Evolution of service quality

Transcription

1 SSME Certification Module 2 SPJIMR and IBM Evolution of service quality (Please view in presentation mode for desired flow of information) (In pdf version every animation is one slide, so don t we worried about the slide count) Anshu Jain IBM Research - India [email protected] 2009 IBM Corporation

2 Ice breaker SSME Certification Program by SPJIMR & IBM Who am I? Researcher: IT Service Management Research Not a Service Scientist. Yet Service Industry Experience Not more than 2.5 years Trying to learn from the experts Goals for today? Understand how some people define service quality Understand how some people measure service quality Information Dissemination.. Intellectual Ammunition Leave you with some questions may be an aha moment!! I am here to learn. Please make it as interactive Evolution of Service Quality: Slide 2 of 77 2

3 Ice breaker SSME Certification Program by SPJIMR & IBM Who are you? What is the service you are engaged in? What is service quality to you or may be just what is quality to you? Evolution of Service Quality: Slide 3 of 77 3

4 Expectation setting SSME Certification Program by SPJIMR & IBM Reliability Reliable for most part, since based on extensive literature survey, all personal observations annotated so Assurance Cannot assure you that will have all answers. Nature of subject allows great amount of vagueness though (Lets beware.!!.. And be thankful ) Tangibles This presentation.. On service quality evolution: Tangibly yours (under creative commons license) immediately after this talk Content may be a bit redundant, but hopefully a fresh perspective Empathy If you feel clueless at times, and wonder what all the SQ fuss is about I empathize. Responsiveness I will continue to share any info I have gained as a result of my literature survey with you, if you seek so.. [email protected] Welcome to the R.A.T.E.R scale which you will soon see, is one popular way to evaluate quality of service. (in this case.. the service of presenting the service quality story to you) Evolution of Service Quality: Slide 4 of 77 4

5 Getting started If you are very serious Take a crash course on Designing Surveys Buy this Evolution of Service Quality: Slide 5 of 77 5

6 Definition Evolution of Service Quality: Slide 6 of 77 6

7 Definition A quality (from Latin qualitas [1] ) is an attribute or a property. Attributes are ascribable, by a subject, whereas properties are possessible [2]. Some philosophers assert that a quality cannot be defined [3]. In contemporary philosophy, the idea of qualities and especially how to distinguish certain kinds of qualities from one another remains controversial Evolution of Service Quality: Slide 7 of 77 7

8 Definition A quality (from Latin qualitas [1] ) is an attribute or a property. Attributes are ascribable, by a subject, whereas properties are possessible [2]. Some philosophers assert that a quality cannot be defined [3]. In contemporary philosophy, the idea of qualities and especially how to distinguish certain kinds of qualities from one another remains controversial Measure of excellence or state of being free from defects, deficiencies, and significant variations. ISO standard defines quality as "the totality of features and characteristics of a product or service that bears its ability to satisfy stated or implied needs. Evolution of Service Quality: Slide 8 of 77 8

9 Definition A quality (from Latin qualitas [1] ) is an attribute or a property. Attributes are ascribable, by a subject, whereas properties are possessible [2]. Some philosophers assert that a quality cannot be defined [3]. In contemporary philosophy, the idea of qualities and especially how to distinguish certain kinds of qualities from one another remains controversial Measure of excellence or state of being free from defects, deficiencies, and significant variations. ISO standard defines quality as "the totality of features and characteristics of a product or service that bears its ability to satisfy stated or implied needs. Evolution of Service Quality: Slide 9 of 77 9

10 Definition A quality (from Latin qualitas [1] ) is an attribute or a property. Attributes are ascribable, by a subject, whereas properties are possessible [2]. Some philosophers assert that a quality cannot be defined [3]. In contemporary philosophy, the idea of qualities and especially how to distinguish certain kinds of qualities from one another remains controversial Measure of excellence or state of being free from defects, deficiencies, and significant variations. ISO standard defines quality as "the totality of features and characteristics of a product or service that bears its ability to satisfy stated or implied needs. Instruments that record analyses summarize organize debate and explain information which are illustrative nonillustrative hardbound paperback jacketed non-jacketed with forward introduction, table of contents, index that are indented for the enlightenment, understanding enrichment enhancement and education of the human brain thru sensory root of vision... sometimes touch Evolution of Service Quality: Slide 10 of 77 10

