 Quality of the service is the degree of

conformance of all the relevant features and

characteristics of service to all the aspects of
the consumers’ needs limited by the price
and delivery s/he will accept.

 Quality can be viewed from two perspectives:

Internal quality based on conformance to
specifications
External quality based on customer-perceived
quality
Gain competitive advantage,
maintain loyalty
Increase value (may permit higher
margins)
Improve profits
 Expected
Service
CUSTOMER
Customer
Gap
Perceived
Service

COMPANY External
Service
Communications
Delivery Gap 4 to Customers
Gap 3
Gap 1 Customer-Driven
Service Designs and
Standards
Gap 2
Company Perceptions
of Consumer
Expectations
 Customer Gap:
 difference between customer expectations and
perceptions
 Provider Gap 1 (The Knowledge Gap):
 not knowing what customers expect, want, need
 Provider Gap 2 (The Service Design &
Standards Gap):
 not having the right service designs and standards
 Provider Gap 3 (The Service Performance Gap):
 not delivering to service standards
 Provider Gap 4 (The Communication Gap):
 not matching performance to promises
 Customer Expectations

Gap
1 •Inadequate marketing
research
orientation
•Lack of upward
communication
•Insufficient relationship
Company Perceptions of
focus
Customer Expectations
•Inadequate service
 Customer-Driven Service
Designs and Standards

Gap
• Poor service design
2
• Absence of customer-
driven standards
• Inappropriate physical
evidence and services gap
Management Perceptions of
Customer Expectations
 Customer-Driven Service
Designs and Standards

Gap •Deficiencies in human

3 resource
policies
•Customers who do not
fulfill roles
•Problems with service
intermediaries
• Failure to match supply
and Service Delivery
 Service Delivery

Gap •Lack of integrated services

marketing communications.
4
•Ineffective management of
customer expectations.
•Overpromising.
•Inadequate horizontal
communications.
External Communications to
Customers
 Expected
Service
CUSTOMER

Perceived
Service
COMPANY
External
Service
Communications
Gap 1 Delivery Gap 4 to Customers
Gap 3
Customer-Driven
Service Designs and
Standards
Gap 2
Company Perceptions
of Consumer
Expectations
 The central focus of the gaps model
is the customer gap, the difference
between customer expectations and
perceptions.
 Expectations are the reference
points customers have coming in to
a service experience.
 Perceptions reflect the service as
actually received.
 Easy to
evaluate
Clothing
Jewelry
Furniture

properties
Houses

High in search
Automobiles
Restaurant meals
Most goods

Vacation

properties
Haircuts
Child care

High in experience
Television repair
Legal services
Most services

Root canal
properties
Auto repair
Medical diagnosis
High in credence
evaluate
Difficult to
 Ideal HIGH
Expectation Of
Desires

Normative
“should”
expectations

Experience
based norms

Acceptable
Expectations

Minimum
tolerance
expectations
LOW
 Desired Service

ZONE OF TOLERANCE

Adequate Service
 Desired Service
Level Of
Expectation

ZONE OF Desired
TOLERANCE Service

Adequate Service ZONE OF

TOLERANCE

Adequate
Service

Reliability Tangibles
 Lasting
Service
Intensifiers
Desired Service

Personal
Needs

ZONE OF TOLERANCE

Adequate Service
 Lasting
Service
Intensifiers
Desired Service

Personal
Needs

Temporary ZONE OF
Service TOLERANCE
Intensifiers

Perceived
Service
Alternatives Predicted
Adequate Service Service
Self Perceived
Service Role

Situational
Factors
 Explicit
Lasting Service
Service Promises
Intensifiers
Desired Service Implicit
Service
Promises
Personal
Needs Word – Of –
Mouth
Temporary ZONE OF
Service TOLERANCE Past
Intensifiers Experience

Perceived
Service
Predicted
Alternatives Adequate Service Service
Self Perceived
Service Role

Situational
Factors
 Customer satisfaction,
a business term, is a measure of how
products and services supplied by a
company meet or surpass customer
expectation.
 It is seen as a key performance
indicator within business.
 "Customer loyalty is when an
organization receives the ultimate reward
for the way it interacts with its customers. “
 Although customer loyalty is often
achieved through offers, discount coupons,
rebates and other kinds of rewards, long-
term customer loyalty can only be created
by making your customers feel that they
are your number one priority.
 Customersatisfaction measures how well a
customer’s expectations are met.

