ANSAL INSTITUTE OF TECHNOLOGY & MANAGEMENT

Sushant Golf City, Lucknow

Course Code: NMBA-023 (Assignment)
Course Title: Customer Relationship Management
Instructor: Prof. Prarthana Shahi
Semester and Session: MBA-IInd Semester
Submitted By: Akriti Shukla
Roll No.: 02

Date of Submission: 02/04/2014

ASSIGNMENT-III
Q1. Define service Quality. Discuss the 10 determinants of service quality given by
Parasuraman.
A1. Service Quality: - Service quality is a focused evaluation that reflects the customer's
perception of specific dimensions of service: reliability, responsiveness, assurance, Empathy,
tangibles. Satisfaction, on other hand, is more inclusive: it is influenced by perceptions of service
quality, product quality, and price as well as situational factors and personal factors
Service quality affects customer satisfaction by providing performance (real benefits).
For example: - if consumers believe they have entered the McDonald's restaurant, they will get
food, service, high quality everywhere the same, no matter the location of the restaurant, put
forward by Millend M Lele (1995: 126).
The 10 determinants of Service Quality given by Parasuraman: 1. Competence: - is the possession of the required skills and knowledge to perform the
service. For example, there may be competence in the knowledge and skill of contact
personnel, knowledge and skill of operational support personnel and research capabilities
of the organization.
2. Courtesy: - is the consideration for the customer's property and a clean and neat
appearance of contact personnel, manifesting as politeness, respect, and friendliness.

3. Credibility: - includes factors such as trustworthiness, belief and honesty. It involves

having the customer's best interests at prime position. It may be influenced by company
name, company reputation and the personal characteristics of the contact personnel.
4. Security: - enables the customer to feel free from danger, risk or doubt including physical
safety, financial security and confidentiality.
5. Access: - is approachability and ease of contact. For example, convenient office
operation hours and locations.
6. Communication: - Means both informing customers in a language they are able to
understand and also listening to customers. A company may need to adjust its language
for the varying needs of its customers. Information might include for example,
explanation of the service and its cost, the relationship between services and costs and
assurances as to the way any problems are effectively managed.
7. Knowing the customer: - Means making an effort to understand the customer's
individual needs, providing individualized attention, recognizing the customer when they
arrive and so on. This in turn helps to delight the customers by rising above their
expectations.
8. Tangibles: - are the physical evidence of the service, for instance, the appearance of the
physical facilities, tools and equipment used to provide the service; the appearance of
personnel and communication materials and the presence of other customers in the
service facility.
9. Reliability: - is the ability to perform the promised service in a dependable and accurate
manner. The service is performed correctly on the first occasion, the accounting is
correct, records are up to date and schedules are kept.
10. Responsiveness: - is the readiness and willingness of employees to help customers by
providing prompt timely services, for example, mailing a transaction slip immediately or
setting up appointments quickly.
Q2. What is a service quality gap? Explain five gaps in detail along with diagram. What
preventive measures could be adopted by companies to minimize those gaps?
A2. Service Quality Gap: - From the viewpoint of business administration, service quality is an
achievement in customer service. It reflects at each service encounter. Customers form service
expectations from past experiences, word of mouth and advertisement. In general, Customers
compare perceived service with expected service in which if the former falls short of the latter
the customers are disappointed.

For example: - in the case of TAJ Hotels, Resorts and Palaces, wherein TAJ remaining the old
world, luxury brand in the five-star category, the umbrella branding was diluting the image of the
TAJ brand because although the different hotels such as Vivanta by Taj- the four star category,
Gateway in the three star category and Ginger the two star economy brand, were positioned and
categorised differently, customers still expected the high quality of Taj from all their properties.
The measurement of subjective aspects of customer service depends on the conformity of the
expected benefit with the perceived result. This in turns depends upon the customer's expectation
in terms of service, they might receive and the service provider's ability and talent to present this
expected service. Successful Companies add benefits to their offering that not only satisfy the
customers but also surprise and delight them. Delighting customers is a matter of exceeding their
expectations.
Explain five gaps in detail along with diagram: The gap model (also known as the "5 gaps model") of service quality is an important customersatisfaction framework. In "A conceptual model of service quality and its implications for future
research" (The Journal of Marketing, 1985), A. Parasuraman, VA Zeitham and LL Berry identify
five major gaps that face organizations seeking to meet customer's expectations of the customer
experience.

The five gaps that organizations should measure, manage and minimize:

Gap 1 is the distance between what customers expect and what managers think they
expect - Clearly survey research is a key way to narrow this gap.

Gap 2 is between management perception and the actual specification of the customer
experience - Managers need to make sure the organization is defining the level of service
they believe is needed.

Gap 3 is from the experience specification to the delivery of the experience - Managers
need to audit the customer experience that their organization currently delivers in order to
make sure it lives up to the spec.

Gap 4 is the gap between the delivery of the customer experience and what is
communicated to customers - All too often organizations exaggerate what will be
provided to customers, or discuss the best case rather than the likely case, raising
customer expectations and harming customer perceptions.

Finally, Gap 5 is the gap between a customer's perception of the experience and the
customer's expectation of the service - Customers' expectations have been shaped by
word of mouth, their personal needs and their own past experiences. Routine
transactional surveys after delivering the customer experience are important for an
organization to measure customer perceptions of service.

Q3. What is a SERVQUAL? Elaborate it in detail with the help of a diagram and also give its
advantages.
A3. SERVQUAL: - SERVQUAL is a theory of measuring service quality as taken by
customers. The SERVQUAL questionnaire is used to help service organisations better
understand the service expectations and perceptions of their customers and it operates and
measures service quality along five dimensions which are: tangibles, reliability, responsiveness,
assurance and empathy.
Elaborate it in detail with the help of a diagram:

SERVQUAL is a multi-item scale developed to assess customer perceptions of service

quality in service and retail businesses (Parasuraman et. al., 1988). The scale decomposes
the notion of service quality into five constructs as follows: Tangibles - physical facilities,
equipment, staff appearance, etc.

