Part one: Service Quality in the eyes of the customer Service quality models and service quality criteria 7. 5.2012 1

What is service? IHIP model (Gummesson and Lovelock 2003) Inseparability Heterogenity Intangibility Perishability Every business is service business (Grönroos 2007) Customers are interested in service offernings, the core of a service offering can be intangible service or a tangible product (service offering = core service (or product), enabling services, enhancing services) Tangible products can be servicized 2

What is quality? Defined in goods marketing like “zero defects – doing it right the first time Service quality is more difficult to evaluate than goods quality “Service quality is the customer’s overall impression of the relative superiority of the organization and its services” (Bitner and Hubbert 1994) 3

Your ideas about service and quality “To create more value than the competitors to attract as more consumers as possible” “Service is an intangible product offered by businesses to satisfy customes’ needs. It can only provide service (like banks, hospitals, counseling agencies…) or both (like restaurant, fashion houses…) “Customer perception of value, indeed I think that customers’ satisfaction is the main objective of quality.

Why to study service quality? Perceived service quality and satisfaction are positively related to customer retention and buying behavior Service providers and sellers need to create measures that capture the customer’s subjective evaluation of the service and in understanding how service quality is formed => service quality is a well-studied concept 5

Who is the customer (that perceives the service)? B2C B2B B2B2C C2C Surrogate customers Internal customers 6

B2B2C2BC2C… -Gummesson (2008) B B C C Co-creation of value through value propostions and value actualization B2C C2B C C C2C 7

Different customers have different service quality expectations Different customers have different service quality expectations. Therefore, the service providers have to balance between the different customers and their different service quality expectations 8

SERVQUAL-Model (Parasuraman, Zeithaml, Berry 1985) Tangibles (appearance of physical facilities, equipment, personnel and communication materials) Reliability (ability to perform the promised service dependably and accurately) Responsiveness (willingness to help customers and provide prompt service) Assurance (knowledge and courtesy of employees and their ability to inspire trust and confidence) Empathy ( the caring, individualized attention that the firm provides its customers) 9

Service Quality Model (Grönroos 1984) Expexted service Perceived service Perceived service quality Traditional marketing activities -advertising, PR, Pricing, branding, word-of-mouth etc Image Functional quality How? Technical quality What?

Service Quality Customer Perceived Service Quality Service Outcome (=Technical Quality) A customer gets what s/he wants and values Service Process (=Functional Quality) How does the customer get what s/he wants and values 11 11

Service Quality Criteria (Gronroos 2007, p. 90) Professionalism and Skills Customers realize that the service provider, its employees, operational systems, and physical resources have the knowledge and skills required to solve their problems in a professional way (outcome-related criteria). Attitudes and behavior Customers feel that the service employees (contact persons) are concerned about them and interested in solving their problems in a friendly and spontaneous way (process-related criteria). Accessibility and Flexibility Customers feel that the service provider, its location, opening hours, employees, and operational systems are designed and operate so that it is easy to get access to the service and are prepared to adjust to the demands and wishes of the customer in a flexible way (process-related criteria) Reliability and Trustworthiness Customers know that whatever takes place or has been agreed upon, they can rely on the service provider, its employees and systems, to keep promises and peform with the best interest of the customers at heart (process-related criteria) Service recovery Customers realize that whatever something goes wrong or something unpredictable happens the service provider will immediately and actively take action to keep them in control of the situation and find a new, acceptable solution (process-related quality) Servicescape Customers feel that the physical surrounding and other aspects of the environment of the service encounter support a positive experience of the service process (process-related criteria) Reputation and Credibility Customers believe that the sesrvice provider’s business can be trusted and gives adequate value for money, and that it stands for good performance and values which can be shared by customers and the service provider (image-related criteria)

Other findings about service quality The other customers can enhance or detract perceived service quality (cf. Group service experiences) Customers are more satisfied with the service the more there is self-service The value of service quality criteria varies according to the service Customers become more critical towards the service quality in the long term relationships Etc... 13

Final essay Write an essay on the topic “Managing Service Quality”; you may self decide the subtitle of the essay (the focus of your essay) The essay should be about 12 pages, about one page on each lecture (topic) You are allowed to write an essay with a fellow student (two students for an essay) Use the lectures and articles but write also about your own experiences and thoughts about the topic (refer to the articles in an appropriate manner) Outlay of the essay: Cover page (title, your name, name of the course, name of the course tutor, name of the university, date) Index Use chapters and name the chapters (Tables and figures) List of references at the end of the essay You can get supervision with the essay writing in week 21.-25.5. Dead line for the essay 30.5.2012 to my e-mail: ritva.hoykinpuro@uta.fi 14

Your task for the next lessons Recall a service experience that has somehow been meaningful for you (in a positive or in a negative way) Write a one page story about the experience A story has: An orientation (when, where it happened and who were present etc.) Incidents in a chronological order ( a beginning, a middle and an ending) A conclusion and consequencies and sometimes even a moral lesson Return the your story by 10.5. to my e-mail:ritva.hoykinpuro@uta.fi

Thank you for your attention See you on Thursday 