11 Funsuk Wangdu s Definitions Quality is excellence Quality is getting what you want Quality is making customer happy. So on And by extension Service Quality Evolution of Service Quality: Slide 11 of 77 11

12 On a serious note SSME Certification Program by SPJIMR & IBM Garvin s attempt in context of products and manufacturing 5 Approaches Transcendental Approach of Philosophy Product-based approach of economics User-based approach of economics, marketing, and operations management Manufacturing-based approach Value-based approach of operations management Reeves and Bednar 10 years later Quality is Excellence (transcendental) Quality is Value (value-based) Quality is Conformance to Specifications (product and manufacturing based) Quality is Meeting and/or Exceeding Customers' Expectations (user-based) Common observation: There is no all encompassing definition \Different Circumstances, Different services, Different stages, Different Stakeholders Evolution of Service Quality: Slide 12 of 77 Garvin, D. (1984). What Does "Product Quality" Really Mean?. Sloan Management Review, 26(1),

13 Quality is Excellence SSME Certification Program by SPJIMR & IBM Evolution of Service Quality: Slide 13 of 77 13

19 Quality is Excellence SSME Certification Program by SPJIMR & IBM An abstract notion.. of superlative. Anything less than excellence is not quality Evolution of Service Quality: Slide 19 of 77 19

22 Quality is Excellence SSME Certification Program by SPJIMR & IBM An abstract notion.. of superlative. Anything less than excellence is not quality Applies more to art forms where unique preferences help pick excellence Evolution of Service Quality: Slide 22 of 77 22

23 Quality is Value SSME Certification Program by SPJIMR & IBM Evolution of Service Quality: Slide 23 of 77 23

26 Quality is Value SSME Certification Program by SPJIMR & IBM $$$=1000 Evolution of Service Quality: Slide 26 of 77 26

27 Quality is Value SSME Certification Program by SPJIMR & IBM $$$=1000 $=10 Evolution of Service Quality: Slide 27 of 77 27

28 Quality is Value SSME Certification Program by SPJIMR & IBM $$$=1000 $=10 Evolution of Service Quality: Slide 28 of 77 28

29 Quality is conformance to specification Evolution of Service Quality: Slide 29 of 77 29

32 Quality is Meeting and/or Exceeding Customers' Expectations Complementary meal on-board first class Complementary Meal on low cost airline Evolution of Service Quality: Slide 32 of 77 32

35 Before the bang Around 1977 Quality was widely discussed in literature in individual context industry, healthcare, product, life, water etc. Search on google scholar Satisfaction had been quite rightly observed and analyzed as linked with (measure of) quality. Search on google scholar Product quality was already being evaluated as being a difference of perceptions and expectations Olshavsky, Richard W. and John A. Miller (1972), Consumer Expectations, Product Performance and Perceived Product Quality, Journal of Marketing Research, 9 (February), Evolution of Service Quality: Slide 35 of 77 35

36 Differentiating Services A Marketing Need Seminal Paper : Breaking from Product Marketing 1977 G. Lynn Shostack, then VP of Citibank, NY. Marketing Director, Investment Management Group Inspired by Frequent failure of product marketers in services All seminal marketing literature based on products, manufacturing Emerging services economy in U.S Key concepts A new marketing mix Tangible/Intangible Dominant Focus on evidence of services Marketing Mix: 7ps Product, Price, Place, Promotion Traditional People, Physical Evidence, Processes Service Dominant Evolution of Service Quality: Slide 36 of 77 Also Read: Evolving to a New Dominant Logic for Marketing - Stephen L. Vargo Robert F. Lusch 36

37 Concern on differentiating services CHIP Evolution of Service Quality: Slide 37 of 77 37

38 Concern on differentiating services CHIP Evolution of Service Quality: Slide 38 of 77 Source: Zeithaml, Valarie A., A. Parasuraman, and Leonard L. Berry (1985), Problems and Strategies in Services Marketing, Journal of Marketing, 49 (2),

39 Market Entities on a Tangibility Scale Salt Soft Drinks Detergents Automobiles Cosmetics Fast Food Outlets Intangible Dominant Tangible Dominant Fast Food Outlets Advertising Agencies Airlines Investment Management Consulting Teaching Tangible Dominant cosmetics Tangible Evidence Scales of market entities fastfood outlets airlines Intangible Dominant Intangible Image Principles of market positioning emphasis Evolution of Service Quality: Slide 39 of 77 39

