PRODUCT/SERVICES AND QUALITY
P2, S3, T1
Products and Services that meet or exceed customer expectations result in customer satisfaction. Quality is the expected product/service being realized. Before a customer makes a purchase (exchanges money for a product/service) he or she does a mental calculation: “Is the worth of the product/service (as I perceive and expect) equal to the money that I am about to exchange?”
Products/services that are produced and manufactured to specifications that are appropriate to the price (money to be given in exchange by the customer) of the product/service is an operational or manufacturing view of quality. Here, the customer receives the value that he or she expects since operations has built quality standards into the product. An operations view of quality is a common view of the concept of quality.
However, quality is a function of how the customer views the product/service that he or she receives. The customer view always compares what they expect with what they actually receive regardless of how operations conceives quality. How do customers arrive at their expectations?
Marketing, especially sales, has a major effect on how the customer views quality. As mentioned earlier, customer satisfaction is based on receiving the actual product/service as expected. When marketing and sales enthusiastically promises a product/service that manufacturing or operations (in the case of a hospitality service) cannot deliver, then expectations are not met, the customer is dissatisfied, and quality (in the customers’ eyes) is not realized.
Quality is not an absolute to be determined by operations or manufacturing. Variables that affect quality are: (a) customer expectations (obtained from marketing and sales, as well as word of mouth and previous experience), (b) actual product/service received (how a service is performed by operational people and actual tangibles received (cold food for example). The following models explain these basic concepts.
What is Quality?
There are two perspectives and lenses through which to view quality: Tangible Product Orientation and Intangible Service Delivery Orientation. Both are necessary, however, the latter is the most important since most tangible hospitality products are becoming
Tangible Product Orientation. Here focus is on the product itself but from another two perspectives (Kotler, Bowen, and Makens, 1996):
1. Product/Service Features. The product/service is seen as a set of features that enhance customer satisfaction. While this may or may not be a customer focus (depending if the customer truly asked what product enhancements they wanted), in reality adding additional features in a hope that they will create customer satisfaction is the approach. This approach adds to the cost of the product. Justification for these added features must be paid for by additional customer expenditure or the organization gaining a pay-off due to increased customer loyalty.
Company image, word-of-mouth, and marketing/sales (promotion and price-levels) form customer expectations. A hotel guest staying at the Ritz and paying $300 per night will have very different expectations than a hotel guest of Motel 6 paying $45 per night. Thus, both the guest at Motel 6 and the guest at the Ritz may conclude after their stay that they received quality rooms. Why can both Motel 6 and Ritz deliver a quality room? Because the room at the Ritz and Motel 6 are not compared against one another. The in each case, the customers’ expectations were met by the room received for the price (which is one variable that signals expectations) that they paid.
Product features quality relates to customer expectations.
2. Freedom from Deficiencies. In the example above, the rooms at both the Ritz and Motel 6 must be clean and the beds made-up daily. NOTE: Is there a price level below which even these deficiencies ARE acceptable, for example, a low-end and run-down motel?
Seriously, products must work. At a basic level, they must operate as they are supposed to or the customer will determine that the quality is inadequate.
Intangible Service Delivery Orientation. Here the focus is on the process of delivering the service. This involves two basic components: (a) Technical quality – the means of service delivery and (b) Functional quality – the how of service delivery.
1. Technical Quality. This includes the systems and infrastructure designed and created to organize delivery of the service. For example: computerized systems, machines technical solutions, and know-how.
2. Functional Quality. The hospitality customer goes through many interactions with employees in the creation and delivery of a hospitality experience. A successful meeting is the result of all functional areas of a hotel being synchronized and focused on creating a beautiful symphony. Technical quality must be in place to facilitate such coordination and allow the employees to work together. Functional quality includes employee: attitudes, behavior, service mindedness, appearance, accessibility internal relations and customer contacts.
Models help us understand the complexity of service quality. First, we will discuss an early foundational model: The Perceived Service Quality Model developed by Christian Gronroos in 1982. Second, we will discuss an evolutionary form of the Gronroos model, the Gap Analysis Model developed by V. A. Zeithaml, A. Parasuraman, and L. L. Berry in 1988. This last model, currently packaged as the SERVQUAL Model, is widely used in the hospitality industry to understand and improve the quality of hospitality service.
