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Southern University Bangladesh

Department of Business Administration
Program: Undergraduate (BBA)
Course Title: MODERN MARKETING PRACTICES
Chapter 05: Service Marketing
What Is a Service?
Services have traditionally been difficult to define. Complicating matters further is the fact that the way
in which services are created and delivered to customers is often hard to grasp, since many inputs and
outputs are intangible. Most people have little difficulty creating simple definitions of manufacturing
(physical inputs are processed or assembled in a factory to create goods) or agriculture (live plants are
grown and then harvested for use as food or other purposes), but defining service can elude them.
Here are two approaches that capture the essence.
• A service is an act or performance offered by one party to another. Although the process may be
tied to a physical product, the performance is essentially intangible and does not normally result in
ownership of any of the factors of production.
• Services are economic activities that create value and provide benefits for customers at specific times
and places, as a result of bringing about a desired change in – or on behalf of – the recipient of the
service. More amusingly, services have also been described as „something which can be bought and
sold, but which you cannot drop on your foot‟.
Services versus Physical Goods

Now that we know that both goods and services are important to satisfy human wants, let us
understand how both are different from each other. The main points of distinction are:
Goods
1. Goods are tangible in nature i.e. they can be seen and touched.
2. There is a time gap between production and consumption of goods as they are produced first and
consumed later.
3. They can be stored and utilized when required.
4. They can be transferred from one place to another.
Let us take example of any one good, say chair. You can see a chair and can also touch it. The
carpenter first makes it in his workshop. You use it after purchasing it from the market. So there is a
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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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time gap between production of chair and its consumption. If suppose you do not require that chair
immediately you can keep it in your store and can use it when you require it. You can even give it or
sell it to another person.
Services
1. Services are non-tangible in nature i.e. they can neither be seen nor be touched.
2. There is no time gap between the production and consumption of services. That is why they are
produced and consumed simultaneously.
3. Services cannot be stored.
4. Transfer of service is not possible

The Special Characteristics of Services

Intangibility „

 Services are intangible in that they do not have a physical shape.

 So a consumer cannot touch or see it, he can only feel it.

Inseparability

 It means services are not of separable nature.

 It is created and supplied simultaneously.

 Services are first marketed and then produced and consumed simultaneously.
Heterogeneity

Perisibility

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The Expanded Marketing Mix for

Services: 3 More Ps
A selection of services developed to offer customers a choice within a particular range. The elements
of a services marketing mix are sometimes called the seven Ps: the four Ps of the marketing mix, plus
three Ps of services: participants, physical evidence, and process (of service assembly).

In the previous article we discussed the characteristics of a service. In this article we look at how the
marketing mix for marketing a service is different to the marketing mix for products. Just like the
marketing mix of a product the service marketing mix comprises of Product, Price, Place and
Promotion. However as a service is not tangible the marketing mix for a service has three additional
elements: People, Process and Physical Evidence.

People

People are an essential ingredient in service provision; recruiting and training the right staff is required
to create a competitive advantage. Customers make judgments about service provision and delivery
based on the people representing your organization. This is because people are one of the few
elements of the service that customers can see and interact with. The praise received by the volunteers
(games makers) for the London 2012 Olympics and Paralympics demonstrates the powerful effect
people can create during service delivery.

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Staff requires appropriate interpersonal skills, attitude, and service knowledge in order to deliver a
quality service. In the UK many organizations apply for the "Investors in People" Accreditation to
demonstrate that they train their staff to prescribed standards and best practices.

Process

This element of the marketing mix looks at the systems used to deliver the service. Imagine you walk
into Burger King and order a Whopper Meal and you get it delivered within 2 minutes. What was the
process that allowed you to obtain an efficient service delivery? Banks that send out Credit Cards
automatically when their customers old one has expired again require an efficient process to identify
expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer loyalty
and confidence in the company. All services need to be underpinned by clearly defined and efficient
processes. This will avoid confusion and promote a consistent service. In other words processes mean
that everybody knows what to do and how to do it.
The dimensions of a process‟s efficiency and effectiveness:
Length: the number of steps that participants have to follow in order to affect service delivery
Duration: the time that elapses from the first to the last activity of the service delivery process
Logistical effectiveness: the degree of smoothness in the flow of the steps of the service delivery
process

Physical Evidence (Physical Environment)

