Quality in the service industry.docx

Quality in the service industry.docx

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Qualityintheserviceindustry

Part1.Introduction

LouisV.Gerstner,theformerCEOofIBM,said:

“Servicesaregoingtomovingthisdecadetobeingthefrontedgeoftheindustry.”Accordingtothisforecast,actionsofcurrentIBMCEO,SamPalmisano,strengthenedtheattentionontheservicesandwonanoutstandingsuccessinbusinessexpansion.Thence,thereinnodenyingthattheservicesindustryareplayingamoreandmoreimportantroleinthewholesociety.Forexample,in2000,thepercentageofservicersinthedevelopedcountriesaccounted60%-78%ofthewholeworkerpopulationandthe45%-62%inthedevelopingcountries.Moreover,theservicesindustryoccupiesadominantpositionintheeconomyindevelopedcountriesandthepercentagecouldreflectthedegreeofeconomicdevelopmentdirectly.However,thebadqualitycouldinfluencethehealthofthemarketingservices.Asaconsequence,thisacademicessaywillpaymoreattentionontheanalyzingtwoquestions:

whyisqualitysuchanimportantissueinthemarketingofservicesandwhyisqualitymoredifficulttomanageinservicesindustriesthanitisinthecaseofphysicalgoods.

Part2.Theimportanceofqualityinthemarketingofservices

I.Basicdefinition

Themarketingofservicesisdefined:

“Alleconomicactivitieswhoseoutputisnotaphysicalproductorconstruction,isgenerallyconsumedatthetimeitisproduced,andprovidesaddedvalueinforms（suchasconvenience,amusement,timeliness,comfort,orhealth）thatareessentiallyintangibleconcernsofitfirstpurchaser.”（Vargo&Lusch,1987）Thequalityisamajorsideoftheservicemarketingandcoulddeterminethefutureofthenewindustry.Intangibility,heterogeneity,inseparability,perishesabilityandcustomerexpectationsaremainfactorstoinfluencetheservicequality.

Althoughthereisnoaccuratedefinitionabouttheservicequality,somedefinitionsalsoareacceptedbymajorityofpeople.Forexample,servicequalityisabusinessadministration’stermanddescribesthedegreeofachievementofanorderedservice.（Mick&Cloby,2001）Anotherdefinitionis:

“Qualityofserviceisabroadtermthatisusedinbothcustomercareevaluationandintechnologicalevaluation.”（Booms&Bitner,2000）Theenjoymentandcareofthecustomersisthemainlystandardstoevaluatethequalityofservice.Incustomers’opinions,highqualitymeansthattheneeds,wantsanddemandsaremetfullybytheservicing.Forinstance,theMeidiGroupinvestedlargeamountofhuman,money,materialandotherresourcestobuildafter-salesservices.Iftheorganizationtakesmeasurestoimprovetheservicequality,thecompetitiveedge,customerloyaltyandresourcesmanagementcouldbeameliorated.

I.Competitiveedge

Competitiveedgehasbeendefinedas:

“havingaclearadvantageoverthecompetitionintermsofoneormoreelementofthemarketingmixthatisvaluedbypotentialcustomers.”（Laroche&Gilmore,1992）Competitiveedgemaybegotwhenoneelementinthemarketingmixisdevelopedlargely.Withoutadoubt,improvingthequalityofserviceseemstobeeasytoachieve.Greatservicequalitycouldhelptheenterprisetoobtainacompetitiveedgeandthisfunctioncouldexpressinsomeaspects.Therefore,ifthecompanywantstowintheedgeinthecompetitivemarketing,thequalityofservicemustbeimproved.Afterobtainingthisadvantage,thefirmsmaygetalargeamountofunexpectedbenefits.

Ifthepeoplefindthatqualityofserviceisbad,customerswouldnotbuythisserviceagainbecausetherearemanychoicesinthemarketeconomy.Firstly,itistheincreasingaboutcustomers.Goodqualitycouldletcustomerincreasingthetrustlevel.Forexample,HaierGroupattractscustomersbecauseofthewonderfulservicequalityafterselling.Lastly,itisthebrandbranding.Wallyservicequalitycouldleaveagreatimpressioninconsumers’mindsandelevatethecompanyimage.Whentheimageisacceptedandconfirmedbythepublic,thewaytothebrandbuildingmaybecomeeffortless.Forexample,BeijingFoton,developedtheCallCentersystemtomanagetheallcaraccessoriesandofferafter-salesservicestimely.Owingtothegreatservicequality,theBeijingFotonwasacceptedbypublicandrankedthefourthlocationinallChinesecarindustryinonly15yearsshortterm.

III.Customerloyalty

"Customerloyaltyisusedtodescribethebehaviorsofrepeatcustomers,aswellasthosethatoffergoodrating,reviews,ortestimonials."（Prahalad&Gilly,2005）Obtainingandmaintainingthemarketshareisalargeobjectiveoftheorganizationsbymeetingtheneeds,wantsanddemandsofpeopletodeveloptheloyalty.Servicemarketinghassomespecialfeaturesandcustomerscouldcomparetheservicequalitybetweendifferentoffersinthelongterm.Therefore,increasingtheservicesqualitycouldcontributesignificantlyintheprocessoftheloyaltybuilding.Afterthebuildingacloserelationshipwithperson,thecompanymaygetastablebenefitbecausethesefaithfulpeoplecontinuetopurchasetheproducts.

