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Chapter 5

Consumer Perceptions of Service

 Objectives of Chapter
 Provide with definitions and understanding of
satisfaction and quality and these two types of
customer perceptions are related.
 Examine models of satisfaction and service quality
 List key drivers of satisfaction and service quality
 Describe how to measure and analyze satisfaction
data
 Highlight strategies for managing customer
perceptions of service.
 Customer Perceptions
• Perceptions are always considered relative
to expectation.
• Expectations are dynamic, evaluation may
shift over time- from person to person and
from culture to culture.
• Customers perceive services in terms of the
quality of service and how satisfied they are
with their overall experiences.
 Customer Perceptions
• What is considered quality service or the
things that satisfy customers today may be
different tomorrow?

• At this end we should know:

1. What is customer perceptions of service?
2. Satisfaction versus service quality.
Customer Satisfaction Vs Service Quality
Two terms are used interchangeably. But
consensus is growing that these two terms
are different in terms of their underlying
causes and outcomes. Satisfaction is
generally viewed as a broader concept,
whereas service quality assessment focuses
specifically on dimensions of service. The
following figure shows the dimensions of
these two:
 Satisfaction versus Service Quality
Reliability
Responsiveness Interaction
Assurance
Empathy
quality
Tangibles

Reliability
Responsiveness Physical Service Situational
Assurance Environment quality factors
Empathy quality
Tangibles
Customer
Reliability Product satisfaction
Responsiveness Outcome quality
Assurance
Empathy quality
Tangibles

Price Personal
factors
Fig: Customer perceptions of Quality and Customer satisfaction
 Customer Satisfaction
• Oliver defines, “Satisfaction is the
customer’s fulfillment of response. It
is a judgment that a product or
service feature or the product or
service itself provides a pleasurable
level of consumption related
fulfillment.”
 What is Customer Satisfaction
• Satisfaction is a consumer’s post-
purchase evaluation of the overall service
experience (processes and outcome).
• It is an effective (emotion) state or feeling,
reaction in which the consumer’s needs,
desires and expectations during the
course of the service experience have
been met or exceeded.
 What is Customer Satisfaction
Satisfaction can be related to other types
of feelings depending on the particular
context or type of service. Satisfaction can
be viewed as:
1. Contentment- don't know a lot about service
2. Pleasure- feel good with a sense of happiness
3. Delight- surprise in a positive way
4. Relief- removal of negative leads
 What is Customer Dissatisfaction

Failure to meet needs and expectations

is assumed to result in dissatisfaction
with the product or service.
 What Determines Customer Satisfaction
Customer satisfaction is influenced by:
1. Product and Service Features
2. Customer Emotions
3. Attributions for Service Success or Failure
4. Perceptions of Equity or Fairness
5. Other Consumers, Family Members and
Coworkers.
 What Determines Customer Satisfaction
1. Product and service features
Customer satisfaction with a product and
service is influenced significantly by the
customer’s evaluation of product and service
features.
• Important features of a resort hotel:
1. Pool area
2. Access to golf facilities
3. Restaurant
4. Room comfort and privacy
5. Helpfulness and courtesy of staffs
6. Room price
7. So forth
What Determines Customer Satisfaction
2. Customer emotions
Customer’s emotion can also affect their
perceptions of satisfaction with products
and services. These emotion can be:
1.Stable emotion
2.Preexisting emotion i.e. Mood state or life
satisfaction
 What Determines Customer Satisfaction
3. Attributions for service success or failure
• Attribution- the perceived causes of events influence
the customer perception of satisfaction. When
consumers are surprised by an outcome (the service
is either much better or much worse than expected),
consumers tend to look for the reasons, and their
assessments of the reasons can influence their
satisfaction.
• E.g. If a customer of a weight-loss organization fails
to lose weight as hopped, the customer will likely
search for the causes. Customers take at least
partial responsibility to things turn out.
 What Determines Customer Satisfaction
4. Perceptions of equity or fairness
Customer satisfaction is also influenced by
perceptions of equity or fairness.
• Customer asked themselves:
1. Have I been treated fairly compared to other
customers?
2. Did other customers get better treatment,
better price or better quality of service?
3. Did I pay a fair price for the service?
4. Was I treated well exchange for what I paid
and the effort I spent?
 What Determines Customer Satisfaction
5. Other Consumes, Family Members and
Coworkers

Consumer satisfaction is often influenced by

other people. For example, the satisfaction
with a family vacation trip is a dynamic
phenomenon influenced by the reactions and
expressions of individual family members
over the duration of the vacation.
 Service Quality
Service quality is generally viewed as the output of the
service delivery system, especially in the case of pure
service systems. Moreover, service quality is linked to
consumer satisfaction.
A critical element of customer perceptions
As it plays an important role in assuring the safety of
consumers, marketers need to consider this issue
carefully to compete effectively in business- both
manufacturing and service.
For example – customers leaving a restaurant or hotel
are asked if they were satisfied with the service they
received. If they answer “no,” one tends to assume
that service was poor.
 Service Quality Definition
“the outcome of an evaluation process where the
customers compare their expectations with service
they have received.” (Gronroos, 1982).
Every customer has an ideal expectation of the service
they want to receive. Service quality measures how
well a service is delivered compared to customer
expectations.
Two important issues are:
i. What customers evaluate,
ii. Five dimensions of service based on which
consumers form their judgment.
 Outcome, Interaction and Physical
Environment Quality
What is it that consumers evaluate when
judging service quality? Over the years, service
researchers have suggested that consumers
judge the quality of services based on their
perceptions of the technical outcome provided,
the process by which that outcome was
delivered, and the quality of the physical
surroundings where the service is delivered.
 Outcome, Interaction and Physical
Environment Quality
It has been agreed by the researchers over the
years that the same is done based on:
1. Perceptions of technical outcome provided.
2. The process by which that outcome was
delivered.
3. The quality of the physical surroundings where
the service is delivered.

1. Outcome 2. Interaction 3. Physical

quality quality Environment
quality
 Outcome, Interaction and Physical
Environment Quality
Outcome
i. A restaurant customer will judge the service on
his/her perceptions of the meal (technical
outcome quality)
ii. A legal service client will judge the quality of the
technical outcome, or how the court case was
resolved,
Interaction quality
i. Lawyers timeliness in returning phone calls. His
empathy for the client and his courtesy and
listening skills
ii. How the meal was served, how the employees
interact with the client
 Outcome, Interaction and Physical
Environment Quality
Physical Environment quality
i. The decor and surroundings (physical
environment quality) of both the law firm
and the restaurant will also affect the
customer’s perceptions of overall service
quality.
 Service Quality Dimension
Researchers suggest that customers do not
perceive quality in a unidimensional way,
but rather judge quality based on multiple
factors relevant to the context. Research
identified five dimensions of service quality
that apply across a variety of service
contexts.
 Service Quality Dimension
• Current research also indicates that in terms of
service quality, the dimensions and the relative
emphases on each are different for different
industries.

• So dimensions developed in one or a group of

service industries may not be directly applicable
to another group of service industries.
Measuring Service Quality: SERVQUAL Model
To measure the service quality, Parasuraman,
Zeithaml & Berry developed a model known as
SERVQUAL model which consists of five dimensions:
Reliability

Responsiveness
Responsiveness

Service
Service
Assurance Quality
Quality

Empathy
Empathy

Tangibles
 SERVQUAL Dimensions of Service Quality
The SERVQUAL model was originally developed in
1988 and later refined in 1991 as a multidimensional
scale to capture customer perceptions and
expectations of service quality which involves the
calculation of the differences between expectations
and perceptions on a number of pre-specified
criteria, is currently the most popular measure of
service quality.
 SERVQUAL Dimensions of Service Quality

The model has undergone numerous

improvements and revisions since published.
The scale currently contains 21 pairs of items
considering consumer perception and
expectation factors that are distributed
throughout the five service quality
dimensions.
SERVQUAL Dimensions of Service Quality
SERVQUAL model highlights the major
quality requirements of delivered service in
such five dimensions that the consumers
consider in their assessments of service quality:

Reliability (Delivering on Promises)– Ability to

perform the promised service dependably and
accurately. It includes reliability, dependability,
delivering on promises, accuracy, and consistency etc.
SERVQUAL Dimensions of Service Quality
Responsiveness (willingness to help)–
Willingness to help customers and provide
prompt service. It includes responsiveness,
promptness, helpfulness etc.

Assurance (Inspiring Trust and Confidence)

– Employees’ knowledge and courtesy and
their ability to inspire trust and confidence.
It encompasses competence, courtesy,
credibility, security etc.
 SERVQUAL Dimensions of Service Quality
Empathy (treating Customer as Individuals) – It
refers to the caring, individualized attention the
service firm provides each customer. It includes
easy access, good communication, customer
understanding, personalised attention etc.
Tangibles (Physical Evidence) – It refers to
physical facilities, equipment, and appearance of
a service firm’s employees. When a patient in the
waiting room of a clinic sees the doctor’s
certificate, he becomes aware of the quality of
service he is about to receive.
SERVQUAL Dimensions of Service Quality
• Reliability
– dependability Get it right
the first time!
– delivering on promises
– accuracy
– consistency
• Responsiveness
– promptness
– helpfulness

and on time!
 SERVQUAL Dimensions of Service Quality

• Assurance
– competence
– courtesy I feel
– credibility safe
– security
• Empathy
– easy access
– good communication
– customer understanding They listen
– personalised attention to me
 SERVQUAL Dimensions of Service Quality

• Tangibles
– physical evidence

People look
smart
 Example Bank
Dimension Description Example for Bank

Tangibles Physical facilities, ATM access; lobby layout;

equipment, and appearance tellers dressed professionally
of personnel.

Reliability Ability to perform the Promised deadlines met;

promised service reassuring problem
dependably and accurately. resolution

Responsiv Willingness to help Respond quickly to customer

customers and provide requests; willingness to help
eness prompt service. customers

Assurance Knowledge and courtesy of Trustworthiness; safe

employees and their ability environment around ATMs;
to inspire trust and polite tellers
confidence.

Empathy Caring, individualized Personal attention to

attention the firm provides customers; convenient hours
its customers
SERVQUAL Dimensions of Service Quality
Statements in the Statements in the empathy
reliability dimension dimension
1. When _______ Company 1. _______ Company gives you
promises to do something by a individual attention.
certain time, it does so.
2. _______ Company has
2. When you have a problem, employees who give you
_______ Company shows a
sincere interest in solving it.
individual attention.
3. _______ Company performs the 3. _______ Company has your
service right the first time. best interests at heart.
4. _______ Company provides its 4. Employees of _______
services at the time it promises Company understand your
to do so. specific needs.
5. _______ Company keeps
customers informed about when
services will be performed.
 SERVQUAL Dimensions of Service Quality
Statements in the Statements in the tangibles
responsiveness dimension dimension
1. Employees in _______ 1. _______ Company has
Company give you prompt modern-looking equipment.
service. 2. _______ Company’s physical
2. Employees in _______ facilities are visually
Company are always willing to appealing.
help you. 3. _______ Company’s employees
3. Employees in _______ appear neat.
Company are never too busy 4. Materials associated with the
to respond to your request. service (such as pamphlets or
statements) are visually
appealing at _______
Company.
5. _______ Company has
convenient business hours.
SERVQUAL Dimensions of Service Quality

Statements in the assurance dimension

1. The behavior of employees in ____ Company instills

confidence in you.
2. You feel safe in your transactions with _______ Company.
3. Employees in _______ Company are consistently courteous
with you.
4. Employees in _______ Company have the knowledge to
answer your questions.
Example Airline
Example Airline (cont.)
 E-Service Quality
Research identified seven dimensions that are
critical for core service evaluation (four
dimensions) and service recovery evaluation
(three dimensions).
Four core dimensions that consumers use to
evaluate websites at which they experience no
questions or problems are:
1. Efficiency
2. Fulfillment
3. Reliability
4. Privacy
 E-Service Quality
1. Efficiency: The ease and speed of accessing
and using the site.
2. Fulfillment: The accuracy of service promises,
having products in stock, and delivering the
products in the promised time.
3. Reliability: The correct technical functioning
of the site.
4. Privacy: The degree to which the site is safe
and protect customer information.
 E-Service Quality
When customers have problems or
questions with the sites, they use
additional three dimensions to judge e-
service quality:
1. Responsiveness
2. Compensation
3. Contact
 E-Service Quality

1. Responsiveness: Handling the problems

and returns through the site
2. Compensation: The degree to which customers
are compensated for problems
3. Contact: The degree to which help can be
assessed by telephone or online representatives.