The Investigation in Service Quality Management of 3G Business for Telecom Operators

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2 The Investigation in Service Quality Management of 3G Business for Telecom Operators Jian Shen 1 School of Economics and Management Beijing University of Posts and Telecommunications Key Account Center China United Network Telecommunications Corporation Beijing Branch Hong Zhu 3 Marketing Department China Telecom Corporation Limited Beijing Branch Shoulian Tang 2 School of Economics and Management Beijing University of Posts and Telecommunications Abstract 3rd generation mobile communication networks (3G) have been heralded as a great shift that will make the market competition to be fierce increasingly. In this situation, the telecom operators are improving service quality to develop 3G users. Based on the discussion of the basic principle of Customer Perceived Service Quality Model and SERVQUAL Model, this paper has improved them for the characteristics of the telecom industry. Finally, this paper has described the content of service quality management and put forward the parameters System in 3G era. Keywords: Service quality management, Telecom operators, 3G era I. INTRODUCTION As the 3G business of China Unicom has became the commercial service on Oct. 1st in 2009, the telecommunications industry of China had totally stepped into the 3G era. In the end of 2009, the number of the 3G users had reached 15 million. Refer to the growth rate, it can be seen that the size of the amount of the new 3G users per month enlarges obviously, which has improved rapidly from more than 1 million on Sept. to more than 2 million on Nov..In the monthly new mobile subscribers, the 3G users account about 25%. There exists data indicating that the sizing development trend of the national 3G users becomes obvious. In this situation, all of the three largest telecom operators take improving the service standard and strengthening the service quality management as main means to exploit 3G business market and attract 3G users. In 1982, the Swedish famous service market selling expert Christian Gronroos proposed the Customer Perceived Service Quality Model. The quality is evaluated by the customers is the core of the model. It actually requires the service provider evaluates and manages the service quality from the perspective of the customers, which adapts to the customers centered modern marketing and selling trend and have special guidance significance in the more and more fierce competition in the 3G market. In 1988, the American market selling experts Parsu Parasuraman, Valarie Zeithaml and Leonard Berry proposed a new service quality evaluation system according to the Total Quality Management (TQM) theory, namely SERVQUAL model. The core of the theory is the service quality gap model, which means the service quality depends on the difference extent between the actual feeling and the expecting service quality of the customers. The quality service is divided into 5 entity levels in the SERVQUAL model: tangibles, reliability, responsiveness, assurance and empathy. This model embodies significant meaning directing the operators researches on how to strengthen the service quality in 3G era. The Customer Perceived Service Quality model and the SERVQUAL model are both fundamental theories in the domain of service quality management. And all of the telecom operators deem the service quality management improvement as the main method and strong guarantee. As a result, how to employ the two theories in 3G service is a new subject. On the basis of researching on the fundamental theories of the two models and aiming at the characteristics of the telecom industry, this paper gives intensively analysis and interpretations of the two models in the application on the telecom industry especially the 3G service. Moreover, this paper complements the related theory content and proposes the service quality management connation and the management parameter system. II. CUSTOMER PERCEIVED SERVICE QUALITY MODEL In the Customer Perceived Service Quality model proposed by Parasuraman, the customer-felt service quality finally (perceived quality) depends on the psychologicalexpected service quality before accepting the service (expected quality) and the actually experienced service quality in the process of receiving the service (empirical quality). If the empirical quality is superior to the expected quality, the perceived quality is acceptable. While the expectation of the customer is unfulfilled which means the empirical quality is /10/$ IEEE

