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Service Quality Gap and Strategies to Fill Up Service Quality Gap

Batch Alpha - Group 2
Jamnalal Bajaj Institute of Management Studies MMS 1 Ankit Kumar Harshavardhan Chavan Jyotirmoy Mukherjee Nikhil Kasat Sanket Madavi Umesh Mahajan

Service Quality Gap and Strategies to Fill Up Service Quality Gap Service Quality Gap Service quality is a term which describes a comparison of expectations with performance.  Empathy or the caring. external communication like the publicity of the firm in the media and its advertisements and other corporate communication. personal experience on the part of the customer. personal needs and past experiences. word of mouth and advertisement. Service quality is a business administration term used to describe achievement in service.  Tangible or the appearance of physical facilities. Study shows that customer assessed the service of firm on the following parameter. courtesy extended to the customer. equipment. assurance tangibility responsiveness and empathy in order to determine the service quality of the firm. relative.  Reliability or the ability to perform the desired service dependably and accurately  Responsiveness or the willingness to help customers and prompt service  Assurance as measured by the competence of the firm in delivering the promised service. Customer perception of the firm and its offer are shaped by word of mouth publicity like recommendation of friend. thus leaving a gap. individualized attention that the firm provides to customer. It reflects at each service encounter. 2 . the firm’s creditability and the extent to which customer feels secure. In general Customers compare perceived service with expected service in which if the former falls short of the latter the customers are disappointed. Customer perceived reliability. personal need of individual customers. A customer's expectation of a particular service is determined by factors such as recommendations. The expected service and the perceived service sometimes may not be equal. neighbour and peer at workplace. personnel and communication material. Customers form service expectations from past experiences.

When positive perceptions are not confirmed by the actual performance of the firm.job fit and poor technology job fit. 3 . inappropriate supervisory control systems lack of perceived control and lack of team work.  Gap 3: Service specification versus service delivery: as a result of role ambiguity and conflict poor employee. a perception of unfeasibility inadequate task standardization and an absence of goal settings.  Gap 1: Customer’s expectations versus management perceptions: as a result of the lack of a marketing research orientations inadequate upward communication and too many layers of management.  Gap 2: Management perceptions versus service specification: as a result of inadequate commitment to service quality. a gap occurs. and this has been called the Service Quality Gap There are four major gaps in the service quality concept.

Routine transactional surveys after delivering the customer 4 .Customers' expectations have been shaped by word of mouth. their personal needs and their own past experiences. Gap 4: Service delivery versus external communication: as a result of inadequate horizontal communication and propensity to over promise  Gap 5 : Gap between a customer's perception of the experience and the customer's expectation of the service .

the firm’s service centres should seek out the customer. It is not only important to have service vision but it is equally critical to plan and implement a service quality strategy. this looks impossible. Service which is done at hand. a service concept.  Making delivery point user friendly: 5 . up gradation of technology. at the time customer wants it. Here the firm has to set before itself the goal of 100 per cent customer satisfaction. challenging and even achievable goal. Training and decentralization of decision making. where in HRD. in reality it has been found to be a motivating. Through open communication companies has continued to refine its service concept. Dissatisfaction is as contagious as satisfaction and therefore the firm should work to achieve 100 per cent customer satisfaction. The option demands that instead of the customer having to seek out service outlets.  Locating service point near the customer: Taking service to the customer is one of the useful tools in improving in improving service quality. and operating strategy which communicated to everyone in the organization. When the firms encounter service quality gaps. By understanding what their target customer want and how they perceive firms competitors. and service delivery points have played a pivotal role. Organization’s take when service quality gaps are encountered Service quality is a deliberate strategic choice exercised by winner firms. has to focus on the following critical areas:  Developing a shared service vision: The starting point is that of developing a shared service vision. The firm has achieved its goal through strategy and system integration. Though on the face of it.experience are important for an organization to measure customer perceptions of service. and accessibility of top management contact personnel and a customer have helped firms to emerge a winner in the financial service industry.

Cleanliness. confusion occurs. Their performance should be assessed on the basis of their contribution in creating a satisfied customer. encouraging two ways communication. Individual have to appreciate that without support from other individuals or department it is difficult to achieve 100 per cent customer satisfaction. and using technology can make service delivery point customer friendly. friendly environment and courteous people. Technology today offers opportunities to the firm to provide a highly dependable. and letting the individual employee take calculated risk is important.  Unconditional guarantee: The firm must also plan to give unconditional guarantee to its customer.  Role clarity and empowering people: Role clarity and inter-role linkage helps motivate service provider to deliver good quality service to the customer.  Reducing the time gap between services sought and delivered: A firm should work to reduce the time gap between the customer asking for service and being delivered. Especially when commitment to customer service is pledge by none else than the Chief Executive of the firm.  Product design : The firm should also take a close look at its product design and examine how technology can help better serve customer. Customer confidence in the firm and its product goes up.It is important to have service point user friendly.  Performance measurement and reward systems: To create excellence in service quality it is necessary to reinforce the positive behaviour of service providers. Decentralization decision making. warm hospitality shown in both verbally and non-verbally. zero defect products. Often when role of an individual employee is not clear defined and role overlapping are a common phenomenon in the organization. Organization will need to be flat so as to enable them to respond faster to customer needs and problems. The firm should aim at providing any service to the customer in least possible time. Corporate reward 6 .

