Service and quality

Service and quality
Nowadays, service quality strategy is an important weapon used to gain a competitive advantage over competitors. This chapter starts by defining quality, services and service quality. Some essential elements such as the expectations of service, importance of service quality and its benefits are also being highlighted. It further stresses the need for handling customer complaints and underlines the role of service failure and recovery.
1.2 Meanings of Quality

Quality is constantly evolving depending on its application techniques used. Quality is a term that is heard almost everywhere nowadays, from top management business to the small corner shop on the local street to the stall selling fruits in the market. Quality is perceived as a subjective term which means different things to different people in different situations.

According to Joseph M. Juran (1988), quality is defined as “fitness for purpose”. Deming W. Edwards (1982), another quality guru, described quality as being “a predictable degree of uniformity and dependability at low cost and suited to the market”. However, “Delighting the customer by fully meeting their needs and expectations” is a more common definition of quality.
Other definitions of quality are listed below:
· “Quality is a conformance to requirement” (Philip Crosby, 1979)
· “Quality is the customer’s opinion” (Armand V Feigenbaum, 2004)
· “Quality is the extent to which the customer or users believe the product or service surpasses their needs and expectations” (Gitlow et al. , 1989)
The different definitions of “quality” given above are not stating the same thing. Thus, it is possible that one business concentrates on quality to meet a specified requirement, but this may not satisfy the customer’s expectations. Also, it is possible for a product to be of a degree of excellence but may not fit for purpose, that is, the definition underlined by Joseph Juran. Simply expressed, all gurus of quality dance around the definition of quality but none of these definitions stated above is a complete statement of what is meant by quality.
1.3 Importance of Quality

The concept of quality is currently so widely used by organisations that it is no longer just an advantage to adopt it but a must for survival. Increased globalisation leads to increased competitive pressures. Therefore, businesses are forced to do their best to be more efficient, more up-to-date with the changing technologies and at the same time to be responsive to the markets. Dale (2003) stresses the importance of quality in that it increases productivity, followed by enhanced performance in the marketplace and improves overall business performance.

According to Armand Feigenbaum (2004), quality is considered to be the single most important force resulting in organisational success and growth in both national and international markets. Competition nowadays is fiercer as existing competitors need to improve their offerings while new and low cost competitors emerge in the marketplace (Dale, 2003). Consequently, businesses are required to understand the great significance of quality and try to indulge in continuous and sustainable quality improvements in order to survive.
Quality is a key aspect that plays a great role for both goods and services providing enterprises. More specifically, quality and its management have turned out to be progressively significant in pursuing business excellence, superior performance and market supremacy.
But why quality in service? This is because organisations face challenges such as meeting customer requirements while remaining economically competitive. Services are labour intensive even today. There is not any substitute for high quality personal interaction between service employees and customers. Thus, quality practices need to be implemented by the service enterprises to identify problems quickly and systematically, establish valid and reliable service performance measures and measure customer satisfaction.
1.4 Services

The new catch-all word “services” is making its rounds in the industry in the last decade. Indeed, the role of services in the world economy has increased considerably within the last ten years, particularly in developed nations. According to Jiang and Rosenbloom (2005), the shifting of the economy in industrialised countries from goods to services is considered to be one of the most essential long-term trends in the business world today. In fact, the service sector is one of the fastest growing sectors in the USA nowadays, accounting for over 75% of the increase in the GNP (Gross National Product) in the last decade.

Regan (1963) brought in the idea of services being “activities, benefits or satisfactions which are offered for sale, or are provided in connection with the sale of goods”. As human beings, we consume services in our everyday life such as switching on the television, talking on mobile phones and using emails. Economies of the world are becoming more and more services based. Some activities such as banking, construction, tourism, accounting and hairdressing can be easily identified. Organisation goals can be achieved by knowing the needs and wants of target markets and thus delivering the appropriate and desired service better than competitors.
According to Zeithaml et al. (1990), customers are considered to be the only judge of service. However, it is often difficult for customers to predict satisfaction and evaluate service prior to purchase and consumption and hence, they are more likely to look for information before purchasing services than goods This may be mostly due to the fact that services, in contrast to goods, are commonly said to derive from the four characteristics namely intangibility, heterogeneity, perishability and inseparability.
However, some authors have argued that services are not fundamentally different from goods and have also reported that no pure goods or services exist in today’s marketplace (McDougall et al. , 1990; cited by Stell et al. , 1996). This stream of thought puts forward that the service/good dichotomy is such that consumers can purchase either a good or service to fulfill their needs. For instance, when consumers need to have their documents copied, they may buy a personal copy machine (a good) or go to a copy center (a service). In these circumstances, services may compete directly with goods (Dholakia and Venkatraman, 1993). So, instead of identifying differences, marketing strategy should be based on the similarities between services and physical goods in relation to the characteristics of the total market offering.
1.4.1 Services in Retail Industry