Reliability - ability to perform service dependably and accurately

Responsiveness - willingness to help and respond to customer need

Assurance - ability of staff to inspire confidence and trust

Empathy - the extent to which caring individualized service is given

SERVQUAL represents service quality as the discrepancy between a customer's expectations for
a service offering and the customer's perceptions of the service received, requiring respondents to
answer questions about both their expectations and their perceptions (Parasuraman et. al., 1988).
The use of perceived as opposed to actual service received makes the SERVQUAL measure an
attitude measure that is related to, but not the same as, satisfaction (Parasuraman et. al., 1988).
Parasuraman etc. al. (1991) presented some revisions to the original SERVQUAL measure to
remedy problems with high means and standard deviations found on some questions and to
obtain a direct measure of the importance of each construct to the customer.

Advantages of SERVQUAL: In current service literature, there are a number of key instruments available for measuring
service quality. Through, the SERVQUAL model has been the major generic model used to
measure and manage service quality across different service settings and various cultural
backgrounds and is valued by academics and practitioners. Below are some of the main
advantages and or reasons to use the SERVQUAL model to measure the level of customer
satisfaction with an organization.
It can be used on a regular basis to track customer perceptions of service quality of a particular
firm compared to its competitors. Once data have been analyzed they can be visually presented
so that it is easy to identify strengths and weaknesses relative to competition.
It provides the opportunity for a firm to assess its service quality performance on the basis of
each dimension individually as well as the overall dimensions;

It allow the firm to classify its customers into different segments based on their individual
SERVQUAL scores;
SERVQUAL model can be used in various service setting/sectors and provides a basic skeleton
that can be adapted to fit the specific attributes of a particular organization. It is applicable across
different empirical context and various countries and cultural backgrounds
SERVQUAL gap analysis approach seems a logical and straightforward concept and the
questionnaire is also pre-described and can be adapted as required;
Finally, SERVQUAL is a tried and tested instrument which can be used comparatively for
benchmarking purposes. It benefit from being a statistically valid instrument as a result of
extensive field testing and refinement (Al Bassam & Al Shawi, 2010).
To appreciate more fully all the benefits of using SERVQUAL surveys should be conducted
every year, for the following reasons;
To allow yearly comparison;
To determine how service improvements have affected customers perceptions and expectations
of the service over time and;
To determine the effectiveness of service development and improvement initiatives in targeted
dimensions.
Implementing SERVQUAL and measuring customer perception and expectation of service may
well result in customer retention, customer loyalty and positive word-of-mouth, increasing
opportunity for cross-selling, employee benefits, improved corporate image, profit gains and
financial performance. But measuring too often may well result in customers losing their
motivation to answer correctly (Shadin, 2006).
Q4. What is e-CRM and how is it different from CRM.

A4. E-CRM: - is an acronym for electronic customer relationship management which is focused
management of the whole e-business relationship in regard to every each customer. This is in
order to create measure and increase income and minimize costs for each customer and segment
and therefore generate greater positive lifetime value. It helps the business to operate more
efficiently and profitably.
The Difference between CRM & e-CRM: - Customer relationship management (CRM)
systems provide business owners with the strategy, system and tools to help them interact with
their customers. In the late 1990s, the Internet and electronic commerce changed CRM, and a
new term, electronic customer relationship management (ECRM), was born. Today there is little
difference between the two. ECRM is typically considered to be the natural evolution of CRM
and not the separate business strategy it once was.
The Relationship between Business and Customer: - The role of CRM in business is to define
the processes and systems that enable a business to form, manage and track relationships and
communications with its customers.
Electronic commerce and the Internet contributed to a change in CRM and the relationship
between the customer and the business. From obtaining customer support to making a purchase
online, consumers wanted options to communicate with a business electronically over the
Internet.
ECRM was forged to meet the growing needs of businesses wanting to build and manage Webbased customer communications and support.
Customer Relationship Management (CRM): - CRM is not a new technology; it was a
standard business process long before people used the Internet to communicate. The phrase
"customer relationship management" is used to mean the strategy used by a business to interact
with anyone it conducts business with, including customers, clients and sales prospects. CRM
systems define the way a business handles its sales, marketing and support projects to meet the
goal of nurturing existing customer relationships and forming new ones.
Traditionally, CRM is a set of processes and systems used in physical business locations, such as
offices or a physical retail space (also called "brick and mortar" business).

Electronic Customer Relationship Management (ECRM): - In the late 1990s it was evident
that the Internet would change the brick-and-mortar business model. The onset of Web-based
communications and electronic commerce (e-commerce) changed not only how business was
conducted but also the way in which a business could communicate with its customers.
This change required a business to invest in new hardware, systems and Web applications. There
was a need to develop new processes to manage customer relations, marketing, and sales and
support using the Web for those business processes.
The terminology was updated to Electronic Customer Relationship Management (ECRM) to
reflect the new hardware and systems required by a business to make use of new Web-based
technologies, such as self-service customer support, email and online sales.
The Difference between CRM and e-CRM: - The lines that once defined CRM and ECRM as
two different business strategies barely exist now, leaving the names themselves to be the biggest
difference. ECRM was a popular term when the shift to e-commerce and Web-based customer
self-service applications was on the horizon, but today, many industry experts believe that
ECRM as a separate term is not necessary.
This is because ECRM implies processes that are a natural evolution of CRM. Most industry
experts and CRM vendors today do not use ECRM to describe systems, but rather use CRMwhich in newer systems incorporates ECRM strategies, tools and applications.