GATI – Ahead in Reach     Among top five players in the country Best logistics company award Network reaches up to 580 districts out of 590 districts Also into international operations Service Quality Gaps Knowledge Gap:  Improper field level education  Business intelligence not available for decision making at all levels  Least attention paid to small customers Solutions: o Customers information is collected through feedback forms o Appointment of executives to cater all types of customers Standard Gap:  No proper service design for customers  Fluctuation in fuel prices  No insurance for goods 7 . It should also occasionally conduct market research to understand people changing customer perception and expectations. Firm need to educate and train their employee in delivering quality service. too feel motivated to deliver quality service.  Research and training of people: A firm needs to continuously monitor customer satisfaction and for this it needs to have a customer feedback and intelligence system in place. Case Studies 1.system should encourage such employees and the firm should show case them so that others. Employees will also have to educated or trained in using state of art technology to service customers. They have to be sensitive to customer needs and expectations.

net Perception Gap:  Indifferent attitude towards customers  Improper design leading to negative perception  Improper information transparency to their supply chain partners to maintain competitiveness Solutions: o Should have a positive attitude towards the customer o Proper market research to change design accordingly 8 . Improper allocation of funds Solutions: o Sharing the burden of increasing fuel prices o Insurance for goods Delivery Gap:  Poor employee-technology job fit  Delay in delivering the service  Over pricing to match demand Solutions: o Employees are properly trained o Promptness in delivery Communication Gap:  Improper horizontal communication  Customer enquiry constraints  Absence of strong internal marketing  Lack of adequate education for customer Solutions: o Toll Free Number available to provide information to the customers o Online tracking system on Gati.

Richard and Maurice opened a drive-in restaurant in San Bernardino. The company. However. operations and marketing. which was once the favorite destination of fast food lovers around the world.Corporate customers. the largest fast food chain in the world. Hence interpretation of a local customer varies differently Solutions: o Should focus on B to C advertising apart from B to B advertising o Provide services as promised Service Gap:  Value added services  Ware housing facility  Reverse logistics Solutions: o Started giving value added services in some areas 2. after years of declining earnings and poor customer ratings. McDonalds – A Story of Service Recovery Background Note: The McDonald brothers. No Longer the ‘Great American Meal’: Through the decades. under delivery  Main customers . in 1937. the President. Under the turnaround plan. it was clear that the company has lost its claim to that title. McDonald had promoted itself as the provider of the ‘Great American Meal’. By the late 1990s. who was made CEO in early 2003. The new plan eliminated the negative elements in the system.. 9 . However. seemed to have lost its claim to providing the ‘Great American Meal’. Changing customer eating habits. had been receiving low ratings on quality and customer satisfaction since the early 1990s. McDonald’s managed a relatively quick turnaround. by the1990s.Interpretation Gap:  Overpromise. under the leadership of Jim Cantalupo. while retaining and building on the positive aspects. California. McDonald’s Corp. and Charlie Bell. McDonald’s introduced substantial system wide changes that overhauled the company’s products.

To a survey conducted by 10 . company’s like Subway and Panera Bread. fries and soda. These restaurants created a new subcategory in the industry and were called ‘fast casual outlets’.increased competition and complacence on the part of the company and its franchises. and lead to a spate of problems related to obesity and heart disease. it did not take long for the industry to become the target of lawsuits filed by people who blamed the fast food industry for their obesity. analysts noted that customer behavior in the fast food industry was paradoxical. which offered sandwiches and salads in a casual dining atmosphere. However. Although none of the lawsuits filed against the company were successful. which dealt in salads and sandwiches. In an attempt to recover their lost customers. People realized that regular consumption of fast food could play havoc with their health by increasing their intake of Cholesterol and fat. Cosi and Panera Bread. Consequently. Despite the protests and the accusations against the industry. which were perceived as healthier foods. people switched to sandwiches and salads. analysts said that they generated a large amount of bad publicity. Considering people's perception of fast food. McDonald introduced the McLean Deluxe Burger in the early 1990s a 91% fat free patty. were the main reasons for the difficulties experienced by it. which comprised mainly of burgers. and customers rejected the change. People realized that junk food was unhealthy and criticized companies for serving it. Apart from increasing public aversion to fast food. but it was not able to give the trademark McDonalds taste. The 1990s saw an increasing interest in healthy living and physical fitness in the US. For instance. began to take over the customer base of fast food chains like McDonalds. as a substitute for the Big Mac. people hated its taste and McDonalds was forced to phase out the product a couple of years after it was launched. consumers were demanding better food and more variety. and reports also made public the unhygienic careless way in which the food was being prepared. Instead of fast food. McDonald Start including healthier items like salad and sand witches in their menu. Activists published statistics showing that McDonald’s food had a high proportion of unhealthy fats. Acc. increased competition also harmed McDonald’s adversely. but when healthier alternatives were made available. Wendy’s and Pizza Hut. customers did not like them. Mc Donald also attempted to shift to low fat frying oil in2002. McDonald focused on building more stores. but also from chains like Subway. McDonald’s had to face competit ion not only from fast food chains like Burger King.