Organisations must be able to identify their most important customers and prospect and at the same time integrating customer insights and powerful analytics into retail decision-making. Thus, this can drive high performance throughout the business. Evidence suggests that services business customers tend to remain with the same service provider if they are continually and continuously satisfied (Hong and Goo, 2004). The building and maintenance of such relationships can attain better financial performance, customer trust, commitment and satisfaction (Hsieh et al, 2002).

In order to achieve high performance in the retail industry, there are several attributes that retailers should strive towards to guarantee success and outperform their competitors. They have to excel in areas such as being customer focus, being continuously innovative, establishing a performance-oriented culture and improving the distribution channel. All these add a new dimension of competition.
1.5 Definition of Service Quality

Service quality has drawn attention of researchers in recent decades (Zeithaml, 2000). Nevertheless, since there is not a universally accepted definition for service quality, many different meanings exist. For instance, Czepiel (1990) portrays service quality as customers’ perception of how well a service meets or exceeds their expectations whereas Bitner, Booms and Mohr (1994, p. 97) define service quality as “the consumer’s overall impression of the relative inferiority or superiority of the organisation and its services”. Zeithaml et al. (1996) depict service quality as “the delivery of excellent or superior service relative to customer expectations”.

While other researchers (for example, Cronin and Taylor, 1994) view service quality as a form of attitude representing a long-run evaluation in general, Parasuraman, Zeithaml and Berry (1985, p. 48) define service quality as “a function of the differences between expectation and performance along the quality dimensions”. Indeed, this has appeared to be consistent with Roest and Pieters’ (1997) definition that service quality is a relativistic and cognitive discrepancy between experience-based norms and performances concerning service benefits.
As for Gronroos (1983), service quality is viewed as the accomplishment of customers’ expectations whereas Parasuraman et al. (1985) define it as the gap between customers’ expectations, in terms of service, and their perception developed by the actual service experience. That is, service quality is an attitude that results from the comparison of expected service levels with perceived performance.
Furthermore, Parasuraman et al. (1985) have reported that outstanding service is a profitable strategy as it results in more new customers, fewer lost customers, more business with existing customers, more insulation from price competition and fewer mistakes requiring the re-performance of services. Accordingly, by offering superior service quality, a firm is liable to become more profitable and at the same time to sustain a competitive edge in their served markets.
Evidently, superior service quality is a strategic weapon aiming to attract more customers. Lassar et al. (2000) believe that service quality is a significant sign of customer satisfaction and thus delivering superior service quality is a strategy that eventually leads to success.
1.5.1 Service Quality in Retailing

With the rapid development in the retail industry nowadays, understanding of retail service quality and identifying determinants of retail service quality has become strategic importance for retailers. By satisfying customers through high quality service, firms not only retain their current customers, but at the same time, their market share also increases. (Finn and Lamb, 1991; cited by Nguyen, 2007)

According to numerous marking researchers (for example, Berry, 1986; Reichheld & Sasser, 1990; Dabholkar et al., 1996; NcGoldrick, 2002), the offer and supply of high quality service is often perceived to be of fundamental importance in retailing.
In the retail context, when customers evaluate retail service, they compare their perceptions of the service they receive with that of their expectations. Customers are seemed to be satisfied only when the perceived service meets or even exceeds their expectations. However, they are dissatisfied when they feel that the service falls below their expectations (Levy and Weitz, 2005).
To date, Parasuraman et al. (1988) believe that many studies on service quality relied on service quality construct and scale. Nevertheless, Kaul (2005) and Dabholkar et al. (1996) argue that this application to the retail industry may not be appropriate for service quality in retailing industry as the latter seems to be different from other services. In retail setting, where there is a mix of product and service, retailers are prone to have impact on service quality more than on product quality (Dabholkar et al. , 1996). Hence, since retailers can create such effects, service quality plays a significant strategic role in creating quality perceptions.