Physical evidence is about where the service is being delivered from. It is particularly relevant to
retailers operating out of shops. This element of the marketing mix will distinguish a company from its
competitors. Physical evidence can be used to charge a premium price for a service and establish a
positive experience. For example all hotels provide a bed to sleep on but one of the things affecting the
price charged, is the condition of the room (physical evidence) holding the bed. Customers will make
judgments about the organization based on the physical evidence. For example if you walk into a
restaurant you expect a clean and friendly environment, if the restaurant is smelly or dirty, customers
are likely to walk out. This is before they have even received the service.
The Service Marketing Mix involves Product, Price, Place, Promotion, People, Process and Physical
Evidence. Firms marketing a service need to get each of these elements correct. The marketing mix

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for a service has additional elements because the characteristics of a service are different to the
characteristics of a product.

The 7 P’s of Services Marketing

The first four elements in the services marketing mix are the same as those in the traditional
marketing mix. However, given the unique nature of services, the implications of these are slightly
different in case of services.

1. Product: In case of services, the „product‟ is intangible, heterogeneous and perishable.

Moreover, its production and consumption are inseparable. Hence, there is scope for
customizing the offering as per customer requirements and the actual customer encounter
therefore assumes particular significance. However, too much customization would
compromise the standard delivery of the service and adversely affect its quality. Hence
particular care has to be taken in designing the service offering.
2. Pricing: Pricing of services is tougher than pricing of goods. While the latter can be priced
easily by taking into account the raw material costs, in case of services attendant costs - such as
labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge
for the cost of the food served but also has to calculate a price for the ambience provided. The
final price for the service is then arrived at by including a mark up for an adequate profit
margin.

3. Place: Since service delivery is concurrent with its production and cannot be stored or
transported, the location of the service product assumes importance. Service providers have to
give special thought to where the service would be provided. Thus, a fine dine restaurant is
better located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday
resort is better situated in the countryside away from the rush and noise of a city.
4. Promotion: Since a service offering can be easily replicated promotion becomes crucial in
differentiating a service offering in the mind of the consumer. Thus, service providers offering
identical services such as airlines or banks and insurance companies invest heavily in advertising
their services. This is crucial in attracting customers in a segment where the services providers
have nearly identical offerings.

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We now look at the 3 new elements of the services marketing mix - people, process and physical
evidence - which are unique to the marketing of services.

5. People: People are a defining factor in a service delivery process, since a service is inseparable
from the person providing it. Thus, a restaurant is known as much for its food as for the service
provided by its staff. The same is true of banks and department stores. Consequently, customer
service training for staff has become a top priority for many organizations today.
6. Process: The process of service delivery is crucial since it ensures that the same standard of
service is repeatedly delivered to the customers. Therefore, most companies have a service blue
print which provides the details of the service delivery process, often going down to even
defining the service script and the greeting phrases to be used by the service staff.
7. Physical Evidence: Since services are intangible in nature most service providers strive to
incorporate certain tangible elements into their offering to enhance customer experience. Thus,
there are hair salons that have well designed waiting areas often with magazines and plush sofas
for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in
their interior design and decorations to offer a tangible and unique experience to their guests.

How to Price Business Services

Service businesses can range from a sole proprietorship consultancy to mid-sized businesses with
several hundred employees, some of whom go out to customers and perform anything from cleaning
homes to providing information technology expertise to large corporations. Get your pricing strategy
for these services wrong and you will create a problem you may never overcome. Get it right and you
will dramatically increase the likelihood of creating a business that perseveres and takes care of you
financially.

The following pages will provide a guide to how to price your services, the benefits and risks of certain
pricing structures, and how to monitor and change the pricing for your services without alienating
customers.

Differences between customer evaluation of pricing between services and goods:

a) Customers have limited or inaccurate reference price for services.
b) Monetary price is NOT the only price relevant to service customers.
c) Price is a key indicator of quality in services; i.e. higher the price better is the service.
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Factors to consider in pricing

when pricing services, there is a bit more leeway than pricing products. "The price of a product is more
objective. The price of a service is more subjective so that there is a gray area," Toftoy says. "Pricing is
both an art and a science." Here are the factors that experts say you should consider when trying to
determine what price to charge for a service:

 Cost-plus pricing. This standard method of pricing in business seeks to first determine the
cost of making a product or, in this case, providing a service, and then add an additional
amount to represent the desired profit. To determine cost, you need to figure out direct costs,
indirect costs, and fixed costs. "With the cost-plus approach, the thing to remember is that if
you're paying someone $11 an hour, you may think you should charge $11 an hour for the
service they provide, but you have to factor in all your costs," says Jerome Osteryoung, a
professor of Finance at Florida State University and outreach director of the Jim Moran
Institute for Global Entrepreneurship. Those costs include a portion of your rent, utilities,
administrative costs, and other general overhead costs. "When I make a deal to sell a service,"
he says, "I have to make sure to cover all my costs."
 Competitors' pricing. You need to be aware of what competitors are charging for similar
services in the marketplace, Osteryoung says. This information could come from competitor
websites, phone calls, talking to friends and associates who have used a competitor's services,
published data, etc. "I don't think it's a good idea for any entrepreneur to compete on price if
you can avoid it. Compete on service, ambiance, or other factors that set you apart," Osteryoung
says. If you have to compete on price to win a customer, you may ask yourself whether that
customer will be loyal to you if they find someone offering a service at a lower price. You want
to establish long-term relationships in the marketplace. "You need to convince the customer
that you are giving them tremendous value in terms of service and quality," Osteryoung says.
"You just need to be aware of what the competition is charging."
 Perceived value to the customer. This is where a lot of the subjectivity comes in when
setting a price for a service. When you have a product, you may decide to use keystone pricing,
which generally takes the wholesale cost and doubles it to come up with a price to charge and
account for your profit. With a service, you can't necessarily do that. To your customer, the
important factor in determining how much they are willing to pay for a service may not be how

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much time you spent providing the service, but ultimately what the perceived value of that
service and your expertise is to them, Osteryoung says. That is where pricing becomes more of
an art form.

Different Pricing Models

Now that you understand what it costs you to provide a service, what your competitors are charging,
and how customers perceive the value of your services, it's time to figure out whether to charge an
hourly rate, a per-project rate, or try to negotiate a retainer for your services. This may be
predetermined by your industry and the type of service pricing that predominates in your sector. For
example, lawyers tend to charge hourly rates for their services, although those rates can vary. Many
construction firms charge a project fee and require that one third be paid up front, another third be
paid at the half-way point, and the remaining third be paid upon completion.

 Charging an hourly rate. For many businesses, pricing services on an hourly rate is
preferred. This ensures that you are achieving a rate of return on the actual time and labor you
invest in servicing each customer. Hourly rates are often used when you are pricing your own
consulting services, instead of pricing a service that uses labor and materials from others. Your
rate should be determined by your amount of expertise and seniority; a more senior consultant
will generally be paid a higher hourly rate than a less experienced or junior consultant. The
SBA recommends that one's travel time be included as an extra charge. Sometimes even
consultants are asked to price a service on a project or contract basis. That contract needs to
factor in clerical support, computer or other services, and overhead expenses, the SBA advices.
 Charging a flat fee. In tough economic times, many businesses are concerned about keeping
costs down and may agree to hire your business for services only on a fixed-rate or flat-fee basis.
"Customers want a fixed rate," Osteryoung says. "Entrepreneurs want an hourly rate. It's a
question of who is going to bear the risk. If I charge a flat rate, I am bearing the risk." If a
project takes longer than expected to complete, you may risk losing money on the client. If you
have a customer that insists on a flat fee, you may want to see if they are amenable to putting a
cap on the number of hours involved in the project or agree to pay additional fees if the project
runs over that time.
 Variable pricing. In addition to determining a fair price for your services, you have to
determine whether you will practice a fixed-price policy and charge all your customers the same
amount or whether you want to institute variable pricing, in which bargaining and negotiation
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help set the price for each customer. "Should you charge different customers different rates? I
have a hard time with that," Osteryoung says. "The exception is if someone comes in and says
that they will book 1,000 hours of time, you may want to give them a price break for quantity.
But in general, charging different prices to different customers will create ill will. People will talk
about it and they will find out." One thing a business can not afford to lose is its integrity and
respect among customers.

Monitoring and Changing Your Price

In a service business, your biggest costs are usually your people costs -- salaries, benefits, etc. If you are
having a hard time selling services at an acceptable profit, the problem may be that your employee
costs are too high rather than the price is too low. You may want to also re-evaluate your overhead
costs to determine whether there are other cuts you can make to bring your price down and your profit
margin up. "Look at your expenses and see where you can cut," Toftoy advises.