 Customer loyalty measures how likely

customers are to return and their willingness to
perform partner shipping activities for the
organization.

 Customer satisfaction is a requisite for loyalty.

Product/service features.
Consumer emotions.
Attributions for service success or
failure.
Perceptions of equity or fairness.
Other consumers, family members.
Price.
Increased customer retention.
Positive word-of-mouth
communications.
Increased revenues.
The customer’s judgment of overall
excellence of the service provided in
relation to the quality that was expected.
Service quality assessments are formed
on judgments of:
 outcome quality
 interaction quality
 physical environment quality
RELIABILITY
■ Providing service as promised
■ Dependability in handling
customers’ service problems
■ Performing services right the EMPATHY
first time ■ Giving customers individual
attention
■ Providing services at the
promised time ■ Employees who deal with customers
in a caring fashion
■ Maintaining error-free records
RESPONSIVENESS ■ Having the customer’s best interest
at heart
■ Employees who understand the
■ Keeping customers informed as needs of their customers
to when services will be
performed TANGIBLES
■ Convenient business hours
■ Prompt service to customers ■ Modern equipment
■ Willingness to help customers ■ Visually appealing facilities
■ Readiness to respond to ■ Employees who have a neat,
customers’ requests professional appearance
ASSURANCE ■ Visually appealing materials
associated with the service
■ Employees who instill confidence in
customers
■ Making customers feel safe in their
transactions
■ Employees who are consistently
courteous
■ Employees who have the knowledge
 Reliability:
Delivering on promises.
Example: receive mail at same time
each day.

 Responsiveness: Willingness to help

customers promptly. Example: avoid
keeping customers waiting for no
apparent reason.
 Assurance:Inspiring trust and confidence.
Example: Insurance, medical services, etc..

 Empathy: Treating customers as individuals.

Example: being a good listener.

 Tangibles:
Representing the service physically.
Example: Food.
 Efficiency
 Fulfillment
 Reliability
 Privacy
 Responsiveness
 Compensation
 Contact
 Occurs any time the customer interacts
with the firm.
 Can potentially be critical in determining
customer satisfaction and loyalty.
 Is an opportunity to:
 build trust
 reinforce quality
 build brand identity
 increase loyalty
 Remote Encounters
 Phone Encounters
 Face-to-face Encounters
Check-In
Check-In

Bellboy
Bellboy Takes
Takes to
to Room
Room

Restaurant
Restaurant Meal
Meal

Request
Request Wake-Up
Wake-Up Call
Call

Checkout
Checkout
Sales
Sales Call
Call

Delivery
Delivery and
and Installation
Installation

Servicing
Servicing

Ordering
Ordering Supplies
Supplies

Billing
Billing
 Recovery: Adaptability:
employee response employee response
to service delivery to customer needs
system failure and requests

Coping: Spontaneity:
employee response unprompted and
to problem customers unsolicited employee
actions and attitudes
 D DON’T
O
Acknowledge Ignore customer
problem Blame customer
Explain causes Leave customer to
Apologize fend for him/herself
Compensate/upgrade Downgrade
Lay out options Act as if nothing is
Take responsibility wrong
“Pass the buck”
 D DON’T
O
Recognize the Ignore
seriousness of the Promise, but fail to
need follow through
Acknowledge Show unwillingness to
Anticipate try
Attempt to Embarrass the
accommodate customer
Adjust the system Laugh at the customer
Explain rules/policies Avoid responsibility
Take responsibility “Pass the buck”
 D DON’T
O
Take time Exhibit impatience
Be attentive Ignore
Anticipate needs Yell/laugh/swear
Listen Steal from customers
Provide information Discriminate
Show empathy
 D DON’T
O
Listen Take customer’s
Try to accommodate dissatisfaction
Explain personally
Let go of the Let customer’s
customer dissatisfaction affect
others
  Contact
employees
 Customer
 Operational flow him/herself
of activities People  Other customers
 Steps in process
 Flexibility vs.
standard
 Technology vs.  Tangible
human communication
Physical
Process  Servicescape
Evidence
 Guarantees
 Technology
 Website
 Expected
Service
CUSTOMER
Customer
Gap
Perceived
Service

