Service Quality in the Hair Salon Industry

Journal of Business Disciplines Indiana University Southeast 1527-151X/Vol. I (2000) Printed in U.S.A. Service Quality in the Hair Salon Industry L. Jean Harrison-Walker 1 Introduction As the economic base of the United States becomes more and more service oriented and businesses become increasingly consumer oriented, marketing managers are expressing their interest in being able to evaluate (and consequently improve) the quality of service they provide to their customers. Over the last decade, market researchers have attempted to address the needs of marketing managers by developing and refining scales to measure service quality. Perhaps the most widely recognized service quality instrument is the SERVQUAL scale developed by Parasuraman, Zeithaml, and Berry (1988). While there appears to be considerable consensus regarding the reliability and usefulness of the SERVQUAL scale, a number of concerns have been raised. One concern relates to the use of difference scores (e.g., the difference between the quality of service expected by consumers and the quality received from the service provider) to measure service quality. Another concern relates to the lack of consensus regarding the number of components that comprise the service quality construct. Cronin and Taylor (1992) address the first concern by introducing the SERVPERF scale, a performance-only measure of service quality. The second concern regarding the number of components remains. Based on a review of the literature, it appears that the number of components comprising the service quality construct varies by industry. However, before research can be used to examine how characteristics of an industry determine the number of components that comprise service quality, data must be available from service industries that represent each possible combination of service industry characteristics. The purpose of this paper is to examine the components of service quality using data collected from the hair salon industry, an industry having characteristics that may be substantively different 1 Jean Harrison-Walker is an Assistant Professor of Marketing at University of Houston Clear Lake.

38 JOURNAL OF BUSINESS DISCIPLINES from industries examined to date. That is, hair salon services (1) involve tangible actions, (2) are directed at people s bodies rather than at goods or other physical possessions, (3) typically require that providers exercise considerable judgment in meeting individual consumer needs, and (4) are high in experience (rather than credence) qualities (see Lovelock 1991). The paper is presented in four parts. First, the literature regarding the measurement of service quality is briefly reviewed. Second, the selection of the hair salon industry for data collection is justified. Next, the number of components (dimensionality) of service quality is tested with data from the hair salon industry. Finally, implications of the empirical findings are discussed. The Measurement of Service Quality Parasuraman, Zeithaml, and Berry (1988) define perceived service quality as "the customer's judgment about an entity's overall excellence or superiority," and suggest that perceived service quality is an attitude that results from a comparison of initial expectations of the service performance and the perception of the service performance. The SERVQUAL scale, an instrument designed to assess "consumer perceptions of service quality in service and retailing organizations," is composed of 22 items said to load on five components or dimensions (Parasuraman, Zeithaml, & Berry, 1988). Tangibles: Physical facilities, equipment, and appearance of personnel Ability to perform the promised service dependably and accurately Willingness to help customers and provide prompt service Knowledge and courtesy of employees and their ability to inspire trust and confidence Caring, individualized attention the firm provides its customers Each of the 22 items is used twice, once to measure Reliability: Responsiveness: Assurance: Empathy: expectations and once to measure perceived performance. The authors use a 7-point Likert-type scale to collect the data and then measure service quality as the difference between expectations and performance. Alpha, a widely accepted measure of the internal reliability of the items in a scale, ranged between.72 and.86, suggesting acceptable scale reliability.

