MARKETING OF SERVICES

UNIT II

Deciding the service quality:

Service quality is a measure of a business offering services and meeting various customer
requirements and expectations. If the level of an organisation's service quality is high, it
means that customers often find satisfaction in its services, which allows the business to
possess a competitive advantage over its competitors.

Some factors of service quality:

Process quality: Also referred to as operational quality, this factor determines the quality
of Procedures involved in production processes.

Output quality: Also referred to as technical quality, this factor comes after production
and Determines what customers receive from service providers.

Physical quality: This focuses on the quality of the product that a customer receives or the
quality of support for the products.

Interaction quality: This factor involves relationships between customers and service
providers Where interactions happen via different communication channels

Organisation quality: The perception or the reputation of an organisation is organisation

quality Where customers having faith in a brand is important.

Dimensions Of Service Quality

Dimensions of service quality, along with some common ones that are:

Reliability:This dimension of an organisation’s service quality expands when its services

remain reliable and Consistent. With this, the organisation offers great customer
satisfaction. Reliability focuses on Customer interaction, along with the delivery or
execution of the goods or services.

Tangibility: Tangibility is a company’s ability to portray its service quality attractively to its
customers. It is a Company’s functional quality that focuses on creating a good impression
on customers. A Company’s high tangible quality may result from the appearance of its
different components, like Headquarters or showrooms, outlets of its employees, the
marketing materials or the customer Service department.

Empathy:
This dimension is an organisation's ability to offer its services in a manner that makes the
company appear empathetic to its customers and their requirements. When a customer
believes that a company truly values them, they are more likely to remain loyal to that
company. A company may ensure empathy by offering individual attention to its customers

Responsiveness:A company that offers services promptly to its customers can often
ensure customer loyalty and improved business growth. This dimension of service quality
focuses on acknowledging, analysing And quickly replying to customer requests, feedback,
queries and issues. Responsiveness conveys to Customers that the company
acknowledges their feedback.

Assurance: Assurance is when customers have confidence in the services of an

organisation. It has an Important role in the services in which customers may not always
have sufficient expertise. This Means that there is an element of trust that customers
possess in the servicing organisation’s ability To deliver.

Importance Of High Service Quality:-

It increases sales. A company that offers high service quality has customers who prefer to
do Business with it, allowing the company to have repeat customers and boost its sales.

It reduces marketing costs. A company may use its funds to attract and gain new
customers, but it Is typically less expensive when it retains its existing ones by offering
high-quality services.

It attracts motivated employees. If a company has high service quality, motivated and
skilled Professionals may prefer working with that company to find growth in their career.

It offers repeat business. When customers know that a company’s customer service
department Is always willing to resolve their issues quickly, they are more likely to buy from
that company Again in the future.

It eliminates customers’ doubts. A customer may feel hesitant before purchasing a

particular Product, but a company’s high service quality may convince them to make the
purchase because The customer knows they can trust the company to resolve their issues
if they find any.

How To Improve Service Quality?

1. Understand the customers’ requirements

During an issue with a product, a customer may not know the exact problem. In such
situations, an Organisation that intends to deliver excellent customer service often focuses
on understanding the Exact issue of their customers based on which it offers a solution.
This process involves actively listening to customers and patiently offering problem
resolution.

2. Treat customers with respect

There may be times when a customer makes unreasonable requests. In situations like
these, a Company that remains respectful towards its customers shows its commitment to
its business. This Courtesy makes customers feel like the company is empathetic to their
problems.

3. Utilise customer feedback to improve Accepting feedback from customers is a

great way for a business to assess its service quality. Through customer feedback, a
business recognises its areas for improvement. When companies Acknowledge and
implement the suggestions, it shows customers they value their views and may
Want to modify services to best suit the requirements of their customers.

4. Offers a robust customer interaction system A company that deploys a

wellimplemented customer interaction system is often better able to Register
grievances and suggestions. Such a system can enhance business efficiency by
processing Customer requests quickly and easily

5. Ensure employees are familiar with company services A company may ensure
that all the employees who interact with customers possess extensive Knowledge
regarding the company’s services. This allows the entire customer service
department To explain the various services of the company to customers
coherently.
Levels Of Customer Service

Unsatisfactory

When an organisation is unable to meet customer expectations, its customer service

becomes unsatisfactory. Many factors contribute to unsatisfactory customer service, like
inefficient customer interactions or customer service representatives taking longer than
usual to help customers their their issues. Unsatisfactory service quality is also an
outcome of companies leaving customer queries unaddressed, which can result in a
decline in its customers, sales and revenue.