COMPANY External
Service
Communications
Delivery Gap 4 to Customers
Gap 3
Customer-Driven
Service Designs and
Standards
Gap 2
Company Perceptions
of Consumer
Expectations
CUSTOMER
Expected
Service

Listening
COMPANY Gap
Company
Perceptions
of Consumer
Expectations
 Listento customers through
research.
 Cover company strategy to retain
and strengthen the relationship.
 Service recovery.
 By formal and informal method.
 Surveys.
 Critical incident studies.
 Complaint solicitation.
 To identify dissatisfied customers.
 To discover customer requirements or expectations.
 To monitor and track service performance.
 To assess overall company performance compared to
competition.
 To assess gaps between customer expectations and
perceptions.
 To appraise service performance of individuals and
teams for rewards.
 To determine expectations for a new service.
 To monitor changing expectations in an industry.
 To forecast future expectations.
 9
8
7 O
O O
O O
6
5
4
3
2
1
0
Reliability Responsiveness Assurance Empathy Tangibles

Retail Chain O
Zone of Tolerance S.Q.
Perception
HIG
H High  
Leverage
Attributes to Attributes to
Importance

Improve 
Maintain
  


Low

 Leverage

Attributes to Attributes to De-
Maintain emphasize

LOW
HIG
Performance H
Enhancing

Retaining

Satisfying

Acquiring
 The Customer Pyramid
What segment spends more
Most with us over time, costs less to
maintain, and spread positive
Profitable
word of mouth?
Customers

What segment costs us in

time, effort, and money
yet does not provide the
return we want? What
segment is difficult to do
Least business with?
Profitable
Customers
 Stable
Volume and Pricing
Frequency Bundling
Rewards and Cross
Selling

Integrated I. Continuous
Informatio Financial Relationships
n Systems Bonds
Excellen
IV. t
II.
Joint Structural Service Social
Personal
Investments Bonds and Relationships
Bonds
Value
Shared Social Bonds
Processes III. Among
and Customization Customers
Equipment Bonds
Anticipatio Customer
n/ Intimacy
Innovation Mass
Customization
 The Customer is not always right

 The Wrong Segment

 Not Profitable in Long Term

 Difficult Customers
 Service Failure

Take Action Do Nothing

Switch Providers Stay with Provider

Complain to
Complain to Complain to
Family &
Provider Friends Third Party

Switch Providers Stay with Provider

 W
e
Co lco
e m me
vic pl
ai an
r nt d
Se s En
e co
th ur
ag
e
Saf e
i l
Fa

Ac t
Quickly
Service
Learn from
L o st
Customers

Recovery
Strategies
y
i rl
Le F a
Re arn er
s
co fro
ve
ry
m t om
s
Ex
pe Cu
t
r ie
nc r ea
es T
 Expected
Service
CUSTOMER
Customer
Gap
Perceived
Service

COMPANY External
Service
Communications
Delivery Gap 4 to Customers
Gap 3
Gap 1 Customer-Driven
Service Designs and
Standards
Gap 2
Company Perceptions
of Consumer
Expectations
 Oversimplification

 Incompleteness

 Subjectivity

 Biased Interpretation
 • Full-scale launch
• Post-launch
review

Full Launch Enablers Development

• Formulation

l
nte na
of new services

Co izatio
People objective / strategy

xt

Te
• Idea generation

am
n
ga
and screening

s
Or
• Concept
Services development and
testing
Technology Systems

Tools
• Service design
and testing Design Analysis
• Process and system
design and testing • Business analysis
• Marketing program • Project
design and testing authorization
• Personnel training
• Service testing and
pilot run
• Test marketing
  Business Strategy Development or Review

 New Service Strategy Development

Front End
 Idea Generation
Planning
Screen ideas against new service strategy

 Concept Development and Evaluation

Test concept with customers and employees

 Business Analysis

Test for profitability and feasibility

 Service Development and Testing

Conduct service prototype test

 Market Testing
Implementation
Test service and other marketing-mix elements
 Commercialization

 Postintroduction Evaluation
 MARKETS
OFFERINGS
Current New Customers
Customers

Existing Share Building Market Development

Services

New Services Service Development Diversification

 Radical
Innovations - Major Innovation.
Example: amazon.com.