Perceived Service Quality Model (Figure 1)
In 1982, Christian Gronroos, of the Swedish School of Economic, Helsinki, Finland, introduced The Perceived Service Quality Model (see Figure 1). According to Gronroos, service quality studies and subsequent model development has from the beginning beenbased on what customers perceive as quality. In other words, service quality is an outgrowth of the marketing concept; focus on the customer. What is important is what is perceived as quality by the customer and not what designers or operations people feel is good or bad quality.
Customer buying behavior theories have strongly influenced many service quality models. The notion that the customer’s post-purchase perception is a function of his or her pre-purchase expectations is the foundation of the confirmation/disconfirmation concept of service quality. The confirmation/disconfirmation concept is the foundation concept of both Gronroos’ 1982, Perceived Service Quality Model and the well-known (1988) Gap Analysis and SERVQUAL models by V. A. Zeithaml, A. Parasuraman, and L. L. Berry (Gronroos, 1991).
According to the Perceived Service Quality model (Figure 1), the quality of a service, as perceived by the customer, is the result of a comparison between the expectations of the customer and his or her real-life experiences. If the “experienced quality” exceeds “expected quality,” the “total perceived quality” is positive. If expectations are not met by performance or the actual experience, the perceived quality is low. There are multiple customers in an internship program: students, internship suppliers, and sponsoring entities, for example. Final success is dependent on initial expectations compared to actual performance.
The Perceived Service Quality Model
Source: Gronroos, C. (1991). “Quality Comes to Service,” in The Service Quality Handbook.
The Five-Gap Model of Service Quality (Figure 2)
Another widely used model of service quality is known as the five gap model (Kotler, Bowen, and Makens, 1996, pp. 357 - 361). Knowing what coustomers expect is the first and possibly the most critical step in delivering service quality. Thus, the marketing/ organization must know what customers expect to be able to provide services that customers perceive as excellent. This an extension of the marketing concept and consultative selling approach that: (a) first, learns through thorough questioning (read extensive market research) what the customer needs and wants (customer’s problem that they want to be solved) and (b) second, delivering the product/service benefits that will solve the problem (satisfy the needs/wants).
The Gap Analysis Model of Service Quality
Source: Adapted from Kotler, P, Bowen, J and Makens, J. (1996). Marketing for Hospitality and Tourism. Upper Saddle River, NJ: Prentice Hall, p. 358.
Gap 1: Consumer Expectations vs. Management Perceptions
Often hospitality managers fail to understand what customers expect in the offered product/service. And, this includes understanding which features (of the product) are necessary to deliver high-quality service. Gap 1 occurs when this breakdown of understanding occurs. For example, a manager might develop a system to ensure that all guests wait no longer than 15 minutes to check in. If the hotel guest gets upset after a 10 minute wait, then Gap 1 exists.
Often, hospitality firms initially survey customers to understand their expectations. However, over time these customer expectations change (change is constantly happening). If the product/service does not adapt to these changes, then Gap 1 widens.
Ongoing research is essential to stay apprised of the changing customer expectations. Formal research plus informal research (managers walking around and talking to hospitality guests, for example) is one source of information. The salesforce, especially, for complex group business, is a vital source of changing customer expectations.
Gap 2: Management Perception vs. Service Quality Specifications
When hospitality managers know what customers expect, BUT cannot or will not develop products/services and systems to deliver it, then Gap 2 occurs. Several reasons for Gap 2 are:
1. Inadequate commitment to service quality,
2. Lack of perception of the feasibility of addressing customer expectations
3. Inadequate task standardization (within the hospitality organization)
4. Absence of goal-setting by management and inability to get employee “buy-in.”
The hospitality industry has been accused of being short-term oriented. Short-term profits and unwillingness to invest in human resources and technological tools and equipment almost always causes service quality delivery problems.
Gap 3: Service Quality Specifications vs. Service Delivery
When hospitality managers know what customers expect AND have developed products/services, systems, and specifications to deliver it BUT employees are unable or unwilling to deliver the service, then Gap 3 occurs. Several reasons for Gap 3 are:
1. Employees are not given the tools and working conditions to do the job.
2. Employees are not correctly selected, trained, and motivated.
3. Employees are not properly “led” by managers (Are managers really “leaders?”)
Gap 4: Service Delivery vs. External Communications
When hospitality management (represented by marketing and sales executives) promises more in its external communications than it can deliver (operations) then Gap 4 occurs. External communications includes, but is not limited to, advertising, public relations, pricing messages, and personal selling.