Harrison - Walker: 39 Service Quality in the Hair Salon Industry Concerns About Difference Scores and Dimensionality While scale reliability appears to be acceptable, the reliability of the computed difference scores is suspect. More specifically, Peter, Churchill, and Brown (1993) criticize the use of difference scores in general for having low reliability when the two components are correlated. The scores from expectations and performance are correlated because the items used to measure expectations are nearly identical to the items used to measure performance. The stronger the correlation, the lower the difference score reliability. Low reliability can then produce a diffuse factorial structure. In fact, a number of studies that have been conducted since the introduction of SERVQUAL show that the number of dimensions of service quality varies considerably. For example, depending upon the study, service quality has been shown to be unidimensional, or have two, three, four, five, six, or seven factors (Cronin & Taylor, 1992, 1994; Gagliano & Hathcote, 1994; Lam, 1995a, 1997; Mels, Boshoff, & Nel, 1997; Pitt, Watson, & Bruce, 1995; Triplett, Yau, & Neal 1994; Vandamme & Leunis, 1993). In a recent study, Llosa, Chandon, and Orsingher (1998) find that in a free classification exercise where respondents are asked to sort the SERVQUAL items into groups, the number of dimensions can vary between two and thirteen. When respondents are asked to sort the 22 SERVQUAL items into five dimensions, the number of misplaced items ranges from 4 to 13. Interestingly, the authors report that the agreement on the tangibles items is nearly perfect and conclude that tangibles "is a dimension clearly and distinctively perceived by customers" (Llosa, Chandon, & Orsingher, 1998). In any event, despite the many studies which have examined the factor structure of SERVQUAL, "there is no clear consensus on the number of dimensions and their interrelationships" (Parasuraman, Zeithaml, & Berry, 1994). A considerable amount of research still needs to be done concerning the dimensionality of perceived service quality (Mels, Boshoff, & Nel, 1997; Parasuraman, Zeithaml, & Berry, 1994). The potential impact of a significant relationship between expectations about service performance and the service performance itself on reliability and factor structure (e.g., the number of components comprising the service quality construct) is not the only concern regarding the use of difference scores. The fact is, scores

40 JOURNAL OF BUSINESS DISCIPLINES used to measure expectations about service quality may simply be unnecessary. As noted by Babakus and Boller (1992), scores reflecting expectations of service performance do not help explain differences in service quality perceptions. Indeed, in a comprehensive investigation comparing SERVQUAL to a performance-only scale, (e.g. SERVPERF), Cronin and Taylor (1992) report that the performance-only measures consistently outperformed SERVQUAL. Brown, Churchill, and Peter (1993) express added concern about the variance restriction in the SERVQUAL data. The authors argue that since the expected level of service will almost always be higher than the perceived level of service, the variance of the difference scores is restricted. The results of their study support these concerns empirically. A third problem identified by McAlexander, Kaldenburg, and Koenig (1994, p.38) relates to the expectations scores themselves. More specifically, the authors report that health care patients "have uniformly high expectations across all service dimensions, which brings into question the diagnostic utility of the expectation measurement." The authors warn, "since repeated empirical studies have questioned the effectiveness of expectations measures, a manager should have strong justification before adding them to the instrument and bearing the negative consequences of a lengthy questionnaire." In summary, the vast majority of research advises against the use of difference scores and suggests instead that quality perceptions can be accurately predicted using only the performance scale (Brown, Churchill, & Peter, 1993; Cronin & Taylor, 1992; Lam, 1995a; McAlexander, Kaldenburg, & Koenig, 1994; Vandamme & Leunis, 1993; VanDyke, Kappelman, & Prybutok, 1997). Justification for Data Collection from the Hair Salon Industry In recent years, service quality has been studied across an extensive array of industries. However, no consensus has been reached as to how many components comprise the service quality construct (dimensionality). Therefore, further research examining dimensionality should be carefully directed at collecting data from those service industries which are somehow unique and which may

