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Quality Management in Service Industries Essay

Part 1. Introduction

In present time, there is a worldwide trend that service industry occupies a dominant position in the economy in the majority of developed countries and areas. Without a doubt, major changes in government policy and business transactions have a significant influence on the flourish of services industry. However, nowadays the increased value of services also brings big pressure on marketers to implement different strategies because there are big variances in the features of service and physical product.

To start with, this essay will focus on the reasons why is quality such an important issue in the marketing of services. Furthermore, the reasons why is quality more difficult to manage in service industries than it is in the case of physical goods will also be discussed in this essay.

Part 2. Basic Definition

I. Quality In manufacturing, a measure of excellence or a state of being free from defects, deficiencies, and significant variations, brought about by the strict and consistent adherence to measurable and verifiable standards to achieve uniformity of output that satisfies specific customer or user requirements. ISO 8402-1986 standard defines quality as “the totality of features and characteristics of a product or service that bears its ability to satisfy stated or implied needs. “

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II. Services As one kind of products in the market, “services are deeds, processes, and performance provided or coproduced by one entity or person for another entity or person. Services as products represent a wide range of intangible product offering that customers value and pay for in the marketplace. ”(Bruhn & Georgi, 2006) For example, haircuts, consulting, training and travel are representative services.

Quality Management in Service Industries

In present society, there is a staggering increasing rate in services industry, which is defined as “all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced, and provides added value in forms that are essentially intangible concerns of its first purchaser”. (Lovelock, & Wirtz, 2006)

III. Service Quality Service quality is defined as “the customer’s evaluation of a service, where they compared what the receive according to the service’s characteristics with their exceptions regarding these characteristics. (Bruhn & Georgi, 2006) Therefore, it is apparent that delivering quality service is linked to customer satisfaction and retention, competitive advantage and long-term profitability. In general customers usually look at the quality of both the process and outcomes of services delivery, which means they take both of technical quality and functional quality into account.

Part 3. The importance of quality in the marketing of services

The biggest barrier for customers in evaluating service quality is the intangible nature of the service.

Most consumers lack the knowledge or the skills to evaluate the quality of many types of services. Therefore, they must place a great deal of faith in the integrity and competence of the service provider. Despite the difficulties in evaluating quality, service quality may be the only way customers can choose one service over another. For this reason, services marketers live or die by understanding how consumers judge service quality. The following table defines five dimensions that customers use when evaluating the importance of service quality.

They are tangibles, reliability, responsiveness, assurance, and empathy. (Goodwin and R. Radford, 2008) Reliability is the most important in determining customer evaluations of service quality of the five. Services managers pay a great deal of attention to the tangibles dimension of service quality. Tangible attributes, or search qualities, such as the appearance of facilities and employees, are often the only aspects of a service that can be viewed before purchases and consumption. Consequently, service managers must ensure that these tangible lements are consistent with the overall image of the service product. Except for the tangibles dimension, the criteria that customers use to judge service quality are intangible. For example, how does a customer judge reliability? Since dimensions such as reliability cannot be examined with the sense, consumers must rely on other ways of judging service criteria. One of the most important factors in the judgments of service quality by consumers is service expectations. These are influenced by past experiences with the service, oral communication from other customers and the service company’s own advertising.

For example, customers are usually eager to try a new restaurant, especially when friends recommend it. These same customers may have also seen advertisements placed by the restaurant. As a result, these customers have an idea of what to expect when they visit the restaurant for the first time. When they finally eat out at the restaurant, the quality they experience will change the expectations they have for their next visit and their own comments to friends and colleagues. This is the major reason why providing consistent high service quality is important.

If the quality of a restaurant, or any services, begins to deteriorate, customers will alter their own expectations and oral communication to others accordingly. The most critical aspect of service quality specifications is managers’ commitment to service quality. Service managers who are committed to quality become role models for all employees in the organization. (Kasper, H. , van Helsdingen, P. , & De Vries, W, 1999) Such commitment motivates customer contact employees to comply with service specifications.

It is also important that all managers within the organization embrace this commitment, especially front line managers, who are much closer to customers than higher level managers. Consumers want to have a good shopping experience and the most important aspect of a consumer’s shopping experience is her quality of service. The most important aspect of a consumer’s decision on where to shop is going to be her perception concerning the quality of customer service she receives is congruent with the level of respect and courtesy required to earn and retain er loyalty as a contentious consumer. If an organization fails to provide quality customer service, the possibility of that customer’s continuing as a patron of the organization is highly doubtful. A customer shops at the locations where he or she feels comfortable and where the service provided is of the highest quality. Quality customer service is a important aspect of a shopper’s experience and if this is overlooked at any time by an organization, the company’s ability to consistently provide continued value to the consumer will be seriously compromised.

The customer service is an important aspect of any business’s ability to remain a market force in an increasingly competitive and diverse marketplace. Good customer service, above all else, is the primary factor in an organization’s ability to remain growth and increase profitability over the long-term. (Mudie, P. & Cottam, A. 1999) Consistently addressing the needs of the consumer through attention to detail, prompt and good-mannered assistance, and the providing of knowledgeable employees is the first objective in providing a memorable shopping experience.