For instant. Acc. French fry bins. The cornerstone of the turnaround plan was the improvement of comparable sales. It also introduced new automated drink dispensers. while doing away with slow moving products. and a hydraulic vegetable-oil-delivery system that would save time in the kitchen. McDonald’s products had become stale and the company had failed to come out with successful product launches since the early 1980s. 11 . speed and service. In 1992 McDonald’s introduced ‘made for you’ kitchens to counter custom-made food systems at Wendy’s and Burger King. Research also found that slow service and rude professional employees were major sources of customer’s complaints.Business week. to a survey. to introduce 40 food items but most of them failed to appeal to customers. which outlined McDonald’s strategy for the next three years. McDonald’s’ continuous expansion and failing franchisee relations had an adverse effect on service and quality. The board ousted Greenberg and installed Cantalupo as the CEO. and designed new menu boards that would include more pictures to make ordering easy. a Quarter Pounder meals. In 1990s. The Golden Arches Rise Again: After McDonald’s announced its first quarterly loss in38 years in 2003. which could be increased by improving the quality of service and operations in existing restaurants. Soon after taking over. The plan streamlined the company’s operations and aimed to create a McDonald’s that was more geared to the new conditions in the fast food industry. as far as the quality of food was concerned. the company made several improvements designed to help the restaurants function more efficiently. it reduced the number of shelf-keeping units by 84. Cantalupo prepared the ‘plan to win’. but it extended the time required to serve instead of speeding it up. Wendy’s took 127 seconds to serve its customers while V took 163 seconds. which reduced inventory. which had been its USP for many years. Besides. McDonald’s planned to sell only the Quarter Pounder. and a Two-Cheeseburger meal. consumers who ate fast food at least once a month rated both Wendy’s and burger king better than McDonald’s. instead of selling separately a Double Cheeseburger meal. The menu was simplified and included a greater number of healthy options. instead of funneling capital spending into new openings. McDonald’s stopped grading its franchisee’s by mystery shoppers on parameters such as cleanliness. For instance. the board realized that big changes were required in the company’s strategy and direction. Although it attempted in the 1990s. Towards this end.

Cantalupo reinstalled the grading system by ‘mystery shoppers’ to identify.5%.anonymous visitors paid to observe restaurants. McDonald’s began to showing signs of turning around by early 2004. which were reasonably successful. the company decided that each restaurant would be visited by mystery shoppers. Some Australian franchisees were testing a concept called McCafe in over 500 outlets in Australia. In 2003. Number of satisfied customers increased by more than 2 million over 2003-2004. along with items like McGriddles breakfast sandwiches. It also began offering fruit with Happy least 16 times a year. In early 2004. 12 . Surveys conducted by the company in the early 2000s revealed that Ronald McDonalds was one of the best recognized icons in the US. Under the turnaround plan. In a move to offer a healthier menu McDonald’s Increased it's focused on salads and sandwiches. In 2003. comparable store sales increased 10. bottled water. the company introduced the ‘travel path’ which required that a staff member. McDonald’s began phasing out its ‘super size’ portions of fries and soft drinks. had to walk around at regular intervals during the day to ensure that everything was in order. improve. McDonald’s was also on a drive to improve quality of service and maintenance standards in its restaurants. a pedometer and a booklet of walking tips. Soon after introducing this concept.The number of items in a Value Meal was also pared down from 13 to 8. or eliminate underperforming restaurants and to check whether the franchisees were maintaining the expected high standards of hygiene and cleanliness. In 2004. ranking just behind Santa Claus. it introduced entrée-sized salads. which was a meal designed for grown-ups that included a salad. Some McDonald’s outlets were also diversifying into coffee. It also launched the Adult Happy meal. in a restaurant. white-meat chicken nuggets and chicken nuggets and chicken strips.