Harrison - Walker: 41 Service Quality in the Hair Salon Industry therefore potentially provide additional insight to further the service quality literature. Hair salon services are indeed different from many of the previously studied services in important ways. First, unlike hair salon services, a number of services investigated to date involve intangible actions (see Lovelock, 1991). These include the following: Consulting firms (Pitt, Watson, & Bruce, 1995) Dog tracks (Taylor, et. al., 1993) Financial institutions (Chaston, 1995; Lam, 1995a, 1995b; Mels, Boshoff, & Nel, 1997; Parasuraman, Zeithaml, & Berry, 1991; Pitt, Watson, & Bruce, 1995) Government (Donnelly, et. al., 1995; Foster & Newman, 1998) Information services (Kettinger & Lee, 1997; Pitt, Watson, and Bruce, 1995, 1997; VanDyke, Kappelman, and Prybutok, 1997) Insurance (Mels, Boshoff, & Nel, 1997; Parasuraman, Berry, & Zeithaml, 1991) Legal services (Witt & Stewart, 1996), life assurer (Mels, Boshoff, & Nel, 1997) Movie theaters (Taylor, Sharland, Cronin, & Bullard, 1993) Higher education (Anderson 1995b) Professional business services (Weekes, Scott, & Tidwell, 1996) Tourism (Augustyn & Ho, 1998) Second, salon services are directed at people s bodies while other services investigated to date are directed at goods or other physical possessions (see Lovelock, 1991). Examples include the following: Electrical appliance repair (Mels, Boshoff, & Nel, 1997) Motor repair service stations (Mels, Boshoff, & Nel, 1997) Purchasing (Young & Varble, 1997) Telephone repair (Parasuraman, Berry, & Zeithaml, 1991) Trucking (Crosby & LeMay, 1998) Third, hair salon providers exercise considerable judgment in meeting individual consumer needs, while many other services examined in the current literature involve service providers who exercise little or no such judgment (see Lovelock, 1991). Examples of such services include: Apparel specialty stores (Gagliano & Hathcote, 1994) Catering (Johns & Tyas, 1996)

42 JOURNAL OF BUSINESS DISCIPLINES Country clubs (Taylor, Sharland, Cronin, & Bullard, 1993) Hotels (Akan, 1995) Restaurants (Johns and Tyas, 1997) Health and fitness centers (Taylor, Sharland, Cronin, & Bullard, 1993) In reviewing the recent studies of service quality, the only services which share similar characteristics to hair salons include the following: Doctors and dentists (Kaldenburg, et. al., 1997; McAlexander, Kaldenburg, & Koenig 1994; Sargeant & Kaehler, 1998) Hospitals (Hemmasi, Strong, & Taylor, 1994; Lam, 1997; Vandamme & Leunis, 1993) University health care (Anderson, 1995a) The potential value of examining hair salon services lies in the evaluation characteristics associated with health care services versus hair salon services. Health care services are high in credence qualities (characteristics that the consumer may find impossible to evaluate even after purchase and consumption). Hair salons are high in experience qualities (characteristics that the consumer can evaluate only after purchase and consumption). The evaluation characteristics of an industry are of critical importance, particularly when consumers are being asked to evaluate the quality of service provided. While consumers may find it impossible to evaluate health care services, they should reasonably be able to evaluate services provided by the hair salon. In summary, an empirical examination of the components comprising the service quality construct using data collected on hair salon services may provide valuable insight into service quality in other industries. Analysis To investigate the dimensionality of service quality, we subject the performance-only items of the SERVQUAL scale (see Appendix) to exploratory factor analysis with oblique rotation using SPSS for Windows. Factor analysis is a technique widely used in marketing practice and academic marketing. The purpose of factor analysis is to reduce a set of items (in this case, 22 items) to a smaller set of underlying variables, or "factors." Once the number of factors (e.g. dimensions) is determined (using the eigenvalue>1 method of factor extraction), the factors are rotated to improve interpretation of

Harrison - Walker: 43 Service Quality in the Hair Salon Industry the factors (to come up with a name for the underlying dimension that properly reflects the set of items loading on each factor). Oblique factor rotation is used to allow for factor correlation. Exploratory (rather than confirmatory) factor analysis is considered appropriate since there is no consensus in the literature as to the factor structure of the service quality construct (Mels, Boshoff, & Nel, 1997). Data is collected using self-report surveys. The survey sample consists of a total of 239 individual consumers residing in either of two mid-sized college towns in two southern states. All items were linked to a 7-point Likert-type scale. Data is collected through the use of a survey distributed by undergraduate business students. Key characteristics of the respondents are presented in Table 1. Table 1 Characteristics of Respondents Age Under 24 25.6 25-44 49.5 45-64 22.3 65+ 2.5 Gender Male 25.8 Female 74.2 Household Size (mean) 2.72 Occupation (%) Housewife 5.0 Student 4.6 Hourly/Skilled 25.6 Clerical 13.9 Mgr/Prof 45.8 Retired/Unemp/Other 5.0 In the current study, the rotated factor loading matrix suggests a two-factor model, explaining 67.7% of the variance (see Table 2). Factor loadings are examined to evaluate how efficiently an item appears to reflect its associated factor. A careful study of factor