Hospitality marketers must ensure that operations can deliver what marketing (external communications) promises. General managers must fully understand the marketing/selling process as well as operational processes. Why? Because it is obvious that the two areas must “seamlessly” work together to meet customer expectations.
Gap 5: Expected Service vs. Perceived Service
Gap 5 is where the “rubber-meets-the-road.” The size of Gap 5 is dependent on all of the other gaps.
1. Expected Service is what the customer expects to receive from the hospitality organization.
2. Perceived Service is what the customer believes or perceives that he or she has actually received from the hospitality organization (after the service experience).
3. Gap 5 is the Difference between the above. Customer satisfaction and quality is dependent upon this gap being reduced or eliminated. Hospitality management is responsible for managing the absence or presence of this gap.
Summary of Models.
The two above quality models significantly affect the service industry. These models offer ways for management to think about the way that they manage service quality. Instead of the ineffective bandages of exhortations to employees to “smile,” managers have these models to guide real structural changes that, if implemented, will be both effective and efficient.
Benefits of Service Quality
The hospitality industry has a reputation for being short-term oriented. Often, in this fast moving industry, there is a large amount of “fire-fighting” that occurs. When problems arise seem to completely surround the hospitality manager, survival is key. Thus, simply handling the problem and moving to next is the pattern of activity. Long-term planning and serious thought seems to be often overlooked.
Ancient wisdom continuously reminds the human being that, “if you don’t know where you are going, any road will take you there” (said the Cheshire Cat to Alice in Through the Looking-glass by Lewis Carroll written in the 1800s). The same can be said for effective planning and implementation by circumspect hospitality leadership. The hospitality industry offers products and services that are often “me-toos” and similar to undifferentiated commodities such as salt or gasoline. Anybody can spend the money to build a beautiful hotel, but not everybody can produce superior service quality. And, meeting customers’ expectations, as we have seen above, translates into service quality.
Those hospitality organizations that deliver service quality escape the “commoditization” of the hospitality industry: they “stand-out” from their competitors. This differentiation leads to competitive advantage as well as other benefits. Some major benefits of delivering service quality are:
1. Retaining Customers – This means “repeat business.”
2. Referrals – Satisfied customers are happy to generate positive word-of-mouth.
3. Avoidance of “Price” Competition – If your organization is seen by customers as the same as others, then your product/service is essentially undifferentiated or like a commodity. As mentioned above, 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.
4. Retention of Good Employees – Employees like to work for a “quality” organization.
5. 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. Of course, many other costs are reduced such as lowing employee turnover and the cost of having to motivate uninspired employees (Kotler, Bowen, and Makens, 1996, pp. 362 - 364).
Services are unique in the since that they are intangible and, thus, customers must have trust before they purchase. In predominantly selling services, as in the hospitality industry, quality and perception of quality is essential. Service quality has many benefits including the ability for the organization to compete with a “differentiation” strategy in a world of “look-alike” hospitality products/services.
The good news is that thinking hospitality managers have service quality models that can guide them in planning and implementing service quality systems. And, these systems are almost guaranteed to deliver “competitive advantage.”
Berry, L.L. and Parasuraman, A. (1991). Marketing Services: Competing Through Quality. New York: The Free Press.
Godfrey, A.B. and Kammerer,E.G. (1991). “Service Quality vs. Manufacturing Quality: Five Myths Exploded,” in The Service Quality Handbook, Scheuing, E.E and Christopher, W.F. (Eds.). New York: American Management Association.
Gronroos, C. (1990). Service Management and Marketing: Managing Moments of Truth in Service Competition. Lexington, MA: Free Press.
Gronroos, C. (1991). “Quality Comes to Service,” in The Service Quality Handbook, Scheuing, E.E and Christopher, W.F. (Eds.). New York: American Management Association.
Kotler, P, Bowen, J and Makens, J. (1996). Marketing for Hospitality and Tourism. Upper Saddle River, NJ: Prentice Hall.
Copyright ©2000 by Richard G. McNeill ALL RIGHTS RESERVED