40 Intangibles in Product Quality A first attempt to address the intangibles around a product Inspired by the Clothing Industry Instrumental Outcome: Durability Color Expressive Outcome Style Fashion Instrumental: Taken for granted. Part of specification Responsible for dissatisfaction Expressive: Implicit expectations. Differentiation Responsible for satisfaction Evolution of Service Quality: Slide 40 of 77 Swan, J., & Combs, L. (1976). Product Performance and Consumer Satisfaction: A New Concept. Journal of Marketing, 40(2),

41 Early Eighties Gronroos Model Early Service Quality Model Gronroos (1982,84) Inspired from the product performance literature Instrumental performance is necessary but NOT sufficient for a satisfied customers Evolution of Service Quality: Slide 41 of 77 41

42 Early Eighties Gronroos Model Early Service Quality Model Gronroos (1982,84) Inspired from the product performance literature Instrumental performance is necessary but NOT sufficient for a satisfied customers Instrumental Performance Product Performance Expressive Performance Inspiration for Gronroo Product performance and customer satisfaction JE Swan, LJ Combs - Journal of Marketing, 1976 Evolution of Service Quality: Slide 42 of 77 42

43 Early Eighties Gronroos Model Early Service Quality Model Gronroos (1982,84) Inspired from the product performance literature Instrumental performance is necessary but NOT sufficient for a satisfied customers Technical Nature - what Instrumental Performance Product Performance Expressive Performance Inspiration for Gronroo Product performance and customer satisfaction JE Swan, LJ Combs - Journal of Marketing, 1976 Evolution of Service Quality: Slide 43 of 77 43

44 Early Eighties Gronroos Model Early Service Quality Model Gronroos (1982,84) Inspired from the product performance literature Instrumental performance is necessary but NOT sufficient for a satisfied customers Technical Nature - what Instrumental Performance Product Performance Expressive Performance Inspiration for Gronroo Product performance and customer satisfaction JE Swan, LJ Combs - Journal of Marketing, 1976 Psychological nature - how Evolution of Service Quality: Slide 44 of 77 44

45 Early Eighties Gronroos Model Early Service Quality Model Gronroos (1982,84) Inspired from the product performance literature Technical Nature - what Product Performance Psychological nature - how Instrumental performance is necessary but NOT sufficient for a satisfied customers Instrumental Performance Expressive Performance Inspiration for Gronroo Product performance and customer satisfaction JE Swan, LJ Combs - Journal of Marketing, 1976 What can be easily specified in requirements how cannot. Technical quality: measure of deviation from requirements Functional quality: measure of deviation from customers happiness Above 2 defintions are my own observation not gronroos..!! Evolution of Service Quality: Slide 45 of 77 45

46 Early Eighties Gronroos Model Early Service Quality Model Gronroos (1982,84) Inspired from the product performance literature Technical Nature - what Product Performance Psychological nature - how Instrumental performance is necessary but NOT sufficient for a satisfied customers Instrumental Performance Expressive Performance Inspiration for Gronroo Product performance and customer satisfaction JE Swan, LJ Combs - Journal of Marketing, 1976 What can be easily specified in requirements how cannot. Technical quality: measure of deviation from requirements Service Quality Functional quality: measure of deviation from customers happiness Above 2 defintions are my own observation not gronroos..!! Technical Quality Functional Quality Gronroos two factor model of service quality Evolution of Service Quality: Slide 46 of 77 46

47 Early Eighties Gronroos Model Early Service Quality Model Gronroos (1982,84) Inspired from the product performance literature Technical Nature - what Product Performance Psychological nature - how Instrumental performance is necessary but NOT sufficient for a satisfied customers Instrumental Performance Expressive Performance Inspiration for Gronroo Product performance and customer satisfaction JE Swan, LJ Combs - Journal of Marketing, 1976 What can be easily specified in requirements how cannot. Technical quality: measure of deviation from requirements Functional quality: measure of deviation from customers happiness Above 2 defintions are my own observation not gronroos..!! Outcome of a service Raison d'être Technical Quality Service Quality Functional Quality Gronroos two factor model of service quality Evolution of Service Quality: Slide 47 of 77 47

