PRODUCT/SERVICES AND QUALITY
P2, S3, T1
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Introduction
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Products and Services thatmeet or exceed customer expectations result in customer satisfaction.Quality is the expected product/service being realized. Before acustomer makes a purchase (exchanges money for a product/service) he or shedoes a mental calculation: “Is theworth of the product/service (as I perceive and expect) equal to the money thatI am about to exchange?”
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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.
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However,quality is a function of how the customer views the product/service that he orshe receives. The customer view always compares what they expect with what theyactually receive regardless of how operations conceives quality. How docustomers arrive at their expectations?
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Marketing, especially sales, has amajor effect on how the customer views quality. As mentioned earlier, customer satisfaction is based on receivingthe actual product/service as expected.When marketing and sales enthusiastically promises a product/servicethat manufacturing or operations (in the case of a hospitality service) cannotdeliver, then expectations are not met, the customer is dissatisfied, andquality (in the customers’ eyes) is not realized.
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Quality isnot an absolute to be determined by operations or manufacturing. Variables that affect quality are: (a) customerexpectations (obtained from marketing and sales, as well as word of mouthand previous experience), (b) actual product/service received (how a service isperformed by operational people and actual tangibles received (cold food forexample). The following models explainthese basic concepts.
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Discussion
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What is Quality?
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There aretwo perspectives and lenses through which to view quality: Tangible Product Orientationand Intangible Service Delivery Orientation. Both are necessary, however, the latter is the most importantsince 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):
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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.
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Company image, word-of-mouth, andmarketing/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 ofMotel 6 paying $45 per night. Thus,both the guest at Motel 6 and the guest at the Ritz may conclude after theirstay that they received quality rooms. Why can both Motel 6 and Ritz deliver aquality room? Because the room at theRitz 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 variablethat signals expectations) that they paid.
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Product features quality relates tocustomer expectations.
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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?
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Seriously,products must work. At a basiclevel, they must operate as they are supposed to or the customer will determinethat the quality is inadequate.
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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.
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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.
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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.
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Quality Models
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Models help us understand thecomplexity of service quality. First, we will discuss an earlyfoundational model: The Perceived Service Quality Model developed byChristian Gronroos in 1982. Second, wewill discuss an evolutionary form of the Gronroos model, the Gap Analysis Model developed byV. A. Zeithaml, A. Parasuraman, and L. L. Berry in 1988. This last model, currently packaged as the SERVQUAL Model, is widely usedin the hospitality industry to understand and improve the quality ofhospitality service.
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Perceived Service Quality Model (Figure 1)
In 1982, Christian Gronroos, of theSwedish School of Economic, Helsinki, Finland, introduced The Perceived Service Quality Model (seeFigure 1). According to Gronroos, service quality studies and subsequent modeldevelopment has from the beginning beenbased on what customers perceive asquality. In other words, servicequality is an outgrowth of the marketing concept; focus on the customer. What is important is what is perceived asquality by the customer and not what designers or operations people feel isgood or bad quality.
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Customer buying behavior theorieshave strongly influenced many service quality models. The notion that the customer’s post-purchase perception is afunction of his or her pre-purchase expectations is the foundation of theconfirmation/disconfirmation concept of service quality. The confirmation/disconfirmation concept isthe foundation concept of both Gronroos’ 1982, Perceived Service Quality Modeland the well-known (1988) Gap Analysisand SERVQUAL models by V. A. Zeithaml, A. Parasuraman, and L. L. Berry(Gronroos, 1991).
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According to the Perceived ServiceQuality model (Figure 1), the quality of a service, as perceived by thecustomer, is the result of a comparison between the expectations of thecustomer and his or her real-life experiences.If the “experienced quality” exceeds “expected quality,” the “totalperceived quality” is positive. If expectations are not met by performance orthe actual experience, the perceived quality is low. There are multiplecustomers in an internship program: students, internship suppliers, andsponsoring entities, for example. Finalsuccess is dependent on initial expectations compared to actual performance.
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Figure 1
The Perceived Service Quality Model
Source: Gronroos, C. (1991). “Quality Comes to Service,” in The Service Quality Handbook.
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The Five-Gap Modelof Service Quality (Figure 2)
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Another widely used model ofservice quality is known as the five gap model (Kotler, Bowen, and Makens,1996, pp. 357 - 361). Knowing whatcoustomers expect is the first and possibly the most critical step in deliveringservice quality. Thus, the marketing/organization must know what customers expect to be able to provide servicesthat customers perceive as excellent.This an extension of the marketing concept and consultative sellingapproach that: (a) first, learns through thorough questioning (read extensivemarket research) what the customer needs and wants (customer’s problem thatthey want to be solved) and (b) second, delivering the product/service benefitsthat will solve the problem (satisfy the needs/wants).
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Figure 2
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The Gap Analysis Model of Service Quality
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Source: Adapted from Kotler, P, Bowen, J and Makens,J. (1996). Marketing for Hospitalityand Tourism. Upper SaddleRiver, NJ: Prentice Hall, p. 358.
