1 Service Quality Toronto Dominion

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan2 An Illustration

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan3 Federal Express How do you create dissatisfaction? Consider Fedex –calls abandonment (1) –pick-up miss package (10) –transport and delivery lost (10), damaged (10), etc. –invoice adjustment (1) –customer service complaint reopened (5)

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan4 Federal Express (contd.) Calls Pick- up Transport & Delivery Abandoned calls (1) Missed pick-up (10) Lost (10) Damaged (10) Wrong late (5) Overgoods (lost & found) (5) Right day late (1) Missing proof of delivery (1) International (composite index) Adjustment (1)Complaint reopened (5) Traces (not answered) (1)

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan5 Operational Efficiency and Customer Satisfaction

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan6 Service Quality –expectation (expected service) –performance (perceived service) SERVQUAL –Dimensions: Tangibles, Reliability, Responsiveness, Assurance, and, Empathy.

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan7 A Conceptual Model of Service Quality

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan8 Consumer Expectations Revisited Almost all the SERVQUAL type instruments focus on consumer’s making a point estimate of quality, satisfaction, etc., What if –consumer has a prior distribution about the average quality of a brand? –consumer care not just about the outcome (on average), but also about the distribution of possible outcomes? –consumer updates beliefs over time? Implications –It is not necessary to exceed expectations (reducing variance in quality alone can raise future preference) –If customer expects bad quality and receives it, he/she will not reduce preference for that brand (matching expectations reduces risk!) –Given two equally priced options, customers will not necessarily choose the one with the higher expected quality

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan9 Commerce Bank: Service Quality Does Not Mean Automation

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan10 Service Quality & Organizational Performance An Application of Service Quality Methodology –Gerrad & Cunningham, “Bank Service Quality: A Comparison between a Publicly Quoted and Govt. Bank in Singapore,” Journal of Financial Services Marketing, Oliva & Sterman, “Cutting Corners and Working Overtime,” Management Science, –Characteristics of service = inseparability, intangibility and labor intensity –Rising Financial Pressures on Performance implies Focus on Driving Productivity –Consequence = Employees Drop Time Spent on Consumers at Expense of Service Quality –Result = Rework, Reduced Loyalty, High Turnover –Data: NatWest Bank, U.K.