44 JOURNAL OF BUSINESS DISCIPLINES loadings suggests that factor 1 represents interaction quality while factor 2 represents tangible quality. Table 2 Factor Loadings Matrix Factor 1 Factor 2 Assurance 1.882 Responsiveness 3.870 Responsiveness 4.869 Responsiveness 2.858 Reliability 3.841 Assurance 2.837 Responsiveness 1.832 Reliability 1.830 Empathy 3.823 Empathy 1.806 Empathy 4.805 Reliability 2.799 Reliability 4.790 Assurance 3.770 Empathy 2.756 Assurance 4.726 Reliability 5.683 Empathy 5.657 Tangibles 2.882 Tangibles 4.869 Tangibles 1.857 Tangibles 3.849 Component Correlation =.611 The reliabilities of each dimension are assessed using Chronbach s alpha. The reliability for the tangibles factor is.899, while the reliability for the interaction factor is.968. These values compare very favorably with the average reliabilities of SERVQUAL (Parasuraman, Zeithaml, & Berry, 1991). From this we conclude that the two-factor solution is appropriate for the hair salon industry.

Harrison - Walker: 45 Service Quality in the Hair Salon Industry Discussion The current study examines the dimensionality of service quality using performance-only measures. The use of hair salon data in the current study makes a unique contribution to the literature. That is, unlike the various services studied in the service quality literature to date, hair salon services involve tangible actions, are directed at people s bodies rather than at goods or physical possessions, providers exercise considerable judgment in meeting individual consumer needs, and are high in experience (rather than credence) qualities. The most important empirical conclusion of this study is that service quality (as measured using data from the hair salon industry) appears to consist of two factors. Examination of the items loading on the first factor suggests that these items refer to interaction quality, or the quality associated with human interaction during the service encounter (Lehtinen & Lehtinen, 1985; Mels, Boshoff, & Nel, 1997). Items loading on the second factor refer to the tangible aspects of service delivery (physical facilities, equipment, appearance of personnel). Consistent with the findings of Llosa, Chandon, and Orsingher (1998), tangible quality is a dimension clearly and distinctively perceived by customers." Notably, reliabilities for both factors are quite acceptable. The practical benefit of finding only two factors is two-fold. First, the marketing manager's task is simplified by having only two factor scores to assess, rather than, for example, five or six. Accordingly, measures can be implemented to either improve tangible service quality or interaction quality. Second, fewer factors means more items per factor, and more items per factor generally increases the reliability of the factor. The finding of two service quality dimensions for the hair salon industry in particular suggests that consumers do not clearly differentiate the interaction aspects of reliability, responsiveness, assurance, and empathy. Consumers in this industry similarly rate the items designed to measure these aspects of service quality (see Parasuraman, et al., 1991), indicating a general, overall attitude toward their interactions with their hairdressers. In other words, consumers appear to form a general attitude of liking or not liking their hairdressers. One explanation of this finding would be that hairdressers that are reliable, for example, are also responsive, empathetic, and