48 Early Eighties Gronroos Model Early Service Quality Model Gronroos (1982,84) Inspired from the product performance literature Technical Nature - what Product Performance Psychological nature - how Instrumental performance is necessary but NOT sufficient for a satisfied customers Instrumental Performance Expressive Performance Inspiration for Gronroo Product performance and customer satisfaction JE Swan, LJ Combs - Journal of Marketing, 1976 What can be easily specified in requirements how cannot. Technical quality: measure of deviation from requirements Functional quality: measure of deviation from customers happiness Above 2 defintions are my own observation not gronroos..!! Outcome of a service Raison d'être Technical Quality Service Quality Functional Quality Gronroos two factor model of service quality Process of a service Evolution of Service Quality: Slide 48 of 77 48

49 Early Eighties Gronroos Model Early Service Quality Model Gronroos (1982,84) Inspired from the product performance literature Technical Nature - what Product Performance Psychological nature - how Instrumental performance is necessary but NOT sufficient for a satisfied customers Instrumental Performance Expressive Performance Inspiration for Gronroo Product performance and customer satisfaction JE Swan, LJ Combs - Journal of Marketing, 1976 What can be easily specified in requirements how cannot. Technical quality: measure of deviation from requirements Functional quality: measure of deviation from customers happiness Above 2 defintions are my own observation not gronroos..!! Outcome of a service Raison d'être Technical Quality Service Quality Functional Quality Gronroos two factor model of service quality Process of a service Environment of a service Evolution of Service Quality: Slide 49 of 77 Source: Grönroos, Christian (1982), A Service Quality Model and Its Marketing Implications, European Journal of Marketing, 18 (4),

50 Early Eighties Gronroos Model Third Factor: Corporate Image Formed over period of time Changes expectation and thus perceived quality Does not propose any measurement technique Just a conceptual model Evolution of Service Quality: Slide 50 of 77 Source: Grönroos, Christian (1982), A Service Quality Model and Its Marketing Implications, European Journal of Marketing, 18 (4),

51 Three component model Rust and Oliver 1994 Service Product = Technical Quality predominantly intangible predominantly process rather than things often variable in quality because commonly produced and consumed simultaneously Service Delivery = Functional Quality Service Environment = Functional Quality Measurement using Conjoint Analysis Evolution of Service Quality: Slide 51 of 77 Source: Rust, Roland T. and Richard L. Oliver (1994), Service Quality: Insights and Managerial Implications from the Frontier, in Service Quality: New Directions in Theory and Practice 51

52 Its all the same perhaps Factor 1 Factor 2 Shostack Tangible Intangible Swan n Combs Instrumental Expressive Groonroos Technical Functional Rust, Oliver Service Product Service delivery, Environment What do you measure Deviation from requirements Deviation from happiness Customer Involvement Needs no customer feedback Constant customer feedback Evolution of Service Quality: Slide 52 of 77 52

53 Exercise Where is your service in the tangibility scale? Can you plot yourself on the two diagrams above? Do you see a scope to change your positioning by changing the marketing mix? Evolution of Service Quality: Slide 53 of 77 53

54 Quality as Gap between Expectation and Perception Evolution of Service Quality: Slide 54 of 77 54

55 The Gap Problem: The Classic Example Evolution of Service Quality: Slide 55 of 77 55

56 The Gap Problem: The Classic Example Evolution of Service Quality: Slide 56 of 77 56

57 Gaps Model 1980s/90s A very insightful model to clearly articulate various distinct areas within a complete service delivery experience which can impact quality Evolution of Service Quality: Slide 57 of 77 57

58 Gaps Model 1980s/90s expectation levels to be constant in most cases. A very insightful model to clearly articulate various distinct areas within a complete service delivery experience which can impact quality Evolution of Service Quality: Slide 58 of 77 58

59 Gaps Model 1980s/90s expectation levels to be constant in most cases. Problem with the gap model is that before gaps the absolutes need to be measured A very insightful model to clearly articulate various distinct areas within a complete service delivery experience which can impact quality Evolution of Service Quality: Slide 59 of 77 Source: Parasuraman, A.,Valarie A. Zeithaml, and Leonard L. Berry (1985), A Conceptual Model of Service Quality and Its Implications for Future Research, Journal of Marketing, 49 (Fall),

60 Mid eighties till date SERVQUAL variants Started as 97 item scale Down to 22 items Each rated on a 7 point scale (strongly agree blah blah strongly disagree..) Grouped within 5 first order dimensions RATER Too much has already been said about SERVQUAL SERVPERF eliminates expected services Most popular, but also most criticized Evolution of Service Quality: Slide 60 of 77 Source: Parasuraman, A.,Valarie A. Zeithaml, and Leonard L. Berry (1991), Refinement and Reassessment of the SERVQUAL Scale, Journal of Retailing, 67 (4),