 Start-up
Business: new service for existing
market. Example: online banking.

 NewServices for the Market Presently Served:

new services to customers of an organization.
Example: health club offering nutrition classes.
 ServiceLine Extensions: augmentation of
existing service line. Example: Airline offering
new routes.

 ServiceImprovements: changes in features of

currently offered service. Example: Trains.

 Style
Changes: modest visible changes in
appearances. Example: Videocon.
A service blueprint is a picture or a
map that accurately portrays the
service system so that the different
people involved in providing it can
understand and deal with it
objectively regardless of their roles
or their individual point of view.
Service
Bluepri
nt
 Interview Paperwork/
Physical Campus Reception Classroo Hall Documents
Evidenc m
e
Custome Arrive at Admission/
Entrance Interview
r Enquiry Submission
Institute Exam
Actions of
Line of Documents
Interaction
On Stage
Contact Receptionist Examiner Director
Person
Line of Administrati
Visibility on
Backsta Peons Staff
ge
Contact
Person
Line of Internal
Interaction
Support Online/site Process of checking Registration
Process Application Documents System
 Bill
Desk
EVIDENCE
PHYSICAL
Hotel Cart for Desk Elevators Cart for Room Menu Delivery Food Lobby
Exterior Bags RegistrationHallways Bags Amenities Tray Hotel
Parking Papers Room Bath Food Exterior
Lobby Appearance Parking
Key
CUSTOMER

Arrive Give Bags Call Check out

Go to Receive Sleep Receive
at to Check in Room Eat and
Room Bags Shower Food
Hotel Bellperson Service Leave
(On Stage)

Greet and
CONTACT PERSON

Process Deliver Deliver Process

Take
Registration Bags Food Check Out
Bags
(Back Stage)

Take
Take Bags Food
to Room Order
SUPPORT PROCESS

Registration Prepare Registration

System Food System
 1. Identify Existing or Desired Service Encounter Sequence

2. Translate Customer Expectations Into

Behaviors/Actions

3. Select Behaviors/Actions for Standards

4. Set Hard or Soft Standards

Measure by Measure by
Audits or Hard 5. Transaction-
5.Develop
DevelopFeedback
Feedback Soft
Based Surveys
Operating Data Mechanisms
Mechanisms

6. Establish Measures and Target Levels

7. Track Measures Against Standards

8. Update Target Levels and Measures

Servicescape Other Tangibles
Facility Exterior Business Cards
• Exterior Design • Stationery
• Signage • Billing Statements
• Parking • Reports
• Landscape • Employee Dress
• Surrounding Environment • Uniforms
• Brochures
Facility Interior • Internet/ Web Pages
• Interior Design
• Equipment
• Signage
• Layout
• Air/ Quality Temperature
 PHYSICAL HOLISTIC INTERNAL BEHAVIOR
ENVIRONMENTAL ENVIRONMENT RESPONSES
DIMENSIONS
Cognitive
Emotional
Physiological
Individual
Behaviors

Employee
Responses
Ambient Social
Conditions Interactions
Perceived between and
Space/Function Servicescap among
e customer and
Signs, Symbols, employees
and Artifacts

Customer
Responses
Individual
Behaviors

Cognitive
Emotional
Physiological
Delivering and Performing
Service
 Expected
Service
CUSTOMER
Customer
Gap
Perceived
Service

Service External
COMPANY Delivery
Gap 4 Communications
to Customers

Gap 1 Customer-Driven
Service Designs and
Standards
Gap 2
Company Perceptions
of Consumer
Expectations
 Who are they?
 “boundary spanners”
 What are these jobs like?
 emotional labor
 many sources of potential conflict
▪ person/role
▪ organization/client
▪ interclient
▪ quality/productivity
External Environment