46 JOURNAL OF BUSINESS DISCIPLINES courteous, and vice versa. Another perhaps more plausible explanation is that this generalized response is representative of a "halo effect." The halo effect is the common tendency to rate individuals high or low on all performance measures based on one of their characteristics. For example, a consumer who rates a hairdresser high on empathy (caring, individualized attention) might be rated high on each of the other aspects of interaction quality. Future Research Would such an effect be found in other services? One would have to identify the special characteristic(s) of those service industries where the interaction quality items fall together as a single factor. For example, the halo effect may be most probable in services where providers exercise considerable judgment in meeting individual needs. In such instances, consumers are likely to have little knowledge of the service itself. For example, consumers are less likely to know how to cut hair than to know how to serve food at a restaurant or show a movie on a projector. When consumers possess little knowledge of the service itself, a halo effect is more likely. As noted by Robbins (1991), the halo effect frequently occurs when students evaluate their classroom instructor. This effect might reasonably be expected to occur with other services sharing the same characteristics as hair salons. For example, the services of a personal trainer or massage therapist are directed at people's bodies, providers exercise considerable judgment in meeting individual consumer needs, are high in experience qualities, and involve tangible actions. This may prove a fruitful area for future research. Does the current study provide valuable insight? It seems apparent at this point, based on the extensive service quality literature, that there are indeed different factor structures appropriate to different service industries. Rather than trying to ascertain the right factor structure for the service quality construct, service quality researchers are encouraged to identify the reasons for the various factor structures. More specifically, the effect of service characteristics (i.e., services directed at people s bodies versus services directed at goods or possessions, services involving tangible actions versus services involving intangible actions, etc.) on service quality dimensionality can be examined. The first step would be to review the service quality literature to arrive at a series of research hypotheses. While the literature contains evidence on a number of

Harrison - Walker: 47 Service Quality in the Hair Salon Industry industries with various service characteristic combinations, not all combinations are accounted for. The current study provides dimensionality data on an industry having characteristics that may be substantively different from those industries previously examined. Once research hypotheses are formulated, new data can be collected from a number of service industries representative of the various combinations of service characteristics. An analysis of variance could be conducted to examine the effect of service characteristics on the dimensionality of the service quality construct. These findings could be beneficial in gaining an understanding as to why different industries exhibit different factor structures. To be further useful to marketing managers, such data could be analyzed to detect whether there are significant differences in responses based on the demographic characteristics of respondents (see Gagliano & Hathcote, 1991). The focus and primary contribution of the current study is to provide data from an industry that has characteristics unique from those industries studied to date. In the process, however, some interesting observations are made based on the current research and some new and interesting areas for future research are identified. References Akan, P. (1995). Dimensions of Service Quality. Managing Service Quality 5(6): 39-43. Anderson, E. A. (1995a). Measuring Service Quality at a University Health Clinic. International Journal of Health Care Quality Assurance 8(2): 32-37. Anderson, E. A. (1995b). High Tech vs. High Touch: A Case Study of TQM Implementation in Higher Education. Managing Service Quality 5(2): 48-56. Augustyn, M., & Ho, S. K. (1998). Service Quality and Tourism. Journal of Travel Research 37(1): 71-75. Babakus, E., & Boller, G. W., (1992). An Empirical Assessment of the SERVQUAL Scale. Journal of Business Research 24(3): 253-68. Brown, T. J., Churchill, G. A. J., & Peter, J. P. (1993). Improving the Measurement of Service Quality. Journal of Retailing 69(1): 127-139.

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Harrison - Walker: 51 Service Quality in the Hair Salon Industry Appendix Tangibles 1. This service organization has up-to-date equipment. 2. The physical facilities at this service organization are visually appealing. 3. The employees at this service organization are well-dressed and appear neat. 4. The appearance of the physical facilities of this service organization is in keeping with the type of service provided. Reliability 1. When this service organization promises to do something by a certain time, it does so. 2. When you have problems, this service organization is sympathetic and reassuring. 3. This service organization is dependable. 4. This service organization provides its services at the time it promises to do so. 5. This service organization keeps its records accurately. Responsiveness 1. This service organization tells its customers exactly when services will be performed. 2. You receive prompt service from this service organization's employees. 3. Employees of this service organization are always willing to help customers. 4. Employees of this service organization respond to customer requests promptly. Assurance 1. You can trust employees of this service organization. 2. You can feel safe in your transactions with this service organization's employees. 3. Employees of this service organization are polite. 4. Employees get adequate support from the service organization to do their jobs well.

52 JOURNAL OF BUSINESS DISCIPLINES Empathy 1. This service organization gives you individual attention. 2. Employees of this organization give you personal attention. 3. Employees of this organization know what your needs are. 4. This service organization has your best interests at heart. 5. This service organization has operating hours convenient to all their customers.