Monitor profitability monthly

You need to understand the profitability of your company every month. By the 15th of every month,
you ought to have your financial statements from the previous month. "If there is any mistake I see
entrepreneurs make, it's that they don't spend enough time going over their financial statements,"
Osteryoung says. "In some cases, no one has ever shown them how to do that. I see their eyes glaze
over." In addition to understanding your monthly profitability, you need to understand the profitability
(or lack of profitability) of every service you sell. Make absolutely sure you know the degree to which
every person or project you sell is contributing to your goal of making money each month.

Test the market for new services and prices

You should always be testing new prices, new offers, and new combinations of benefits and premiums
to help you sell more of your services at a better and better price. Often the perfect time to do this is
when quoting a price to a new customer. Raise the price and offer a new and unique bonus or special
service for the customer. Measure the increase or decrease in the volume of services you sell and the
total gross profit dollars you generate.

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Be wise about raising your prices

It's a fact of life that you will have to raise prices from time to time as part of managing your business
prudently. If you never raise your prices, you won't in business for long. You have to constantly
monitor your price and your costs so that you are both competitive in the market and that you make
the kind of money you deserve to make in your business. But there are risks to raising prices,
particularly when your customers are going through tough financial times.

"You can price too high and sell yourself out," Toftoy says. "People don't forget that they felt like you
gouged them for the quality of the service you were selling."

 Do raise prices when your competitors are raising prices. If the competition has upped the ante,
that is a good signal that the market can and will support a price increase for your services, too.
 Do raise prices if your customers say you're a bargain. If your customers start commenting
about what a great value your services are, that "may be an indication you're charging too low a
price," Osteryoung says.
 Don't raise prices too much all at once. In a tough economy, a big jump in prices might be too
much of a jolt for your customers. Instead, raise prices in small increments of two or three price
increases over the course of a year, Osteryoung suggests.
 Don't raise prices across the board. Do be discreet. Customers may not notice price increases if
they are only for certain services and not for others. Osteryoung recalls speaking with a dentist
who recently raised prices on fillings but not cleanings -- a strategy that brought no customer
complaints. "You need to raise prices in today's economy where you think your customer can't
see there has been an increase," he says.

The bottom line is: You owe it to yourself and to your business to be relentless in managing your
pricing strategy. Remember, how you set the price of the services you sell could be the difference
between the success -- or failure -- of your business.

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Servction model
A model used to illustrate the four factors that influence the service experience, including those that
are visible to the consumer and those that are not.

Service Scope- It refers to the use of physical evidence to design service environments. It consists of
ambient conditions such as music, inanimate objects that assist the firm
inc o m p l e t i n g i s t a s k s , s u c h a s f u r n i s h i n g a n d b u s i n e s s e q u i p m e n t . A l l n o n -
l i v i n g features present during service encounter.

Service personnel: Employees other than primary providers that interact with consumer.

Organization and System:

P r i m a r y p r o v i d e r o f c o r e s e r v i c e , s u c h a s d e n t i s t , p h y s i c i a n o r instructor.

Other Customers-
C u s t o m e r A : R e c i p i e n t o f b u n d l e o f b e n e f i t s c r e a t e d t h r o u g h service experience and
customer B: Other customers who are part of Customers A‟s experience.

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Services Triangle
"Services marketing is about promises. Promises are made and promises are kept to customers.
Service triangle is the strategic framework which "reinforces the importance of people in the ability of
firms to keep their promises and succeed in building customer relationships" - (MJ. Bitner)

A services triangle is made up of three types of marketing, namely

I. External marketing 2. Interactive marketing and 3. Internal marketing.

The triangle shows three interlinked groups that work together to develop, promote and deliver
services. The key players are company, customers and the providers. Providers can be employees of
the firm, subcontractors or outsourced entities who actually deliver the company's services.

