
Kamila et al. , (2000) relates service quality with banking and contend that perceived service quality results from gap between customers expectations of the service provided by the bank and the perception of the actual services provided by the bank. Dimensions of Service Quality Customers judge service quality by certain criteria, according to Kotler et al, (1999), Parasuraman et al, (1988), Evans and Lindsay these criteria determine customers’ perceptions of quality.
The determinants as they proposed include access, credibility, knowledge, reliability, security, competence, courtesy, responsiveness, time, timeliness, empathy, communication, and tangibles. Five key quality dimensions have been identified by Parasuraman et al. (1985). This known as SERVQUAL is a focused evaluation that reflects the customer’s perception of specific dimensions of service, namely; Reliability, Responsiveness, Assurance, Empathy, and Tangibles. Reliability Parasuraman et al (1988) defined reliability as the ability to performed service dependably and accurately.
The ability of a firm to deliver promises is the most vital factor to providing quality services. Customers thus want to do business with firms that keep their promises, particularly their promises about the service outcomes and core service attributes. Responsiveness Parasuraman et al (1988) defined responsiveness as the willingness to help customers and provide prompt service. Customers judge a firm’s responsiveness by assessing the amount of time it takes and the attentiveness that is offered in response to their request, questions, complaints and problems.
Firms thus communicate responsiveness to customers by the length of time they have to wait for assistance, answers to questions or attentions to problems. Responding quickly to request or complaints leads to a higher rating on this dimension. Assurance This refers to the ability of a service firm to inspire trust and confidence in the firm through knowledge, politeness, trust and worthiness of the employees. This dimension refers to the firm’s employees. Are employees skilled workers which are able to gain the trust and confidence of the customers?
The importance of the assurance dimension increases in proportion to the risk and the inability for a customer to evaluate the service. If customers are not comfortable with the employees, there are a rather large chance that the customers will not return to do further business with the company. Empathy The empathy dimension refers to how the company cares and gives individualized attention to their customers, to make the customers feeling extra value and special.
Customers want to be known on an individual basis and feel that the company understands and addresses their individual needs. If the customers feel they get individualized and quality attention there is a very big chance that they will return to the company to do business again. Tangibles Parasuraman et al (1988) defined the tangible dimension as the appearance of a service firm’s facilities, employees, equipments and communication materials. Tangibles is about creating first hand impressions.
Reliability, Responsiveness, Assurance, and Empathy relates to the human element in terms of interactions and intervention in delivery of the service whilst Tangibles correspond to the appearance of physical facilities, equipments, personnel and communication materials. Models of service quality The Gap Model The GAP model developed by Parasuraman et al in 1985 closely relates to SERVQUAL and it compares the gap between the scores from each of the scaled items on each of the five dimensions of expectations with the corresponding 22 items of perceptions. The model presupposes that that service quality is he differences between expectation and performance relating to quality dimensions. These differences are referred to as gaps. The gaps model (figure 2. 1) conceptualises five gaps which are: Gap 1: Difference between consumers’ expectation and management’s perceptions of consumers’ expectations (not identifying what consumers expect); Gap 2: Disparity between management’s perceptions of consumer’s expectations and service quality specifications (inappropriate service-quality standards); Gap 3: variations between service quality specifications and service actually delivered (poor delivery of service quality);
Gap 4: Difference between service delivery and the communications to consumers about service delivery (promises mismatch delivery); Gap 5: Difference between consumer’s expectation and perceived service; this gap depends on size and direction of the four gaps associated with the delivery of service quality on the marketer’s side. Based on this, the SERVQUAL instrument was developed. Measuring Service Quality Most studies in the banking industry have extensively utilized SERVQUAL and SERVPERF models.
The foundation for the SERVQUAL scale is the Gap model proposed by Parasuraman, Zeithaml and Berry (1985, 1988). According to the scale service quality can be measured by identifying the gaps between customers’ expectations and actual performance of the service. Parasuraman, Zeithaml and Berry (1998) held that when perceived or experienced service is less than expected service it implies less than satisfactory service quality. However, when perceived service is less than expected, the obvious inference is that service quality is more than satisfactory.
This model therefore provides detailed information about customer perceptions of service i. e. customer’s benchmark, performance levels as perceived by customers, customer comments and suggestions as well as impressions from employees with respect to customer expectations. Although the SERVQUAL model has been used extensively over the years, it has received various criticisms. Cronin and Taylor (1992) were among the researchers who criticized the SERVQUAL scale of measurement. In questioning the conceptual base of the model, they contend that the scale is confusing with customer satisfaction.
Furthermore, they posited that the Expectation (E) component of SERVQUAL be discarded and instead Performance (P) component alone be used. Cronin and Taylor (1992) further suggest that measuring perceptions alone might provide a better indicator of service quality than measuring the difference between expectations and perceptions. On the operational perspective, Buttle (1995) finds the difficulty in conceptualizing expectations, the limited number of items in each dimension, the problems related to the double administration of the instrument which fuels customer confusion and boredom are key challenges associated with SERVQUAL.
This led to the proposal of the SERVPERF model. Cronin and Taylor (1992) empirically supported their argument through a study across four industries including, banks, pest control, dry cleaning and fast food. The five SERVQUAL dimensions identified by Parasuraman et al. (1985, 1988, and 1991) have been widely used in assessing banking service quality; Levesque & McDougall (1996) utiliesd a series of service quality items based on SERVQUAL measurement in finding the determinants of customer satisfaction from the bank customer’s perspective.
Avkiran (1994) selected four dimensions based on the SERVQUAL model to examine service quality in the Australia retail banking industry. The four dimensions include staff conduct, credibility, communication, and access to teller services. Aldlaigan & Buttle (2002) proposed four dimensions based on Gronroos (1984) service quality framework to measure customer service quality perceptions in the retail banking industry. These dimensions are: service system quality, behavioural service quality, service transactional accuracy, and machine service quality.
Ennew and Bink (1996) study bank customers in the United Kingdom and develop three banking service quality dimensions. These are knowledge, advice offered, personalisation in the service delivery, and general product characteristics. With the popularity of internet banking services, Jun &Cai (2001) summarise internet banking service quality from three perspectives: banking service product quality, customer service quality, and online systems quality.