61 SERVQUAL Criticism SSME Certification Program by SPJIMR & IBM Service Quality or Customer Satisfaction Since it only talks of the evidence Length of Questionnaire: 22 items to rate twice. Boring..!! Timing of Questionnaire: Expectations may be solicited after the experience, which can impact the expectations Use of Likert scale: 7 point scale, (unlike 5 point normally used.) Labelling of each point on the scale is critical Differential scores: Assumes linearity: 6-7 = 1-2. But is it real the same Assumes generic applicability to all services Static nature of model: In long term service encounters both expectations and perceptions change Intangible outcomes are not factored Would highly recommend reading the source sighted below Evolution of Service Quality: Slide 61 of 77 Source: Buttle, Francis, European journal of marketing.1995 SERVQUAL: review, critique,research agenda 61

62 Multilevel Model SSME Certification Program by SPJIMR & IBM Customers break service quality dimensions into various subdimensions. Hierarchical model Not much effort spent on identifying generic dimension Evolution of Service Quality: Slide 62 of 77 Source: Dabholkar, Prathiba, Dayle I. Thorpe, and Joseph O. Rentz (1996), A Measure of Service Quality for Retail Stores, Journal of the Academy of Marketing Science, 24 (Winter),

63 Hierarchical Model - Brady and Cronin Think of it as mixed salad Build on top of multilevel model and the three component model reinforced by several works in literature Qualitative study to find the distinct recurring sub dimensions Develops hypothesis for the dimensions so found (aided by subsequent literature survey) Incorporates ServQual Factors in an interesting way Evolution of Service Quality: Slide 63 of 77 Some New Thoughts on Conceptualizing Perceived Service Quality: A Hierarchical Approach Authors: Michael K. Brady & J. Joseph Cronin Jr. The method 63

64 A Dynamic Multistage Model Bolton and Dreq Incorporate Changing Expectations (over repeat encounters) in Three Stages: the performance assessment the service quality the service value Organizational attributes Service attributes / dimensions (SA) Personal needs, word-of-mouth, past experiences Disconfirmation (DISCONFIRM) Engineering attributes Personal needs, word-of-mouth, past experiences Expectations (EXPECT) Customer Satisfaction Service Quality (QUALITY) Service Value (VALUE) Sacrifice Intentions Customer Characteristics Behavior Evolution of Service Quality: Slide 64 of 77 Source: Bolton, R., & Drew, J. (1991). A Multistage Model of Customers' Assessments of Service Quality and Value. Journal of Consumer Research, 17(4),

65 Some personal observations Concentrating on evidence against image for service marketing though counterintuitive, suggests that customers get affected by evidence Evidence can be used to value price Core service should be used to determine the cost Initial myth of service quality: Difference of the outcome from the requirement Requirements are subject to change during the course of experience.expectations.and thus perceptions Still not clear.. Dynamic nature of service quality models Service Products is not the tangible product. Service product is the sum of the intangible outcomes which are the core output of the service Thus to create a service product around TEACHING is not impossible. (don t think books and cd s) Lot more Literature on describing service characteristics which these works build on. Skipped here for lack of time and space. Particularly service blueprinting, service encounters, and recently service design and monitoring. Administrating surveys is MUCH MUCH more than just creating questions and aggregating results Thank you for your patience.. Cheers Evolution of Service Quality: Slide 65 of 77 65

66 Challenges.. Research Problems.. Questions Products and Services..is there a difference Can we replace or augment surveys Detect consumer satisfaction rather than ask Cognitive Science, Behavioral Science Applications of existing technologies Deep Analytics.. customer history, customer return rate, customer habits, customer demographics Mathematical and Computer science application Standard representations of services and service quality metrics Multi attribute optimizations Machine learning, Predictive algorithms Can we incorporate these conceptual models into SLAs? Evolution of Service Quality: Slide 66 of 77 66

67 Getting started Source of literature Main avenues of publications: Journal of Marketing European Journal of Marketing Journal of Marketing research Journal of Retailing Management Information Science Journal. Evolution of Service Quality: Slide 67 of 77 67

68 Ending on a unrelated (slightly) note : Continuing to tread the path well known The path with assured returns The path which gives incremental success Talking first about "why things won't work".. before "why things will work Sounds familiar?? Orbit Shifting Innovation Connection: Several interesting service business model Evolution of Service Quality: Slide 68 of 77 68