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Gap 1: Consumer Expectations vs. Management Perceptions
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Oftenhospitality managers fail to understand what customers expect in the offeredproduct/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 nolonger than 15 minutes to check in. Ifthe hotel guest gets upset after a 10 minute wait, then Gap 1 exists.
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Often,hospitality firms initially survey customers to understand theirexpectations. However, over time thesecustomer expectations change (change is constantly happening). If theproduct/service does not adapt to these changes, then Gap 1 widens.
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Ongoingresearch is essential to stay apprised of the changing customerexpectations. Formal research plusinformal 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 vitalsource of changing customer expectations.
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Gap 2: Management Perception vs. Service Quality Specifications
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Whenhospitality managers know what customers expect, BUT cannot or will notdevelop products/services and systems to deliver it, then Gap 2 occurs. Several reasons for Gap 2 are:
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1. Inadequatecommitment to service quality,
2. Lack ofperception of the feasibility of addressing customer expectations
3. Inadequate taskstandardization (within the hospitality organization)
4. Absence ofgoal-setting by management and inability to get employee “buy-in.”
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Thehospitality industry has been accused of being short-term oriented. Short-term profits and unwillingness to investin human resources and technological tools and equipment almost always causesservice quality delivery problems.
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Gap 3: Service Quality Specifications vs. Service Delivery
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Whenhospitality managers know what customers expect AND have developed products/services,systems, and specifications to deliver it BUT employees are unable or unwillingto deliver the service, then Gap 3occurs. Several reasons for Gap 3 are:
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1. Employeesare not given the tools and working conditions to do the job.
2. Employeesare not correctly selected, trained, and motivated.
3. Employeesare not properly “led” by managers(Are managers really “leaders?”)
Gap 4: Service Delivery vs. External Communications
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Whenhospitality management (represented by marketing and sales executives) promisesmore in its external communications than it can deliver (operations) then Gap 4 occurs. Externalcommunications includes, but is not limited to, advertising, public relations,pricing messages, and personal selling.
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Hospitalitymarketers must ensure that operations can deliver what marketing(external communications) promises.General managers must fully understand the marketing/selling process aswell as operational processes. Why? Because it is obvious that the two areasmust “seamlessly” work together to meet customer expectations.
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Gap 5: Expected Service vs. Perceived Service
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Gap 5 is where the“rubber-meets-the-road.” The size ofGap 5 is dependent on all of the other gaps.
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1. ExpectedService is what the customerexpects to receive from the hospitality organization.
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2. Perceived Service is whatthe customer believes or perceives that he or she has actually received fromthe hospitality organization (after the service experience).
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3. Gap 5 is the Differencebetween the above. Customersatisfaction and quality is dependent upon this gap being reduced oreliminated. Hospitality management isresponsible for managing the absence or presence of this gap.
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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.
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Benefits of Service Quality
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Thehospitality industry has a reputation for being short-term oriented. Often, in this fast moving industry, thereis a large amount of “fire-fighting” that occurs. When problems arise seem to completely surround the hospitalitymanager, survival is key. Thus, simplyhandling the problem and moving to next is the pattern of activity. Long-term planning and serious thought seemsto be often overlooked.
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Ancientwisdom continuously reminds the human being that, “if you don’t know where youare going, any road will take you there” (said the Cheshire Cat to Alice in Throughthe Looking-glass by Lewis Carrollwritten in the 1800s). The same can be said for effective planning andimplementation by circ*mspect hospitality leadership. The hospitality industryoffers products and services that are often “me-toos” and similar toundifferentiated commodities such as salt or gasoline. Anybody can spend the money to build a beautifulhotel, but not everybody can produce superior service quality. And, meeting customers’ expectations, as wehave seen above, translates into service quality.
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Thosehospitality 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 asother benefits. Some major benefits of delivering service quality are:
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1. Retaining Customers – This means “repeat business.”
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2. Referrals – Satisfied customers are happy to generate positive word-of-mouth.
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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.
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4. Retention of Good Employees – Employees like to work for a “quality” organization.
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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).
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Summary
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Services are unique in the sincethat they are intangible and, thus, customers must have trust beforethey purchase. In predominantly sellingservices, as in the hospitality industry, quality and perception ofquality is essential. Service quality has many benefits including the abilityfor the organization to compete with a “differentiation” strategy in a world of“look-alike” hospitality products/services.
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The good news is that thinkinghospitality managers have service quality models that can guide them inplanning and implementing service quality systems. And, these systems are almost guaranteed to deliver “competitiveadvantage.”
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References
Berry, L.L.and Parasuraman, A. (1991). Marketing Services: Competing Through Quality.New York: The Free Press.
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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.
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Gronroos, C. (1990). ServiceManagement and Marketing: Managing Moments of Truth in Service Competition. Lexington, MA: Free Press.
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Gronroos, C. (1991). “Quality Comesto Service,” in The Service Quality Handbook, Scheuing, E.E andChristopher, W.F. (Eds.). New York: AmericanManagement Association.
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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
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