3 inferior to the expected quality, the customer perceived quality is unacceptable. On the other hand, the empirical quality is determined by the technical quality and the functional quality. The technical quality is the objective consequence the customer received in the end of the producing and serving process; while the functional quality is the subjective feeling experienced by the customer through mutual contact. In the telecom industry, the expected quality exhibits as service quality level subjectively considered or expected by the customer. The level of the expected quality is affected by the advertising and publicity of the telecom operators, the customer requirement as well as their impressions on the service quality of the other telecom operators, etc. The technical quality is the objectively accepted technical service level, such as 3G network coverage, the connection quality and the download speed, etc. The functional quality is the subjective perception when dealing with and utilizing of 3G services, such as the service handling waiting time, the marketing staff s attitude towards the customers and the complaint satisfaction rate, etc. The production process of the operator communication service products and the consumption process of the customers is the same process, which is the biggest difference comparing to the production and distribution process of the tangible product. The two processes begin and finish at the same time, namely, the production process and the consumption process are with identity. The characteristic also leads to the irreversibility in the communication service product transaction. Once the service product is provided, it will not be returned, which is an one-way one way process. It can be seen that the communication product selling process is the beginning for serving the costumers. As a result, providing high quality service in the customer consumption process is the main factor affecting the functional quality. According to the above mentioned characteristics, this paper has completed the Parasuraman s Customer Perceived Service Quality model and proposes that the function quality should be composed of selling quality and the service quality while the expectation quality should be composed of the customer requirement and the compared quality. As Figure 1 below: Selling Quality is the subjective feeling of customers during 3G service transaction, such as long waiting period of service subscription, professional level of marketing staff copping with the questions of customer, attitude on customers etc. The level of this quality will firm or weaken the purchase desire of customers and directly impact the development of 3G business. And Service Quality is the subjective feeling of customer in using 3G business, such as 3G hotline phone service success rates, complaint handling period, and satisfaction rate of 3G business complaints and inquiry etc. This quality will determine whether the telecom operators can retain customer keep their telephone numbers, being of the main factor to influence the function quality. Customer Requirement is the urgent degree of customer using 3G business, the stronger of the demanding the higher quality desired. Compared Quality is the service quality level of competitive opponent, the higher the service quality of competitive opponent, the higher of customer s expectation quality, and vice versa. Under the current fierce market competition, compared service quality has gradually become the main factor to influence the expectation quality. III. SERVQUAL MODEL SERVQUAL model indicates the desire of customers is the precondition to carry out quality service, and the key to supply quality service is to ensure the customer can really feel the quality of service is better than their expectation quality. This model will divide the service quality into five aspects, as followed: Reliability - ability to perform service dependably and accurately Responsiveness - willingness to help and respond to customer need Assurance - ability of staff to inspire confidence and trust Empathy - the extent to which caring individualized service is given Tangibles - physical facilities, equipment, staff appearance, etc. Each layer is sub-divided into 22 specific factors. By questionnaire, the customers evaluate the expectation value, actual feeling value and minimum acceptance value of each factor, and the final score of service quality is computed with the weight of each factor. This model from another point of view describes the relationship between expectation quality and experience quality in Customer Perceived Service Quality Model. By the method above, the specific value of perceived quality is computed. As Figure 2 below: Figure 1 Customer Perceived Service Quality Model

4 Figure 2 SERVQUAL Model SERVQUAL model has great instructive meaning for the service quality management of telecom industry. Especially after entering into 3G era, five layers of this model have new meanings. Reliability - The major advantage of 3G technology lies in high speed digital download and upstream rate. Therefore, it s important to build quality network and supply customer with stable, fast digital transmission rate. 3G technology greatly enriches the service types and enhances the requirement to service level accordingly. Therefore, to improve level of operation and maintenance and do our best to fulfill the promise of product to customer is the major expression on reliability. Responsiveness - 3G technology compared with 2G technology is a revolution. Data service will replace the traditional voice service becoming the key for telecom operators development and application of customers. In the following, there will be the changing of user s habit and explore of operators on network optimization and service mode, therefore, customer hotline timely responding customers inquiry and complaint on 3G business is the key measure to improve the service quality. Assurance - Under the circumstance that most customers have no idea about 3G service, through marketing staff and technical ways to build the trust relationship between telecom operators and customer is very important. Abundant professional knowledge of marketing staff and practical operation level can make the customer feel the advantage of 3G service. Simple charging rule and flow rate short message notifying etc can dispel the worry of customers about 3G service. Empathy - Every customer hopes to feel the understanding and highly thinking of telecom operators on him. 3G technology enriches the technical measures and service types of telecom operators. It is completely realizable to provide the customer especially the group customer with the product and service suitable for their characteristic by formulating comprehensive communication solution to meet the personalized requirement of customer. Tangibles - Feature of 3G technology high speed data transmission can be visually expressed only by practical demonstration. Therefore, building a 3G business demonstration hall distinguishing from ordinary business hall is very important. In the 3G business demonstration hall, customer can listen to the introduction of professional on 3G business and experience video call, mobile online and online HD movie appreciation through 3G cell phone, wireless network modem and notebook etc. IV. INTRINSIC VALUE OF SERVICE MANAGEMENT IN 3G ERA A. Service Management in 3G Era To improve service level and enrich the content of service are always the key measures for telecom operators retaining existing customers and attracting new customers. In facing the great chance of development introduced by 3G service, telecom operators shall take full advantage of the network technology, improve the 3G service capacity, innovate 3G service mode, intensify service quality management for the whole process of 3G service, provide the customers with convenient, effective and higher quality service than the opponent and realize the advanced strategic goal of 3G service. The intrinsic value of service quality management for telecom operators in 3G era is to control and improve the key parameters during the whole process of business development and customer service; and through improving the quality of technology and function, enhance the overall service capacity of 3G business, realize the customer experience quality being higher than expectation quality, on the basis of which to form the service-oriented enterprise culture. B. Parameter System of 3G Business Service Management Aiming at the whole process of development and service of 3G business, this paper proposed 3G business service management parameters system. This parameters system is formed by 22 parameters and six aspects as network reliability, business quality, charging accuracy, terminal guarantee, fast service and efficient complaint handling. All parameters are based on the five layers of SERVQUAL model taking account of technology quality and function quality, ensuring customer experience quality being higher than expectation quality, realizing the maximization of customers final perceived quality. Specified as followed: Network Reliability: (1) 3G network service rate (2) 3G network success rate (3) 3G network drop call rate (4) International roaming user access success rate Quality Business: (5) Video call connecting success rate (6) WAP, JAVA, stream media business success rate (7) 3G network up/downstream data transmission rate Identify applicable sponsor/s here. (sponsors)