Meeting expectations of customers An organisation may ensure business stability by

meeting customer expectations. When customers Are not consistently registering
complaints, it means that the business is successfully meeting its Customer requirements.
A business may strive to provide excellent customer service to build a loyal Customer
base. This makes it important for a business to deliver and improve its service quality
Consistently to outperform its competitors and retain its customers.

Outstanding customer service

A business taking additional measures to offer high-level service quality may help deliver
Outstanding customer service. Companies that offer such services already often have
loyal Customers. Companies that show customers they value them can also offers their
customers various Benefits apart from high service quality, like discounts, early access to
sales, rewards and special offers

Exceeding expectations of customers

A company may exceed customer expectations when it offers them a memorable

experience. ToOffer such an experience, companies conduct an in-depth analysis of their
target audience to Understand their customers’ complete buying process. The objective of
this level is to offer Continued exceptional service quality to customers by utilising every
interaction with them.

Understanding customers expectations and zone of tolerance

“Customer expectations” in service marketing refers to the set of beliefs and desires a
customer holds about the level of service they anticipate receiving from a company,
encompassing aspects like quality, responsiveness, reliability, personalization, and ease of
interaction, which businesses need to understand and fulfill to provide a positive customer
experience and foster loyalty.

Customer expectations of service can be of two types: desired service and adequate
service.

Desired Service :It is defined as the service that a customer desires and hopes to receive.
In other words, the desired service expectations of a customer are a combination of what
he/she feels that a service provider can offer and should offer.

Customers are delighted when service performance exceeds Their desired service
expectations. Desired service expectations of a customer increases when the Customer is
experienced and has good knowledge of what to expect in the service.

Adequate Service Adequate service is the minimal level of service that a customer is
willing to accept from a Service provider and is based on the customerís perception of
what level of service is acceptable To him.

Customers are dissatisfied if the service provided by a service provider does not meet The
adequate service level expectations.
A customerís expectations of adequate service change with his perception of the available
alternatives for the particular service. Customersí expectation of adequate service
increases in Situations of an emergency.

Zone of Tolerance

It is the gap between customerís desired service expectations and the adequate service
expectations . This zone varies for each customer and for the same customer it differs In
different situations.

Several factors can influence the Zone of Tolerance, shaping the range of service
performance that customers find acceptable. Here are some key factors:

1. Personal Needs

Individual requirements and preferences can impact what a customer considers as

acceptable service. For example, someone with high service expectations might have a
narrower Zone of Tolerance compared to someone with lower expectations.

2. Service Promises

Company communications, such as advertising and marketing messages, can set

customer expectations. If a company promises exceptional service, customers may have
higher expectations, affecting the width of their Zone of Tolerance.
3. Past Experiences

Previous encounters with the service or similar services can shape customer expectations.
Positive past experiences might raise the desired service level, while negative experiences
could lower the adequate service level.

4. Word of Mouth

Recommendations and feedback from friends, family, or online reviews can influence
customer expectations. Positive word of mouth can raise the desired service level, while
negative word of mouth can do the opposite.

5. Situational Factors

Immediate circumstances, such as urgency or special needs, can alter the Zone of
Tolerance. For example, a customer in a hurry might have a narrower Zone of Tolerance for
waiting times.

6. Price

The price paid for the service can impact customer expectations. Higher prices often lead
to higher expectations, which can narrow the Zone of Tolerance. Conversely, lower prices
might result in a broader Zone of Tolerance.

7. Industry Standards

Common practices and standards within an industry can shape customer expectations. If
a particular level of service is standard in an industry, customers might have a narrower
Zone of Tolerance for services that fall below that standard.

8. Service Recovery

The way a company handles service failures or complaints can affect the Zone of
Tolerance. Effective service recovery can raise the adequate service level, while poor
service recovery can lower it.
9. Cultural Factors

Cultural background can influence customer expectations and perceptions of service

quality. Cultural norms and values can shape what is considered acceptable or desirable
service.

10. Customer Involvement

The level of customer involvement in the service process can impact expectations. For
services that require high customer involvement, customers might have a narrower Zone of
Tolerance for deviations from their expectations.