Somepeoplemaygetattractedbythelowestpricebypromotionactivitiesandtheholderscouldincreasethesellinginshortterms.However,whentheactivityfinish,thecustomers’attentionisgoneandthefirmhastopaythehighpromotionfees.Ifaenterprisedoesnotaloyalgroupandcouldnotmakeeveryeffortstomeetthisgroup,theindustrymaybeeffectedhardly.Forexample,whenthebeginningoftheLiNingsports,theproductsfacethestrongcompetitionwithAnta,NickandK-bird.Itdoesnothaveanyadvantagesincapital,scale,materialandotherresources.However,LiNingmadearightchoicetofocusontheteenagersgroupbyofferingthehighservicequalitytogroomtheloyalty.Theteenagerssupportingletsthecompanytogrowupstabilityandthelogo“Nothingisimpossible”couldbeseenineverycornerofChina.

IV.Resourcemanagement

"Resourcemanagementistheefficientandeffectivedeploymentofanorganization'sresourceswhentheyareneeded"（Keillor&Smith,2004）Theseresourcesmayincludefinancialresources,humanskills,inventory,productionresourcesandinformationtechnology.Keepingthehighqualityoftheservicemaybenefittheresourcemanagementandthisfunctioncouldbeexpressedinseveralsides.Firstly,costreductionwillcomewiththedevelopingintheservicequality.Enhancingqualitymeanstodischargetheunderproofworkersandemployeeshavetherightobjectivesinsteadofsomewrongbehaviors.Thebenignemployeeswoulduselowcosttocreatehighbenefit.Forexample,inMcKinsey&Company,aprojectaboutservicequalityin2007reducedabout$40millionlossbycuttheunqualifiedwrightswhocouldnotprovidethefavorableservice.Secondly,highqualityneedswouldlettheemployeesdigthepotentialenthusiasmandcreativity.Inordertokeepthestablejob,theworkerhastoconsidermoretofindnewwaytoperfecttheservice.Therefore,highservicecouldmaketheenterprisetomakefulluseofalltheresourceinsteadoflosses.

Part3.Hardertomanagetheservicequalitythanphysicalgoods

Whenevaluatingthequalityofthephysicalgoods,theevaluatorsonlyneedpaymoreattentiontoappraisethequalityofthefinalfinishedproducts.（Tax,2007）However,whenassessingtheservicequality,theestimatorsneedhaveabrightunderstandingoftheservicingprocessesandthecustomers'feelingabouttheservice.Forexample,whenselectingarestauranttoeat,thefoodisonlyonefactorwhichmayinfluencethechoosing,theservicers'attitude,externalenvironmentandotherelementsshouldbeconsidered.Therefore,therearesomanyaccountstoimpactthemanagementoftheservicequalitycomparedwiththephysicalgoods.Thefeaturesoftheserviceareintangibility,heterogeneity,inseparabilityandperishability.Exceptingfortheoriginalcharacteristicoftheserviceindustry,thecustomers’gapsandproviders’gapsalsomayresultinmakingthemanagementabouttheservicequalitybecomedifficult.

I.TheOriginalFeatures

Themostbasicdistinguishingfeaturesofservicearetheintangibility.Itmansthatthecustomerscouldnotfeel,see,ortouchtheservice.（Morgan&Grove,2006）However,inthephysicalgoodsindustry,theproductscouldbedescribedclearlyaccordingtosomestandards.Forinstance,thecellphonecouldbedividedintodifferentgroupsaccordingtothecolor,size,thespeedofInternetandothercriterion.Thesituationischangeddeeplyintheservicemarketingandthesameservicemaynotmeettheneedsoftheallcustomers.Forexample,somepeoplemaybeinfondofthetraditionalhairstylewhenotherpeoplepreferthefashionhairstyle.Therefore,theservicequalityisnotonlyconsideredtobedecidedbytheofferedservicing,butalsobedeterminedbythecustomers’attitudes.Meantime,thedifficulttomanagementtheservicequalityalsoexpressedthemarketingchallenges.Forexample,thedemandsofhealthcareservicescouldnotbepredictedandtheamountoftheneedsmayshowdifferentlyindifferenttime,regionsandcountries.Anewconceptoftheservicealsomaybecopiedbyothercompetitors.

II.TheGapModel

ThereisagapmodelintheservicemarketingforcustomersanditisdevelopedbyParasuraman,Zeithaml&BerryinconjunctionwithSERVQUAL.Themodelisdividedintotwodifferentgroups:

customergapandprovidesgaps.Thefirstpartofthemodelisthecustomergap.Thelisteninggap,theservicedesignandstandardsgap,theserviceperformancegapandthecommunicationgaparebelongingtotheprovidergaps.Owingtothesegaps,themanagementofservicequalitybecomesharderthanthephysicalgoods.

"Customergapisthedifferencecustomerexpectationsandperceptions."（Bateson&