Quality Management in Service Industries

Topics: Service, Marketing, Customer service Pages: 7 (2171 words) Published: May 6, 2013
Quality Management in Service Industries

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."

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. 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....

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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