External Marketing means "Setting the Promise"

 Marketing to end-users that are your clients (patients).
 Involves pricing strategy, promotional activities, and all communication with customers.
 Performed to capture the attention of the market, and arouse interest in the service.
From the study point of view, In External marketing hospitals should consider their clients as a
marketer or promoter since better services in your hospitals induces customers to promote that

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hospital at least by word of mouth. Better services should be provided at low initial prices or price
penetration strategy should be followed.
Price can be used as a promotional tool in the market. Apart from pricing the team of well qualified
doctors and behavioral hospital staff contributes in promotional strategies.
Once the awareness of your hospital spreads to the potential customers, automatically the footfall will
be increased.
Internal Marketing means "Enabling the Promise"
 Marketing to employees that mean marketing of your well qualified doctor‟s team.
 Involves training, motivational, and teamwork programs, and all communication with all
employees including doctors and other supporting staff of your hospital.
 Enable employees to perform the service effectively, and keep up the promise made to the
customer.
From the study point of view, In Internal marketing hospitals have to enable their promise that they
have made to its existing as well as potential customer.
Here a hospital can hire a renowned doctor and by the worth of his name they can promote their
hospital. In this part all the employee of the organization gets the training for performing the prior
made promise.
Training enable employee to perform their work efficiently and effectively.

Interactive Marketing means “Delivering the promise”

 This is real time marketing and known as moment of Truth and Service Encounter.
 This refers to the decisive moment of interaction between the front-office employees and
customers, i.e. delivery of service.
 This step is of utmost importance, because if the employee falters at this level, all prior efforts
made towards establishing a relationship with the customer, would be wasted and it creates
negative brand image of your hospital.
From the study point of view, In Interactive marketing real service delivery takes place.
This is the time when your employee gets in touch with potential customers.
This is the most critical and significant step when it comes to assess the quality of hospital services.
Hospital administration should be careful enough at this step because it shows the hospitality toward
Tangibility Spectrum

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The broad definition of services implies that intangibility is a key determinant of whether an offering is
a service. Although this is true, it is also true that very few products are purely intangible or totally
tangible. Instead, services tend to be more intangible than manufactured products, and manufactured
products tend to be more tangible than services. For example, the fast-food industry, while classified as
a service, also has many tangible components such as the food, the packaging, and so on.
Automobiles, while classified within the manufacturing sector, also supply many intangibles, such as
transportation. Throughout this text, when we refer to services we will be assuming the broad
definition of services and acknowledging that there are very few “pure services” or “pure goods.” The
issues and approaches we discuss are directed toward those offerings that lie on the right side, the
intangible side, of the spectrum shown in this figure

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Service Process
It is sixth element of service marketing mix. The service process refers to how a service is provided or
delivered to a customer. Processes involve the procedures, tasks, schedules, mechanisms, activities and
routines by which a service is delivered to the customer.

Factors in designing service process

Designing a service delivery system is creative process. It begins with a service concept and strategy to
provide a service begins with a service concept and with features to differentiate it from the
competition.

 Service itself
 Customer participation
 Degree of customer contact
 Location of service delivery
 Complexity of service
Service process matrix
Degree of interaction and Customization

Low High

Service Factory Service Shop

 Airlines  Hospitals
 Transportation  Auto repair
Low  Hotel  Other repair
service

Degree Mass Service Professional Service

of labor  Retailing  Doctors
Intensity High  Wholesaling  Lawyers
 Schools  Accountants
 Retail aspects of  Architects
commercial banking

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Services emphasizes on two things:

 Degree Of Customization (rather than standardization)
 Degree Of Labor Intensity (rather than standardization)
Service process matrix is based on two service characteristics.
Professional Service
 Professional Service, such as accountant, lawyer, or doctor is highly customized and very labour
intensive.
 A doctor provides personal service to each patient based on extensive training in medicine
Service Shop
 ‡ Service shop, such as schools and hospitals, is less customized and labour intensives, but still
attentive to individual customers.‡
 A professor interacts with a classroom of students. Although a lecture may be prepared in
advance, its delivery is affected the students in each class.
Mass Service
 Mass Service, such as retailing and banking, offers the same basic services to all customersand allow
less interaction with the service providers.‡ A retail store provides a standard
array of products from which customers may chose.
Service Factory
 Services with the least degree of customization and labour intensity, such as airlines and
trucking, are most like manufactured products and are thus best processed by a service
factory.‡ Electricity is a commodity available continuously to customers.