Internal Environment
• Person vs. Role

• Organization vs. Client

• Client vs. Client

• Quality vs. Productivity

 Hire for
r Service
fo Competenci Pr Be
te st Em efe the
pe Be e es and
m e l Service pl rre
Co th eop Inclination
oy d
er
P

Tr chn d
Se ron ard
Re ure

Te an cti
ai ic
Hire the

In Sk
w

n
Pr rvi g
s

ov ce
s

te il
an ea

Right People

fo al
er

ra ls

r
M

id
d
St

ve
Develop

Employees
Customer- People to

Empower
Employee

Customer

Retain the oriented

Treat

Deliver
s as

Best
s

Service Service
People Delivery Quality

w te
Em in t ny’

k
In loy

or
am o
Provide
Co Visi

clu ee

Te rom
p he s
m on

Needed Support
de s

P
pa

De Systems
Se vel e
or rvic op sur l
i
In ent e- ea na
t Provide M ter ice
Pr er ed In rv ty
oc na Supportive
es l Se ali
se
s
Technology Qu
and
Equipment
 Other customers can detract from
satisfaction
▪ disruptive behaviors
▪ excessive crowding
▪ incompatible needs
 Other customers can enhance
satisfaction
▪ mere presence
▪ socialization/friendships
▪ roles: assistants, teachers, supporters
 Lack of understanding of their roles
 Not being willing or able to perform their
roles
 No rewards for “good performance”
 Interfering with other customers
 Incompatible market segments
trategies for Enhancing Customer Participation

Define Customer’s Jobs

• Clarify level of participation
• Indentify specific roles
• Understand implications for
productivity & quality

Recruit, Educate & Reward

Customers
• Identify & recruit appropriate
segment
• Educate customers for their roles
• Provide reasons to participate
• Reward customer performance

Define Customer’s Jobs

• Clarify level of participation
• Indentify specific roles
• Understand implications for
productivity & quality
Demand Too High Shift Demand Demand Too Low
 Use signage to communicate
busy days and times
 Offer incentives to customers
for usage during non-peak
times
 Take care of loyal or regular
customers first
 Advertise peak usage times
and benefits of non-peak use
 Charge full price for the
service--no discounts
• Use sales and advertising to
increase business from current
market segments
• Modify the service offering to
appeal to new market segments
• Offer discounts or price
reductions
• Modify hours of operation
• Bring the service to the
customer
Demand Too HighAdjust CapacityDemand Too Low
 Stretch time, labor, facilities

and equipment
Cross-train employees
• Perform maintenance
 Hire part-time employees renovations
 Request overtime work from
employees • Schedule vacations
 Rent or share facilities
 Rent or share equipment • Schedule employee training
 Subcontract or outsource
activities • Lay off employees
 Expected
Service
CUSTOMER
Customer
Gap
Perceived
Service

COMPANY Service External

Communications
Delivery
Gap 3 to Customers
Gap 1 Customer-Driven
Service Designs and
Standards
Gap 2
Company Perceptions
of Consumer
Expectations
A number of media sources are used
for service marketing
communication.
 Need is to ensure that customers
receive unified & consistent
messages & promises.
 Company

Internal Marketing External

Vertical Communications Marketing
Horizontal Communication
Communications Advertising
Sales Promotion
Public Relations
Direct Marketing

Employees Interactive Marketing Customers

Personal Selling
Customer Service Center
Service Encounters
Services capes
 Manage
Customer
Expectations

Goal:
Manage Delivery Improve
Service greater than Customer
Promises or equal to Education
promises

Manage
Internal
Marketing
Communication
 Discrepanciesb/w service delivery &
external communications in the form
of exaggerated promises & the
absence of information about service
delivery aspects intended to serve
customers well can powerfully affect
consumer perceptions of service
quality.
 Inadequate management of service
promises.
 Inadequate management of
customer expectations.
 Inadequate customer education.
 Inadequate internal marketing
communications.
Approaches for Managing Service
Promises
MANAGING SERVICE PROMISES
Goal:
Create Coordinate Offer Delivery
Effective Make greater than
External Realistic Service
Services Communicati or equal to
Communicatio Promises Guarantees promises
on
ns
 Offer Choices

Create Tiered-Value
Offerings

Communicate Criteria for

Service Effectiveness

Negotiate
Unrealistic
Expectations

Goal:
Delivery
greater than
or equal to
promises
 Create
effective vertical
communication.