5 Charging Accuracy (8) Charging error rate (9) Realizing flow rate initiative notifying service (10) Realizing charging initiative notifying service Terminal Quality Adapting: (11) Custom-built terminal repair rate (12) Autonomous terminal business adaptation rate (13) Terminal remote parameter setting success rate Convenient Service: (14) 3G customer business transaction period in business hall (15) 3G service online service satisfaction rate (16) E-channel self-service success rate (17) 3G customer feature club (18) 3G member VIP service Efficient Complaint Handling: (19) 3G customer service hotline access rate (20) Customer 3G service complaint handling time limit (21) Customer 3G service inquiry satisfaction rate (22) Customer 3G service complaint satisfaction rate For the relation between the 22 parameters above and five layers of SERVQUAL model, see table 1. TABLE I. layers RELATION BETWEEN PARAMETERS AND LAYERS parameters Reliability (1) (2) (3) (4) (11) (12) (13) Responsiveness (19) (20) (21) (22) Assurance (8) (9) (10) Empathy (14) (15) (16) (17) (18) Tangibles (5) (6) (7) The 22 parameters above correspond one of the layers of SERVQUAL model separately. Author of this paper thinks, in design and specific parameter examination, attention shall be paid to Reliability, Responsiveness and Empathy. Because, the Reliability can mostly express the great advantage of 3G technology compared with 2G, and it is the reflection of technology quality in Customer Perceived Service Quality Model. And Responsiveness and Empathy reflecting the operators is standing on the view of customer to meet the personalized requirement, attitude on customer s problem solving, which are the reflections of function quality. V. SUMMARY AND CONCLUSIONS Customer Perceived Service Quality Model proposes the customer s final perceived quality is determined by the expectation quality and experience quality, and SERVQUAL model clarifies which aspect need to be intensified with service quality management. Two models have great instructive meaning for the three domestic operators who are vigorously promoting 3G business. This paper is from the view of telecom industry to analyze and research the theories of Customer Perceived Service Quality Model and SERVQUAL model, making a supplement on the basis of the features of telecom industry and 3G business and describing the new meaning of the two models in 3G era. To put the theory into specified operable measures, this paper states the intrinsic valve of service quality management in 3G era and proposes the parameter system aiming to intensifying the 3G service quality management with the two models. Therefore it has instructive meaning to intensify the service quality management and improving service level for the domestic telecom operators in 3G era. References [1] Gronroos, Christian. Service Management and Marking. Lexington Books,1990 [2] Gronroos, C.Sevice management and Maeking: A Customer Relationship Management Approach. John Wiley &Sones, Inc, 200 [3] Parasuraman A. Valarie A.Zeithaml, and leonard L.Berry, A Conceptual Model of Service Quality and Its Implications for Future Research, Journal of Marketing, Fall, 1985, 49, (3):41-50 [4] Parasuraman A. Valarie A.Zeithaml, and leonard L.Berry, Quality Counts in Service. Too, Business Horizons, 1985 [5] N. Houssos, E.Gazis, S. Panagiotakis, etc. Value Added Service management in 3G network, Service Management, Session Twelve, 2002 [6] J.J.Cronin and S.A.Taylor, SERVPERF Versus SERVQUAL: Reconciling Performance-Based Perception-Minus-Expectations Measurement of Service Quality, Journal of Marketing, volume 58, January 1994

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