ARAB OPEN UNIVERSITY

FACULTY OF BUSINESS STUDIES MKT332

Service Marketing (MKT332)

Fall 2021-2022

(TMA)

Introduction

A service represents either intangibles yielding satisfaction directly, such as

transportation, or jointly when purchased with either commodities or other services, such as

credit (Regan, 1963). Therefore, service marketing is a strategy that promotes and displays

the intangible benefits offered by an organization to drive end customer value. It is through

this strategy that an organization anticipates the needs of the target audience while striving to

meet them. It is therefore important to improve it as its effectiveness will ensure optimum

value for consumers while ensuring new customer attraction, customer retention, and

channelizing referrals from existing customers. This can be achieved through an effective

understanding of the levels of customer expectations about a service and the factors that

influence them, as well as how their zone of tolerance for a service can be achieved.

Customer Expectations

Understanding customer expectations is vital for delivering quality services. Levels of

expectation are why two organizations in the same business can offer vastly different levels

of service and keep customers happy (Pitt et al. 1994). They include obtaining the desired and

adequate service.

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 The desired service, also termed as the highest expectations, can be defined as the

level of performance that a customer wants the service to meet as it reflects on what "can be"

and "should be". It is largely influenced by the personal needs of the consumer and their

philosophies about the service. Personal needs, which fall into categories such as social,

psychological, and physical, are core factors that shape the desires of the customer in service.

The personal service philosophy intensifies a customer’s desired service as it relates to their

perceived generic approach regarding the meaning and relevance of the service, in addition to

their perception of how a service should be offered. Also, it is influenced by lasting service

intensifiers, which occur when a customer’s expectations are fuelled by another person or a

group of people. For instance, in an organization-to-organization service, the customers'

expectations are dictated by the expectations of each organization’s customer service. The

desired service expectations are stable as they are driven by personal and lasting service

intensifiers.

Adequate service, on the other hand, represents the minimum tolerable expectation

and represents the lowest level of performance acceptable to the customer (Miller, 1977).

With this service, customers hope to realize their desires for a service, but they accept that it

is not always guaranteed. They require continuous monitoring depending on the intensity of

the competition. It is influenced by factors such as: Firstly, temporary service intensifiers,

which entail short-lived personal factors that arise, thus prompting the customer to require a

service. Secondly, perceived service alternatives refer to services comparable to those of

other providers that a consumer can acquire from them. Thirdly, the customer’s self-

perceived service role, which entails the degree to which the consumer affects the process of

service delivery, Fourthly, situation factors, which are service performance conditions that

customers view as beyond the control of the service provider (Pitt et al., 1994), Lastly,

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predicted service, which involves the customer's anticipation of the level of service they are

likely to experience,

Despite their differences, the desired and adequate services are both influenced by

explicit service promises, which generally shape what the customer desires and predicts will

occur in a certain service encounter. Also, they are shaped by implicit service promises,

which relate to the service-related cues such as the price and the benefits associated with the

service. Additionally, both services are influenced by word-of-mouth communication, which

ensures transmission of the nature of the quality of services offered by an organization from

one person to another. Both are also influenced by the past experience of a consumer

regarding the services offered due to an earlier exposure of the services in the equation.

Zone of Tolerance

For an organization to differentiate its services from others and compete effectively in

the market space, it should ensure complete optimization of its service quality and customer

satisfaction objectives. It is therefore mandatory for the organization to understand the

desired and adequate levels of customer expectations. It is by understanding these levels of

expectations that organizations will determine the customer’s zone of tolerance, which

represents the range of service quality outcomes which are deemed neither particularly good

nor bad by consumers (Zeithnmal et al., 1996). The zone of tolerance is therefore classified as

the area bordered by the desired and adequate levels of expectations. If a service quality

outcome ranges below the adequate level, an organization experiences a competitive

disadvantage, while one within the zone of tolerance gives the organization a competitive

advantage. Quality is deemed to refer to the cognitive judgement of a customer, while

satisfaction relates to the customer’s attitude towards a service.

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 There are various factors that play a role in a customer’s zone of tolerance, namely:

customer perception, customer satisfaction, service quality, and service encounters. Customer

perception refers to the consumer’s feelings, attitudes, and opinions towards a service offered

by an organization. The perception of a customer determines the growth and sustainability of

a business. A positive perception of a customer towards a service offered by an organization

narrows the zone of tolerance range, giving it a competitive advantage. If the perception is

negative, it widens the zone of tolerance, thus disadvantaging the organization. Another

factor is customer satisfaction. Customer satisfaction determines how well an organization’s

service meets a customer’s expectations. If the services meet the expectations of a customer,

they enhance customer loyalty to the organization, hence ensuring its growth while also

narrowing the Zone of Tolerance. The assessment of service quality is based on judgements

of outcome quality, interaction quality, and physical environment quality. It entails five

dimensions, namely: reliability, which encompasses the capacity to offer the promised

services at an effective level; assurance from the employees of the nature and trustability of

the services offered; tangibility, which refers to the efficiency of the personnel and equipment

used to offer the services; empathy, which relates to the quality of attention an organization

offers their customers during the process; and responsiveness of the organization as a whole

to the needs of a customer. Customer service encounters determine customer satisfaction and

loyalty depending on how the organization and the customer interact. The effectivity of these

factors narrows the zone of tolerance, hence increasing a firm’s competitive advantage.

There are various ways in which the Zone of Tolerance would cause a shift in

customer expectations. For instance, a failure in a single transaction by the company could

negatively affect the general analysis of the service, which would lead to customer

sensitization of the organization’s previous weaknesses in the delivery of services. This

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would lead them to scrutinize past experiences with the organization, and dissatisfying

outcomes may arise from previous service transactions with the organization.

Conclusion

In the service market, customer satisfaction is undisputable. The creation,

development, and management of relationships with customers is vital for the effective

realization of customer satisfaction as it enhances customer loyalty, thus extending the

organization’s attractiveness as a value proposition. The achievement of the satisfaction of a

customer is dependent on the organization’s ability to understand the two levels of customer

expectations: desired and adequate. Through the understanding of these levels, the

organization will be able to connect with its customers at a personal level, increase its service

quality, and optimize its objectives. By understanding the desired and adequate levels of

customer expectations, organizations will be able to determine the zone of tolerance of their

customers and avoid widening their gap through the implementation of innovative ways that

fit their customers' expectations. This will enhance its competitive edge in the competitive

market.

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 Bibliography

Miller, J.A., 1977. Studying satisfaction, modifying models, eliciting expectations, posing

problems, and making meaningful measurements. Conceptualization and

measurement of consumer satisfaction and dissatisfaction, pp.72-91.

Pitt, L.F. and Jeantrout, B., 1994. Management of customer expectations in service firms: a

study and a checklist. Service Industries Journal, 14(2), pp.170-189. [Online]

Available at: https://www.aou-elibrary.com/

Regan, W.J., 1963. The service revolution. Journal of marketing, 27(3), pp.57-62.

Zeithaml, V.A., Bitner, M.J. and Dremler, D., 1996. Services Marketing, international

edition. New York, NY and London: McGraw Hill. [Online] Available at:

https://www.aou-elibrary.com/