SERVICE QUALITY

GAP MANAGEMENT

Module Id:MTMGTSQG01
 Service Quality

Service Quality:-
Competitive edge =f (Price, N/W quality, customer service
quality).
Satisfaction=f (Expectation and perceived service delivery)

PD<E=Dissatisfaction
PD=E =Satisfaction
PD>E=Delight
PD>>E=Wow
 Competitive strategies

In this scenario, there are 4 generic competitive strategies , a

firm can adopt.
*Cost leadership

*Product/service innovation

*Product/Infrastructure quality

*Customer service quality

 Service Quality

-Quality of a service as perceived by customers has two

dimensions
i. A Technical or outcome Dimension ie What the customers
get (Technical Quality)
ii.A Functional or Process related Dimensions ie How the
process and service encounter are Perceived (Functional
Quality)
-As long as the outcome or technical quality is acceptable, the
process dimension or functional quality becomes critical to
overall quality perception.
 Service Quality

-In Telecom service, the technical quality (Outcome) is

difficult to judge (credence quality); so the quality
perception is based to a large extent on Functional
quality (how we handle customers)
-Image of MTNL among consumers has a major
impact in influencing the customers perception and it
works as a filter
-If the Image of MTNL is good in the minds of the
customer, minor mistakes or errors are likely to be
overlooked.
-If the image is negative, the impact of mistake is likely
to be greater than it otherwise would be.
-Total perceived quality is determined by the level of
gaps between the expected and experienced
 Service Quality

Total Experienced
Expected Perceived
WOM Quality
Quality quality

Customer Corporate Corporate Image

needs Image of MTNL

Technical Functional
Quality Quality
 GAP model

GAP model of service quality:-

Customer Gap is the difference between customer
perception and expectations

-Customer perceptions are subjective assessments of actual

service experiences.

-Customer expectations are the standards or reference

points for performance against which service experiences
are compared in terms of what a customer believes should
or will happen.
 GAP model
Sources of customer expectations consist of
*Market controlled factors (Pricing, Advt, sales , promises)
*Factors that the marketer has limited ability to affect (innate
personal needs, word of mouth communications,
competitive offerings)
In a perfect world, expectations and perceptions would be
identical ie, customers would perceive that they receive
what they thought would or should.
-In practice they are often separated by some distance
-Goal of services marketing is to bridge the distance.
 Customer Gap

Customer Gap:- Expected service

G
A
P
Perceived service
Process of closing the customer gap involves 4 “Company
gaps” ie discrepancies within the organization hindering the
delivery of quality of service.
 Provider Gap

Provider gap 1:- Not knowing what customer expects

Provider gap 2:- Not selecting the right service designs and
standards

Provider gap 3:- Not delivering to service standards

Provider gap 4:- Not matching performance to promises.

 Knowledge Gap

Provider gap 1:-

-Not knowing what the customer expects is one of the root
causes of not delivering to customer expectations
-Provider gap 1 is the difference between customer
expectations of service and company understanding of
those expectations.
-Company:- Refers to anyone in the organization who has
the responsibility and authority to create or change
service policies ,procedures and standards. (Top
executives, Middle managers, supervisors, empowered
teams)
 Knowledge Gap
Why does this first provider gap occurs:-
-Reasons can be
*No direct interaction with the customers
*Unwilling to ask about expectations
*Unprepared ness in addressing them
*Improper priorities and sub optimal resource allocation in
respect of understanding customer’s expectations.
-An inaccurate understanding of what customers expect and
what really matters to them leads to service performance
that falls short of customer expectations
 Knowledge Gap

Factors responsible for gap 1:-

-Inadequate MR orientation
*Insufficient MR
*MR not focused on service quality
*Inadequate use of MR
-Lack of upward communication.
*Lack of interaction between management and customers
*Insufficient communication between contact employees and
managers
*Too many layers between contact personnel and top management
-Insufficient relationship focus
*Lack of market segmentation
*Focus on transaction rather than relationship
*Focus on new customers rather than relationship customers
Necessary Steps:-
-To acquire accurate information about customers expectation
by MR
-Staying close to the customer by customer visits, survey
research, complaint systems and customer panels.
-Innovative techniques like quality function deployment,
structured brainstorming, service quality gap analysis.
-Market segmentation
-Niche Marketing ie ., Targeting segments of customers and
developing services and strategies that fit their needs better
than other companies offerings.
-Managing customer mix and STP.
-Relationship Marketing ie., to retain customers and strengthen
relationship with them. It also includes strengthening the
bond with existing customers.
 Standard Gap

Provider gap 2:- Not selecting the right service design

standards
-Another pre requisite for delivering superior quality service is the
presence of service designs and performance standards that
reflect those accurate perceptions.
-The difficulty executives, managers and other policy-setters
experience in service firms in translating their understanding of
customers expectations into service quality specifications.
Gap 2 is the difference between company understanding of
customer expectations and development of customer driven
service designs and standards.
-Customer driven standards are different from the conventional
performance standards (company driven standards) service
firms establish.
-Customer driven standards are based on customer requirements
that are visible to and measured by customers.
 Standard Gap
Factors leading to provider gap 2:-

1.Absence of customer driven standards

*Lack of customer driven service standards
*Absence of process management to focus on customer
requirements
*Absence of formal process for setting service quality goals.

2.Inadequate service leadership

*Perception of infeasibility
*Inadequate management commitment
3.Poor service designs
*Unsystematic new service development process
*Vague, undefined service designs
*Failure to connect service designs to service positioning
 Standard Gap
Reason for gap 2:-
-Those responsible for setting standards, management sometimes believe
that customer expectations are unreasonable or unrealistic.
-They believe that the degree of variability inherent in service defies
standardization and therefore setting standards will not achieve the
desired goals.
-They contend that the demand for service is too hard to predict or that the
way the companies and its personnel operate cannot be changed.
-Generally reasons for this gap is (awareness of customer expectation Vs
translation of that awareness into appropriate service designs and
standards) the absence of wholehearted company commitment to
service quality.
-Pressure of short term financial deadlines results in reluctance to
pursue/continue customer satisfaction or quality efforts.
-It needs patience and perseverance to stay with it.
 Standard Gap

Necessary steps:-
-The quality of service delivered by customer contact
personnel is critically influenced by the standards
against which are evaluated and compensated.
-Standards signal or send the message to contact
personnel what the priorities are and which types of
performance count.
-When standards reflect what customers expect, the
quality of service they receive is likely to be enhanced.
-By demonstrating strong leadership commitment and by
setting customer-defined performance standards, gap
2 can closed
-Leadership plays a pivotal role in providing service
excellence.
-Management must perceive that customer expectations
 Delivery Gap
Provider gap 3:- Not delivering to service standards
-Provider gap 3 is the discrepancy between development of customer
driven service standardization and actual service performance by
company employees.
-Even when guidelines exist for performing service well and treating
customers correctly, high-quality service performance is not a certainty.
-Standards must be backed by appropriate resources (People, systems,
technology) and also must be supported to be effective- i.e. employees
must be measured and compensated on the basis of performance
along those standards.
-When the level of service delivery performance falls short of the standards
(Provider gap 3), it falls short of what customers expect as well.
Factors leading to the provider gap 3:-
1.Deficiencies in the policies
*Ineffective recruitment
*Role ambiguity & role conflict
*Poor employee technology job fit
*Inappropriate evaluation and compensation systems.
*Lack of empowerment, perceived control and teamwork
2.Failure to match supply and demand.
*Failure to smooth peak and valleys of demand
*Inappropriate customer mix
*Over reliance on price to smooth the demand.

3.Customers not fulfilling roles

*Customers lacking knowledge of their roles and
responsibilities.
*Customers negatively impacting each other
Reason for gap 3:-
-Failure to ensure that all the resources needed to achieve the
standards are in place.
-Employees who do not clearly understand the role they are to
play in the company
-Employees who feel in conflicts between customers and
company management.
-The wrong employees
-The inadequate technology
Inappropriate compensation and recognition
-Lack of empowerment and team work.
-These factors all relate to the company’s HR function
involving internal practices i.e.
recruitment, training, job design, motivation, and
organisational structure
Necessary steps to close the gap 3:-
-The issues must be addressed across functions (HR and
Marketing) if they are to be effective.
-Company must practice internal customer concept. Front-
end contact persons depend on the other functions to
perform effectively so that in turn they can perform for the
external customers.
-Unless the company acknowledges the importance of
internal customers, these internal intermediaries may have
different goals, incentives and motives than the department
developing the service.
-Challenge in delivering the service through intermediaries as retailers,
franchisees, agents and brokers., since they may have goals and
values that do not align with those of service organization.
So the firm must develop ways to either control or motivate the
intermediaries to meet the company goals.
-Customer also introduces heterogeneity in service delivery. If the
customers do not perform their roles appropriately, i.e. if they fail to
provide all the information necessary to the provider or neglect to read
and follow instructions-service quality is jeopardized
-Service organization develops strategies to teach customers to perform
their roles appropriately.
-By synchronizing demand and capacity avoiding the situations of over
demand or under demand.
-Marketing strategies for managing the demand such as price changes,
advertising, promotion, and alternative service offerings can supplement
approaches for managing supply.
 Communication Gap

Provider gap 4:- Not matching performance to

promise
4th gap:- 4th gap is the difference between service
delivery and service providers external
communications.
-Promises made through its media advertisements
sales force, and other communications may
potentially raise customer expectations that serve as
the standard against which customers assess service
quality.
-Therefore the discrepancy between actual and
promised service broadens the customer gap.

-Broken promises may occur for many reasons; over

Key factors leading to gap 4:-
-Ineffective management of customer expectations
*Failure to manage customer expectation through all forms of
communication.
*Failure to educate customers adequately.
*Over promising-in advertisement, in personal selling, through
physical evidence cues.
*Inadequate horizontal communications-Insufficient
communication between sales and operation, insufficient
communication between advertising and operations,
differences in policies and procedures across branches or
units.
Steps to close gap 4:-
-Customer service perceptions can be enhanced if the company educates
them to be better users of the service.
-Customers who are aware that a company is taking concrete steps to
serve their best interest are likely to perceive a delivered service in a
more favorable way.
-Discrepancies between service delivery and external communication
about it adversely affect customer’s assessments of service quality.
-Gap 4 reflects a breakdown in coordination between employees
responsible for delivering the service and employees in charge of
describing/ promoting the service to customers.
-Effectively coordinating actual service delivery with external
communications, therefore narrows provider gap 4 and favorable affect
customer gap as well.
Gap Model of Service Quality
Relationship between service quality improvement and
Profitability:-
*Good service quality results in customer satisfaction
*Excellent service quality results in customer delight
*It improves ability of MTNL to attract new customers
*It improves the ability of MTNL to retain the existing customers
who feel satisfied with MTNL and became repeat customers.
*This would help MTNL to get greater Revenues and profit.
*In the Long run, the most important single factor affecting
MTNL’s performance is the quality of its product and services
offered by its employees relative to those of our competitors.

*Quality leads to both MARKET EXPANSION and gains in

MARKET SHARE
The End

Thank
You