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The Service Quality Model

The Gaps in the Model

 Gap 1: Customer Expectations – Management Perceptions Gap

 Gap 2: Management Perceptions - Service Quality Specifications Gap
 Gap 3: Service Quality Specifications - Service Delivery Gap
 Gap 4: Service Delivery - External Communications Gap
 Gap 5: Expected Service - Perceived Service Gap (or the Service Performance Gap)

Customer Expectations - Management Perceptions Gap

•Collect data on customer expectations
•Relate customer data to overall service strategy
•Increase management contact with customers

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•Increase internal communications

•Track performance on satisfaction
Inappropriate Quality Service Standards
•Leadership commitment
•“Can‟t be done” - create possibilities
•Standardize tasks
•Goal setting - based on service goals
The Service-Performance Gap
•Provide data on performance, on definition of standards for excellent service
•Provide opportunity to change and to grow
•Provide training - educate employees about customers
•Harmonize roles - define in customer service terms
•Develop team environment - work together
•Empower people to solve problems
•Provide support to employees to create high performance service
The Promise-Delivery Gap
•Break down barriers between departments
•Communicate freely
•Understand and mentor internal customers
•Standardize and communicate policies and procedures
•Communicate standards, policies and procedures to customers
•Emphasize primary characteristics
•Manage customer expectations
Expected Service - Perceived Service Gap
•This gap is the result of the other gaps
•This is the gap the customer notices
•Feedback on this gap (complaints) is diagnostic of the other gaps
•Here is where we obtain information that provides the imperative for improvement.
•Proactively seeking feedback here is essential to improvement
Service Dimensions: The Long List
•Reliability
•Responsiveness
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•Competence
•Access
•Courtesy
•Communication
•Credibility
•Security
•Understanding/Knowing the customer
•Tangibles
Service Excellence Model

The
External
Customer

Striving for
Service
Excellence

Standards of
Performance The Internal
Customer

The External Customer

 Get as close to your customers as possible so that you fully understand their needs and
expectations; those which are common to all, and those specific to each segment.
 Design your products and services around those needs and expectations and continuously
modify and enhance them as customer needs and expectations change.
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 Deliver those products and services in a way that consistently exceeds expectations.
 Introduce informal and formal feedback systems so that you always know how you are
performing in terms of service quality to enable you to continuously improve.

The Internal Customer

 Clearly define roles and responsibilities around customer service in your business so that there
are no „grey areas‟ and all play a defined, and supportive, role in the effort.
 Help employees to recognize the internal customer concept whereby they are all inter-
dependent on each other to do their jobs efficiently.
 Provide appropriate and continuous training for all employees on relevant aspects of service
quality, including how to handle complaints.
 Create a working environment which engages employees to the fullest extent so they see
customers as „theirs‟ and not just „yours‟.
 Get all employees actively involved in the service excellence effort including the active
solicitation of ideas and suggestions.
 Measure employee satisfaction at regular intervals and address blockages which are reducing
engagement levels.

Standards of Performance
 Identify key contact points and interactions with your customers.
 Devise standards of performance (SOPs) to guide how service should be delivered across all
those interactions.
 Train and regularly coach all your employees on how to deliver the standards.
 Constantly monitor and measure your ability to deliver the standards of performance
consistently across the service experience.
 Devise mechanisms which enable you to continuously improve.
SERVQUAL Model

SERVQUAL, later called RATER, is a quality management framework. SERVQUAL was first
published in 1985, 1988 [ by Valarie A. Zeithaml, A. Parasuraman & Leonard L. Berry to measure
quality in the service sector.
The SERVQUAL service quality model was developed by a group of American authors, 'Parasu'
Parasuraman, Valarie A. Zeithaml and Len Berry, in 1988. It highlights the main components of high
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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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quality service. The SERVQUAL authors originally identified ten elements of service quality, but in
later work, these were collapsed into five factors - reliability, assurance, tangibles, empathy and
responsiveness - that create the acronym RATER.
Businesses using SERVQUAL to measure and manage service quality deploy a questionnaire that
measures both the customer expectations of service quality in terms of these five dimensions, and their
perceptions of the service they receive. When customer expectations are greater than their perceptions
of received delivery, service quality is deemed low.
By the early 1990s, the authors had refined the model to five factors that enable the acronym RATER:

 Reliability: the ability to perform the promised service dependably and accurately
 Assurance: the knowledge and courtesy of employees and their ability to convey trust and
confidence
 Tangibles: the appearance of physical facilities, equipment, personnel and communication
materials
 Empathy: the provision of caring, individualized attention to customers
 Responsiveness: the willingness to help customers and to provide prompt service

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH