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Managing Service Quality - September 15th, 2008

Index

Sr. No. Topics
1 Quality
2 Service Quality
3 Research Model
4 Dimensions of Product and Service Quality
5 Perceived Service Quality
6 GAP Analysis
7 Conceptual Model
8 Achieving Service Quality
9 Deming’s 14 Points
10 Case Studies
11 Bibliography

Quality


What is Quality?


 "The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs."
-Kotler

 “Quality must provide goods and services that completely satisfy the needs of both internal and external customers. Quality serves as the "bridge" between the producer of goods or services and its customer.”
-Johnson & Weinstein

 “Quality is consistent conformance to customer’s expectations.”
–Stack et al

 “Quality is a predictable degree of uniformity at a low cost with a quality suited to the market.”
-Deming

 “Higher quality has a beneficial effect on both revenues and cost.”
-Gummesson






Why Quality Matters?

In this increasingly competitive world, customers are in a position to demand forever increasing levels of service and quality. Rather than simply react to their demands, successful companies are proactive in the way they manage quality and continuously seek to improve levels of customer satisfaction.

 The global market is becoming more competitive every day.
 Companies continually search for new ways to gain an edge over their competitors around the globe.
 Global competition and deregulation in a number of industries is forcing companies to turn to quality in order to survive.
 Quality is our best assurance of customer allegiance, our strongest defense against foreign competition, and the only path to sustained growth and earnings (Welch).
 Perhaps the most important reason for pursuing quality is that Quality Pays (Deming).
 Research shows a relationship between quality, market share, and return on investment.
 Higher quality yields a higher return-on-investment (ROI) for any given market share.
 Quality also pays in the form of customer retention -- customer defections represent a significant cost to companies.
 Adopting quality principles strongly correlates to corporate stock and earnings appreciation.




Service Quality

Introduction:

There are certain service firms who offers identical services under competing with each other in a smaller area like fast food restaurants, banks etc. here the quality of service can be used to differentiate from each other. Service quality is crucial to the customer as well as the service firm. The service firm can be use the service quality in maintaining competitive advantage and the customer can use the service quality for quality differentiation. Measuring quality in services is not a simple task since they are in tangible and cannot be stored. We can define service quality in terms of satisfaction that the customers derives by comparing perception of the service received with the expectation of service desired.

 Customers also form perceptions of quality during the service transaction - how effectively and efficiently the service was delivered and the speed and convenience of completing the transaction

 Finally, customers evaluate support activities that occur after the transaction, that is post-sale services

Definitions of Service Quality:

 Service quality can also be defined according to both the ‘what’ and ‘how’ of a product or service delivered.
 Christian Gronroos distinguishes between “technical quality” and “functional quality”.
 Technical Quality is concerned with the outcome of the delivered product or service.
 Customers use service quality attributes such as reliability, competence, performance, durability, etc. to evaluate technical quality.
 Functional Quality has more to do with how the technical quality is transferred to the consumer. Service quality attributes such as responsiveness and access would be important in helping the customer judge the functional quality of the service encounter.

Process of Service Quality Management


1) Setting The Right Standard:

It is necessary to have the right standard for service quality or else the quality assurance process will deliver in appropriate levels of service. Standard quality is not just related to manufacturing, it covers all other functions.

2) Implementing Quality Service:

The implementation process involves total commitment from all the levels of organization. Team efforts play an important role. Effective implementation of service quality is possible trough excellent internal marketing program one of the approaches is total quality management (TQM).

3) Monitoring Service Quality:

In order to monitor service quality various tools and techniques are used, they are:

1. Statical Tool,
2. Quality Function Deployment,
3. Internal Performance Analysis,
4. Customer Satisfaction Analysis.

Research Model

Perceived service quality as a customer-based performance measure: An empirical examination of organizational barriers using an extended service quality model was done by A. Parasuraman, Leonard L. Berry, Valarie A. Zeithaml.

Perceived service quality as customer-based performances measure is also known as SERVQUAL Model. This study empirically examines organizational barriers to delivering high-quality service performance as measured by customer perceptions and expectations. Using the extended service-quality model developed by Zeithaml, Berry, and Parasuraman (Journal of Marketing, 52, 35-48) as a conceptual framework, five specific propositions implied by the model and by earlier studies contributing to its development were tested. Such testing required a complex research design involving five service companies as well as samples of customers, contact employees, and managers from each company. The results have practical implications and suggest an agenda for future organizational research.

SERVQUAL was originally measured on 10 aspects of service quality: reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding or knowing the customer and tangibles. It measures the gap between customer expectations and experience.

By the early nineties the authors had refined the model to the useful acronym RATER:
 Reliability
 Assurance
 Tangibles
 Empathy, and
 Responsiveness

SERVQUAL has its detractors and is considered overly complex, subjective and statistically unreliable. The simplified RATER model however is a simple and useful model for qualitatively exploring and assessing customers' service experiences and has been used widely by service delivery organizations. It is an efficient model in helping an organization shape up its efforts in bridging the gap between perceived and expected service.
Nyeck, Morales, Ladhari, and Pons (2002) stated the SERVQUAL measuring tool “remains the most complete attempt to conceptualize and measure service quality” (p. 101). The main benefit to the SERVQUAL measuring tool is the ability of researchers to examine numerous service industries such as healthcare, banking, financial services, and education (Nyeck, Morales, Ladhari, & Pons, 2002). The fact that SERVQUAL has critics does not render the measuring tool moot. Rather, the criticism received concerning SERVQUAL measuring tool may have more to do with how researchers use the tool. Nyeck, Morales, Ladhari, and Pons (2002) reviewed 40 articles that made use of the SERVQUAL measuring tool and discovered “that few researchers concern themselves with the validation of the measuring tool”.

Dimensions of Product and Service Quality

When it comes to measuring the quality of your services, it helps to understand the concepts of product and service dimensions. Users may want a key board that is durable and flexible for using on the wireless carts. Customers may want a service desk assistant who is empathetic and resourceful when reporting issues.
Quality is multidimensional. Product and service quality are comprised of a number of dimensions which determine how customer requirements are achieved. Therefore it is essential that you consider all the dimensions that may be important to your customers.

Product quality has two dimensions:

1. Technical Quality:

 Physical Dimension - A product's physical dimension measures the tangible product itself and includes such things as length, weight, and temperature.
 Performance Dimension - A product's performance dimension measures how well a product works and includes such things as speed and capacity.
While performance dimensions are more difficult to measure and obtain when compared to physical dimensions, but the efforts will provide more insight into how the product satisfies the customer.

2. Functional Quality:

 Responsiveness - Responsiveness refers to the reaction time of the service. It is the willingness to help the customers.
 Assurance - Assurance refers to the level of certainty a customer has regarding the quality of the service provided.
 Tangibles - Tangibles refers to a service's look or feel. Intangibility is one of the distinctive characteristics of service. However, the literature also highlights “tangibles” as one of the basic service quality dimensions. Investigates the importance of tangibles and intangibles in perceptions of service quality as assessed by both customers and service providers. Selects four service industries to reflect a range from high to low levels of tangible components and degree of intangibility in both service process and output. Based on 400 telephone interviews with consumers, shows that the level of tangible components has a positive impact on the perceived importance of the tangible dimension in service quality. However, the second phase of this research, involving a qualitative study with managers in the studied industries, shows that the tangibles dimension is relatively neglected in service industries with high tangible involvement.
 Empathy - Empathy is when a service employee shows that she understands and sympathizes with the customer's situation. The greater the level of this understanding, the better. Some situations require more empathy than others.
 Reliability - Reliability refers to the dependability of the service providers and their ability to keep their promises.
 Understanding/knowing customer - knowing customer’s needs.
 Competence - possess knowledge and skill to perform the service.
 Courtesy - politeness, consideration, and friendliness of service personnel.
 Communication - keeping customers informed; listening to customers.
 Credibility - trustworthy, believable, honest.
 Security - freedom from danger, risk, or doubt.


The quality of products and services can be measured by their dimensions. Evaluating all dimensions of a product or service helps to determine how well the service stacks up against meeting the customer requirements.

Perceived Service Quality

Customer service is about perception. Perceptions are judgments of the customers about the actual service performance or delivery by a company. Since services are intangible, customer search for the evidence of quality in every transaction they have with a service firm.

The evidences of service that are experienced by the customer are people, process and physical evidence. The corporate image of the service provider as well as the price of the service can also influence the perceived quality.






While comparing the expected and the perceived service quality the following may be the outcomes;

1) Perceive Quality > Expected Quality
Result = Delighted Customer.
2) Perceive Quality = Expected Quality
Result = Satisfied Customer.
3) Perceive Quality < Expected Quality
Result = Dissatisfied Customer.





GAP Analysis

In business and economics, Gap Analysis is a business resource assessment tool enabling a company to compare its actual performance with its potential performance. At its core are two questions:
1. Where are we?
2. Where do we want to be?

If a company or organization is under-utilizing resources it currently owns or is forgoing investment in capital or technology then it may be producing or performing at a level below its potential. This concept is similar to the base case of being below one's production possibilities frontier.

This goal of the gap analysis is to identify the gap between the optimized allocation and integration of the inputs and the current level of allocation. This helps provide the company with insight into areas that have room for improvement. The gap analysis process involves determining, documenting and approving the variance between business requirements and current capabilities. Gap analysis naturally flows from benchmarking and other assessments. Once the general expectation of performance in the industry is understood it is possible to compare that expectation with the level of performance at which the company currently functions. This comparison becomes the gap analysis. Such analysis can be performed at the strategic or operational level of an organization.

'Gap Analysis' is a formal study of what a business is doing currently and where it wants to go in the future. It can be conducted, in different perspectives, as follows:
1. Organization (e.g., human resources)
2. Business direction
3. Business processes
4. Information technology

Gap analysis provides a foundation for measuring investment of time, money and human resources required to achieve a particular outcome (e.g. to turn the salary payment process from paper based to paperless with the use of a system).

Note that 'GAP Analysis' has also been used as a means for classification of how well a product or solution meets a targeted need or set of requirements. In this case, 'GAP' can be used as a ranking of 'Good', 'Average' or 'Poor'. This terminology does appear in the PRINCE2 project management publication from the OGC.

GAP Analysis and New Products:

The need for new products or additions to existing lines may have emerged from the portfolio analyses, in particular from the use of the Boston Growth-share matrix or the need will have emerged from the regular process of following trends in the requirements of consumers. At some point a gap will have emerged between what the existing products offer the consumer and what the consumer demands. That gap has to be filled if the organization is to survive and grow.

To identify the gap in the market, the technique of Gap analysis can be used. Thus an examination of what profits are forecast to be for the organization as a whole compared with where the organization (in particular its shareholders) 'wants' those profits to be represents what is called the planning Gap: this shows what is needed of new activities in general and of new products in particular.

The planning Gap may be divided into four main elements:

1. Usage Gap:

This is the Gap between the total potential for the market and the actual current usage by all the consumers in the market. Clearly two figures are needed for this calculation:
 Market Potential:

The most difficult estimate to make is that of the total potential available to the whole market, including all segments covered by all competitive brands. It is often achieved by determining the maximum potential individual usage, and extrapolating this by the maximum number of potential consumers. This is inevitably a judgment rather than a scientific extrapolation, but some of the macro-forecasting techniques may assist in making this estimate more soundly based.

The maximum number of consumers available will usually be determined by market research, but it may sometimes be calculated from demographic data or government statistics. Ultimately there will, of course, be limitations on the number of consumers. For guidance one can look to the numbers using similar products. Alternatively, one can look to what has happened in other countries. It is often suggested that Europe follows patterns set in the USA, but after a time-lag of a decade or so. The increased affluence of all the major Western economies means that such a lag can now be much shorter.
The maximum potential individual usage, or at least the maximum attainable average usage (there will always be a spread of usage across a range of customers), will usually be determined from market research figures. It is important, however, to consider what lies behind such usage.

2. Product Gap:

The Product Gap, which could also be described as the segment or positioning gap, represents that part of the market from which the individual organization is excluded because of product or service characteristics. This may have come about because the market has been segmented and the organization does not have offerings in some segments, or it may be because the positioning of its offering effectively excludes it from certain groups of potential consumers, because there are competitive offerings much better placed in relation to these groups.

This segmentation may well be the result of deliberate policy. Segmentation and positioning are very powerful marketing techniques; but the trade-off, to be set against the improved focus, is that some parts of the market may effectively be put beyond reach. On the other hand, it may frequently be by default; the organization has not thought about its positioning, and has simply let its offerings drift to where they now are.

The Product Gap is probably the main element of the planning gap in which the organization can have a productive input; hence the emphasis on the importance of correct positioning.

3. Competitive Gap:

What is left represents the gap resulting from the competitive performance. This Competitive Gap is the share of business achieved among similar products, sold in the same market segment and with similar distribution patterns - or at least, in any comparison, after such effects have been discounted. Needless to say, it is not a factor in the case of the monopoly provision of services by the public sector.

The Competitive Gap represents the effects of factors such as price and promotion, both the absolute level and the effectiveness of its messages. It is what marketing is popularly supposed to be about.


4. Market Gap Analysis:

In the type of analysis described above, gaps in the product range are looked for. Another perspective (essentially taking the `product gap' to its logical conclusion) is to look for gaps in the 'market' (in a variation on `product positioning', and using the multidimensional `mapping'), which the company could profitably address, regardless of where its current products stand.

Many marketers would, indeed, question the worth of the theoretical gap analysis described earlier. Instead, they would immediately start proactively to pursue a search for a competitive advantage.


A Service Quality Audit:
Application of the Gap Analysis Model



Gap Analysis Model. The starting premise for the model is that “perceived service quality (or satisfaction with service) is a function of the difference between expected service levels and delivered (or perceived) service.” If this premise holds, as the authors found it does in field research for several financial and other service companies, then the key to customer satisfaction is managing both customer expectations and actual delivered service. The following diagram, which summarizes how perceived service can diverge from expected service, constitutes the essence of the Gap Analysis Model.









Consumer


















Conceptual Model of Service Quality









Conceptual Model

Above is a conceptual model; conceptual because it is a definition of service quality and the gaps therein; it is also operational in that you can apply this framework to analyze a problem.
If you do have a satisfaction gap, for example, you should look at other four gaps that contribute to it. Explanation of the gaps:
 Gap 1 – If management perceptions of customer are correct.
 Gap 2 – System design gap: if you understood what customers want, have you designed a system capable of delivering that quality of service?
 Gap 3 – Operation/execution gap: are you failing in execution of service?
 Gap 4 – Communications gap: how well do you communicate to internal and external worlds?
 Gap 5 is the result of the other four gaps.


 Explanation of the Conceptual Model In-Depth:

 Why does Gap 1 (understanding customer) exist?

 Lack of market survey or incorrect interpretation of survey.
 Inadequate knowledge of customer needs – the company is too introverted, wrongly assuming “we know what customers want”.
 Management is so far away from where service is being delivered. We can measure that distance as the number of layers in an organization. Too many layers make the sharing of information very difficult.
 The companies we have now are still based on some precepts evolved since the industrial revolution – they focus on productivity and division of labor. It has worked very well, in that firms in general have prospered, demand increased, and successful firms have added more people and supervisors. Eventually, they needed to have supervisors of supervisors, in effect building a pyramid structure. It was part of the old social contract: people at the top think, those on bottom do, and those in the middle watch. This structure worked well, but only in a world that moved slowly and where competition was not truly global and trade was not completely free of boundaries and constraints.
 That pyramid structure has started crumbling as change has happened at a faster rate. Also, the old social contract no longer holds in developed countries.

As a response structures are more flexible – we all think and all do – and we have fewer layers. Customer service representatives need to be very well prepared so they can think, do, and take initiative. That is the new contract.

 What is the reason for Gap 2?
Assume we know what customer wants: why do we design an organization that’s not capable of delivering?
 It’s hard to go from intangible ideas to an actual, physical organization.
 The industry is not agile enough to keep up with customers.
 We don’t build a system that has flexible technology.
 We lack the ability to develop a system with the needs of the environment in mind.
 …. Apparently, this process is harder than it appears.
 I give this lecture around the world – managers say this sounds great, but their employees are not capable of doing it. Those managers are biggest enemies of their companies. It is true employees cannot do this overnight, but if you know where you’re going and where you are, you can design a process to change over time.

 Why don’t people execute adequately (Gap 3)?
 Companies talk about activities but not results.
 People’s motivations may not be aligned.
 They may not have the necessary tools or staff.
 People don’t like change; but change has to be viewed as a renewal; as an opportunity, rather than a hurdle.
 People have ambiguous jobs or conflicting objectives.
 People are not selected carefully or trained properly.

 Why is there miscommunication; both within their organization or externally (Gap 4)?
 There’s a lack of coordination between different functions of the firm. You cannot fully separate customer service from operations and from development, etc.





Recommendation for Improving the Service Quality:

Parasuraman, Berry and Zeithaml who are academic research pioneers on service offer 9 lessons that they maintain are essentials for improving service quality across service industries:

1. Listening:

Understand what customers really want through continuous learning about the expectation and perceptions of customers and noncustomers
E.g.; by means of service quality information system

2. Reliability:

Reliability is the single most important dimensions of service quality and must be a service priority

3. Basic Service:

Service companies must deliver the basics and do what they are supposed to do keep promises, use common sense, listen to customers, keep customers informed and be determine d to deliver value to customers.

4. Service Design:

Develop a holistic view of the service while managing its many details.

5. Recovery:

To satisfy customers who encounter a service problem, service companies should encourage customers to complain (and make it is easy for them to do so) respond quickly and personally, and develop a problem resolution system.

Surprising customers although reliability is the most important dimension in meeting customer’s service expectations process dimension s.

E.g. assurance, responsiveness and empathy are most important in exceeding customer’s expectations for example by surprising them with uncommon swiftness grace courtesy competence commitment and understanding.
6. Fair Play:

Service companies must make special efforts to be fair and to demonstrate fairness to customers and employees.

7. Team Work:

Teamwork is what enables large organization to deliver service with care and attentiveness by improving employee motivation and capabilities.

8. Employee Research:

Conduct research with employees to reveal why service problems occur and what companies must do to solve problems.

9. Servant Leadership:

Quality service comes from inspired leadership throughout the organization from excellent service system design from the effective use of information and technology and from a slow to change, invisible, all; powerful, internal force called corporate culture.
Benefits:

1. Provides access to a greater customer base (to those who require quality standards).
2. Enhances competitive position.
3. Improves customer service and overall satisfaction.
4. Establishes a method to gather and Measure quality and performance data.
5. Demonstrates a commitment to product Quality and customer value (focus on cycle-time reductions; on-time deliveries; return Rates; reliability; defect elimination).
6. Demonstrates the company’s accountability and focus on continuous improvement.
7. Enables the development of stronger customer/supplier relationships.
8. Decreases costs of product life cycle management, audits, supplier management expenses, and general operations.
9. Delivers improvements in:
 Performance (manufacturing and service)
 Productivity
 Reliability of processes and production
 Life-cycle management
 Supply chain efficiencies
 Employee teamwork
10. Increases the efficiency of external audit and site visits.
11. Ensures operational consistency.
12. Quantifies performance results.

ACHIEVING SERVICE QUALITY

Best Practices of Service Quality Management:

Various studies have shown that well- managed service companies share the following common practices : a strategic concept , a history of top-management commitment to quality, high standards, self service technologies, systems for monitoring service performance and customer complaints, and an emphasis on employee satisfaction.

1. Strategic Concept:

Top services companies are “customer obsessed”. They have a clear sense of their target customers and their needs. They have developed a distinctive strategy for satisfying these needs.

2. Top Management Commitment:

Organizations such as Marriot, Disney, Xerox, Apollo, Hospitals, Infosys and Wipro have a thorough commitment to service quality. Their senior and top management look not only at financial performance but also at service performance.

3. High Standards:

The best service providers set service quality standards. Citibank aims to answer phone calls within 10 seconds and customer letters within 2 days. The standards must be set appropriately high. A 98 percent accuracy standard may sound good, but it would result in FedEx losing 64,000 packages a day; 6 misspelled words on each page of a book; 400,000 mis-filled prescriptions daily; and unsafe drinking water 8 days a year. One can distinguish between companies offering “merely good” service and those offering “breakthrough” service, aimed at being 100 percent detect-free.

Pre-Requisites for Achieving Service Quality:

Quality is not an event, it is an ongoing process. As far as service organizations are concerned, quality is not the responsibility of the quality control department only; rather it is a matter to be taken care of by the entire business system. The following are the pre-requisites for achieving service quality.

1. Visionary Leader:

Presence of a Visionary leader at the top is a necessary element for achieving quality. The vision of the leader guides the organizational effort into achieving high standard of service quality. A visionary leader through his verbal and symbolic communication shows where the future lies and of-course his vision has to be shared by each and every employee of the organization.

2. Setting High Performance Standards:

Champion of high quality always emphasizes 100% quality, thereby ruling out possibility of defects and shortfalls. Everything right the first time and always is a typical expression of this psyche. It must be made clear to every employee that one is expected to give one’s best during each ‘Moment of Truth’. ‘Chalta Hai’ attitude won’t work and won’t be accepted in any case.

3. Management’s Commitment and Support:

The process of quality improvement has to be taken as an integrated management process. Only Top management has the position and clout to design a Vale System that has at its core the total customer satisfaction.

4. Preparing the Employees:

The organization needs to prepare their employees first so that they are capable of and feel like delivering quality services. Organizing Employee Training Programs to cultivate and have their technical and inter-personal relations and communication skills need to be undertaken as and when the need arises. It is very important to note that employee satisfaction precedes customer satisfaction. Only satisfied employees can deliver quality services. However, it cannot be taken for granted that high employee satisfaction automatically gets translated into quality, the employees needs to be motivated enough to meet and exceed customers expectations.
5. System for Addressing Customer Complaints:

The major problem today is that unsatisfied customers hardly complain, they simply stop buying such goods and services without testing the marketer know even a shred as to what went wrong and where. There should be a system of complain and suggestions and appropriate action should be taken. The customer should be informed about the action taken and thanked.

6. System for Monitoring Service Quality:

Commitment to quality also means that services delivered must be continuously monitored to assess as to what extent the customers are satisfied with the service offering of the firm. Internal performance analysis, customer satisfaction analysis and specialist marketing Research are the improvements are included where needed.

Recommendations:

 Design services in cooperation with customers.
 Focus your improvement programs outward, on market "break-points".
 Create a tangible representation of service quality.
 Use teamwork to promote service excellence.
 Create a “service-bias” based on these service quality determinants:
 Professionalism,
 Attitudes/behaviors,
 Accessibility/flexibility,
 Reliability/trustworthiness,
 Service recovery, and
 Reputation/credibility.
 Develop proper measurements.
 Employee selection, job design and training are crucial to building customer satisfaction and SQ.
 Reward total quality efforts in marketing.
 View service as a process, not a series of functions.
 Integrate customer information across sales channels.


Deming's 14 Points

Deming offered fourteen key principles for management for transforming business effectiveness. In summary:

1. Create constancy of purpose for the improvement of product and service, with the aim to become competitive, stay in business, and provide jobs.
2. Adopt a new philosophy of cooperation in which everybody wins (“win-win”) and put it into practice by teaching it to employees, customers and suppliers.
3. Cease dependence on mass inspection to achieve quality. Instead, improve the process and build quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost in the long run. Move toward a single supplier for any one item, based on a long-term relationship of loyalty and trust.
5. Improve constantly, and forever, the system of production, service, planning, of any activity. This will improve quality and productivity and thus constantly decrease costs.
6. Institute training for skills.
7. Adopt and institute leadership for the management of people, recognizing their different abilities, capabilities, and aspiration. The aim of leadership should be to help people, machines, and gadgets do a better job. Leadership of management is in need of overhaul, as well as leadership of production workers.
8. Drive out fear and build trust so that everyone can work more effectively.
9. Break down barriers between departments. Abolish competition and build a win-win system of cooperation within the organization. People in research, design, sales, and production must work as a team to foresee problems of production and use that might be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets asking for zero defects or new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11. Eliminate numerical goals, numerical quotas and management by objectives. Substitute leadership.
12. Remove barriers that rob people of joy in their work. This will mean abolishing the annual rating or merit system that ranks people and creates competition and conflict.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

Case Studies:
Ritz Carlton and British Airways Cases:

 Questions from syllabus:

 What objectives was each organization pursuing in developing the customer information systems described in the cases? How effective have these systems been in meeting these objectives?
 What might each business do to further exploit the information gathered by these systems?
 Has each organization successfully integrated its information-based approach to managing customer service with its human resource strategy?

We’ll discuss both cases (Ritz Carlton and British Airways) simultaneously, and contrast them as we go along:
In both cases, the company wants to be the best. Some senior executive’s say they want to be the best – but only if we make money and other conditions. Other companies want to be best and establish a new standard, like FedEx.
What impressed you about either case?

 Ritz Carlton:

 Commitment to quality in customer interface; had best in class focus about how to ensure personalized service; utilize system support that would follow customer from hotel to hotel; every employee can edit preferences of customer.
 All staff empowered to think and do. Selected, trained, and empowered. Customer service is the responsibility of every employee. Power of being able to reach customers through all parts of the organization.
 The focus on prevention of problems, not just dealing with it after the fact.
 How does Ritz Carlton learn? They learn form their own mistakes: identify mistakes that we do (they have a method of capturing mistakes); listen a lot to customers; note down all preferences and try to anticipate unanticipated needs; learn from each other – share knowledge of a mistake since customer service is the responsibility of all, not just one department; executives are involved; it starts with hiring process and they invest a lot in training; training is conducted in-house (some companies outsource it elsewhere); rewards system – the most important part is feeling we work in a company that’s best; Ritz Carlton is a network of hotels, not just a collection of individual hotels. No blame is placed on a person who made a mistake (non-attribution); Ritz Carlton is a “PSP” (“People Service Profit”) company.
 British Airways:

 Put a system in place to keep learning. As for problems from vendors, they kept same spirit (no immediate retribution, teamwork) to help vendors with service. Kept changing services to fit customer needs.
 Had multiple venues for customer input, because you want people to complain to learn from their grievances.
Example of materialization of services from either case?

 Ritz Carlton:

 Guest can have casual conversation with associate – and that affects what services they get the next day.
 Employees know guest’s name and information when they come in.
 Associate can give back money to customer – this empowerment is materialization of importance of customer.
 If a room is not ready one place, when to other hotel and made sure it was ready – by telling customer, they know that hotel is thinking of them.
 But some say Ritz Carlton has money to do it, but smaller hotels can’t. This isn’t necessarily true – according to a recent ranking of hotels, one small economic hotel had excellent service on par with the Four Seasons and the Ritz Carlton. It is similar to automobile innovations, which start at top and trickle down.

 British Airways:

Front-line desk workers can send customers a gift.

 What did you learn from the British Airways case?

 We recognized the major differentiator between them and their competitors: their competitors thought they were just flying planes, but British Airways realized that they’re in the service business to give a total customer solution. This is not as revolutionary as you might think – Singapore Airlines offers similar service.
 We learned that response time is critical. They response to customer problems or questions within a few days.
 British Airlines actually wanted the complaints from customers, so they could learn.
 The company saved money because they were able to retain more customers
 Customers can actually become more loyal to a company if they experience a problem and had it fixed than if there was never a problem at all.
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Preksha Shetty
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Re: Managing Service Quality - October 2nd, 2008

u gave me the notes of 1 full chapter.... thank u....
can u post ne other notes related to marketing? i would appreciate it.
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nil08
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Re: Managing Service Quality - February 21st, 2009

hello....ur prjct s too gud can u pls send me sum more info. n same pls
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Re: Managing Service Quality - April 20th, 2009

thank you u r the best really realy thanxxxxxxxxxxxxxxxxxx
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Re: Managing Service Quality - August 21st, 2010

thnx ya...iz relly helpful ...(smiles)
thnx ya...iz relly helpful ...(smiles)
thnx ya...iz relly helpful ...(smiles)
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Re: Managing Service Quality - September 6th, 2010

it covered 1 chapter ..its really helpful..thank you so much.
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