Effective customer service policies focus on providing the customer with customer service that is always consistent and focuses on the customer. When an organization creates a customer-centric and high-quality customer service policy, the organization will continue to create lasting value for the consumer. The key to providing good quality customer service and retaining a customer for the long term is providing the customer with lasting value during his or her shopping experience. A company should promote lasting value in the products it provides and in the quality of service provided to the customer by the organization’s employees.

Companies that continually focus on the best ways to provide the customer with lasting value and quality customer service compared to the services that the customer could expect to receive from a competitor are assured of the potential to create loyal repeat customers out of each customer that the organization assists. Providing good customer service is important to retaining customers against a competitor who sells the same or similar products. (Mudie, P. & Cottam, A. 1999) When two competitors offer the same products at similar prices, the customer will consistently return to the location where they received the best ervice. In providing the best service available, an organization creates lasting value for the customer and any organization that focuses on providing lasting value and unsurpassed customer service will continually ensure that the customers the organization assists become customers for life. Adopting policies that focus on creating lasting value for the customer and provides him with unsurpassed customer service inherently gains long-term loyalty from that consumer.

Part 4. Quality is more difficult to manage in service industries than it is in the case of physical goods

The service industry alters the goods they provide, while the physical goods are presented as is. If you are buying a pair of jeans, for instance, then you get that as is. As long as nothing changes concerning those jeans, then it is easy to regulate and maintain their quality. But if you get a haircut, for instance, then no two will be alike and that increases the chances for mishap. Not only are you getting it from different individuals, but each person cutting the hair won’t always provide the same type of service from one person to another.

The service industry relies more heavily on human performance than that of the physical goods industry. In the physical goods industry, you can say a quality product is one that has certain measureable characteristics. For example, we could say a quality car is testing safely to a certain standard, getting a certain number of miles per gallon or attaining a certain number of miles per hour in so many seconds. In the services industries, this is much more difficult. We can not easily say what it is exactly that makes a service good for everyone, because it is subjective.

For example, you might want to cut your hair, but someone else might like theirs long; or you might want quick customer service more than quality customer service, while someone else might have an opposite idea. Once an organization understands its customers’ needs, it must establish goals to help ensure good service delivery. These goals, or service specifications, are typically set in terms of employee or machine performance. For example, a bank may require its employees to conform to a dress code. Likewise, the bank may require that all incoming phone calls be answered by the third ring. (Zeithaml, V. A. , Bitner, M.

J. & Gremler, D. D. 2009) Specifications like these can be very important in providing quality service as long as they are tied to the needs expressed by customers. Physical goods are considered quality dependant only on the process of their manufacture. Services on the other hand depend both on the process and the customers’ opinion.

Part 5. Conclusion

To sum up, quality is an important issue in the marketing of service and it is more difficult to manage in service industries than in the case of physical goods. Quality customer service experiences are the driving force behind customer retention and customer satisfaction.

Maximizing the benefits provided through sound customer service policies ensures that the satisfied consumer will express his satisfaction to others and assist the company in continuing to grow their client base through acquisition of customers who are dissatisfied with the level of service they get from the organization’s competitors. Tapping into the ability of customer service to maximize this continuous opportunity for revenue is the single most important objective for any company looking to gain a competitive advantage in the highly diverse business environment of today.

In order to create the maximized value and satisfy customers, the marketers need to pay more attention to the quality management in service industries.

Part 6. References

Bruhn, M. & Georgi, D. 2006. Services marketing: managing the service value chain. Harlow, UK: Prentice Hall Financial Times. C. Goodwin and R. Radford, 2008. “Models of Service Delivery: An Integrative Perspective,” in Advances in Services Marketing and Management, ed. T. A. Swartz, D. E. Bowen, and S. W. Bowen, (Stamford, Ct: Jai Press) pp. 231-252. C.

Hegge-Kleiser, “American Express Travel-Related Services: A Human Resources Approach to Managing Quality,” in Managing Quality in America’s Most Admired Companies, ed. J. W. Spechler (San Francisco: Berrett-Koehler Publishers, 1993), pp. 205-212 J. Reynoso and B. Moores, “Operationalising the Quality on Internal Support Operations in Service Organizations,” in Advances in Services Marketing and Management, Vol. 6, eds. T. A. Swartz, D. E. Bowen, and S. W. Brown (Green-wich, CT: JAI Press, 1997), pp. 147-170 Kasper, H. , van Helsdingen, P. , & De Vries, W. 1999. Services marketing management: An international perspective.

Chichester: Wiley. Lovelock, C. & Wirtz, J. 2006. Services marketing (6th ed. ). Upper Saddle River NJ: Prentice? Hall. McColl? Kennedy, J. R (Ed. ). 2003. Services marketing: A managerial approach. Milton, Qld: John Wiley & Sons. Mudie, P. & Cottam, A. 1999. The management and marketing of services. Oxford: Butterworth? Heinemann. Pieter P. Tordoir (1995). The professional knowledge economy: the management and integration services in business organizations. p. 140. Zeithaml, V. A. , Bitner, M. J. & Gremler, D. D. 2009. Services marketing: Integrating customer focus across the firm (5th ed. ). Sydney: McGraw? Hill Irwin.

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