 Create
effective horizontal
communication.

 Alignback office & support personnel

with external customers.

 Create cross functional teams.

 Goal:
Delivery
greater than
or equal to
promises

Create Effective
Vertical
Communications
Create Effective
Horizontal
Communications

Align Back
Office Personnel
w/ External
Customers
Create
Cross-Functional
Teams
Source: http://www.newdhl.com/advertising.asp?cid=dhlbt1hmpg1
INDIAN LOGISTICS INDUSTRY : AN OVERVIEW

• Fastest growing industry.

• Dominated by unorganized market.

• Logistics cost is over 13% of GDP.

 Among the top 5 players in the country.

 Best domestic logistics company award.

 Network reaches up to 580 districts out of 590

districts.

 International operations.
S CUSTOMER
E Customer needs &
expectations
R Knowledge Gap (1)
V
Management definition
I Of these needs
C
Standard Gap (2)
E
Translation into design/
Delivery specs
Internal
G Delivery Gap (3) Communication Gap
A (4)
Execution of design/delivery (4) Advertising & sales
P specs promises

Perception Gap (5) Interpretation Gap (6)

M
O Customer perceptions of
product execution
Customer interpretation of
communication
D
E Service Gap (7)
L Customer experience
relative to expectations
 Customer needs & Expectations

 Improper field level Information.

KNOWLEDGE
 Business Intelligence not available for decision
GAP making at all levels.

 Least attention paid to small customers.

Management definition of these needs

GATI’S SOLUTION:

 Customer’s information is collected through feedback forms.

 Appointment of executives to cater all types of customers.

 Management definition of these needs

 No proper service design for customers.

STANDARD  Fluctuation in fuel prices.

GAP
 No Insurance for goods.

 Improper allocation of funds.

Translation into Design

GATI’S SOLUTION:

 Sharing the burden of increasing fuel prices.

 Insurance for goods.

 Translation into Design

 Poor employee-technology job fit.

DELIVERY
 Delay in delivering the service.
GAP

 Over pricing to match demand.

Execution of Design

GATI’S SOLUTION:

 Employees are properly trained.

 Promptness in delivery.
 Execution of Design

 Improper horizontal communication.

COMMUNICATION
 Customer enquiry constraints.

GAP  Absence of strong internal marketing.

 Lack of adequate education for customer.

Advertising And Sales Promises

GATI’S SOLUTION:

 Toll Free Number available to provide information to the customers.

 Gati.net.
 Execution of Design

 Indifferent attitude towards customers.

PERCEPTION

GAP
 Improper design leading to negative perception.

 Improper information transparency to their supply

chain partners to maintain competitiveness.

Customer Perceptions of product execution

GATI’S SOLUTION:

 Should have a positive attitude towards the customer.

 Proper market research to change design accordingly.

 Advertising And Sales Promises

 Overpromise, under delivery.

INTERPRETATION

 Main customers - Corporate customers. Hence

GAP
interpretation of a local customer varies differently.

Customer interpretation of communication

GATI’S SOLUTION:

 Should focus on B to C advertising apart from B to B advertising.

 Provide services as promised .

 Customer perceptions Customer Interpretation
Of product execution of communications

 Value added services.

SERVICE
 Ware housing facility.
GAP

 Reverse logistics.

Customer experience
Relative to expectations
GATI’S SOLUTION:

 Started giving value added services in some areas.

 SERVICE RECOVERY
Poor service recovery in the logistics industry.

Effects customer loyalty.

It should be Pro-active, Planned, Trained & Empowered

GATI : SERVICE RECOVERY

PARADOX
Undertaking Service Recovery Seriously.