“Service Marketing”, Valarie A.

Zeithaml & Mary Jo Bitner

Dr. Poonam Madan

 Formal means to identify and correct gaps
between desired levels and actual levels of
performance

 Used by organizations to analyze certain

processes of any division of their company

3
 Expected level of service vs.
Actual level of service provided

 SERVQUAL
- 5 gaps
- 5 dimensions

4
 If one accepts the view that quality entails
consistently meeting customers’ expectations, then
the service manager’s task is to balance customer
expectations and perceptions and to close any
gaps between the two. Zeithaml, Berry and
Parasuraman (1988) identify four potential
shortfalls within the service organisation that may
lead to a gap between what customers expect and
what they receive;
I. Not knowing what customers expect.
II. Specifying service quality standards that do not
reflect what management believes to be customers’
expectations.
III. Service performance does not match specifications.
IV. Not living up to the levels of service performance
that are promised through the service
organisation’s marketing communications activities.
 The Five Gaps Model, as subsequently developed by
Parasuraman, Berry and Zeithaml, positions the key
concepts, strategies and decisions in services
management and marketing in a manner that
begins with the customer and builds the
organisation’s tasks around what is needed to close
the gap between customer expectations and
perceptions.
 The central focus of the gaps model is the customer
gap, the difference between customer expectations
and perceptions. Firms need to close this gap in
order to satisfy their customers and build long-
term, mutually beneficial, relationships with them.
 To close this all-important customer gap, the four
provider gaps need to be closed.
 For services, the assessment of quality is
made during the service delivery process.

 Customer satisfaction can be measured as

the difference between the customer’s service
expectation and the service actually received.
 Measuring the gap between expected service
and perceived service is a routine customer
feedback process practiced by many
companies
 The service quality of a firm is tested at each
service encounter.
 Customer Expectations
 A) Customers form service expectations from

many sources:
 Past experiences.
 Word-of-mouth.
 Advertising
 B) In general, customers compare the
perceived service with the expected service.
 If the perceived service falls below the
expected service customers are disappointed.
 If the perceived service meets or exceeds
their expectations they are apt to use the
provider again.
 C) Successful companies add benefits to
their offering that not only satisfy customers
but also surprise and delight them.
 D) Delighting customers is a matter of
exceeding expectations.
 Parasuraman, Zeithaml, and Berry
formulated a service-quality model that
highlights the main requirements for
delivering high service quality that identifies
five gaps that cause unsuccessful delivery:
 The model focuses on strategies and
processes that firm can employ to drive
service excellence while maintaining a focus
on customers.
 It is the model that can drive strategies as

well as implementation decisions.

 Figure shows the service quality model.
 Gap between consumer expectations and
management perception.
 Gap between management perception and
service-quality specification.
 Gap between service-quality specifications and
service delivery.
 Gap between service delivery and external
communications.
 Gap between perceived service and expected
service.
 THE PBZ FIVE GAP MODEL

Word of Mouth Personal Needs Past Experience

Communication

Expected Service

Gap 5

Perceived Service

Provider Service Delivery Gap 4 External

(including pre- Communications
and post- contacts) to Consumers

Gap 3
Gap 1
Translation of
Perceptions into
Service Quality
Specs.

Gap 2
Management Perceptions
of Consumers Expectations
 Word-of-Mouth Personal Needs
Communications Past Experience

Expected Service
Gap 5
Customer
Perceived Service
Gap 1 Gap 4 External
Service Delivery Communications
Gap 3
to Customers

Service Quality
Specifications
Provider Gap 2

Management Perceptions of
Customer Expectations

Chapter 8 – Service Quality

8
 The Difference between Customer
Perceptions & Expectations

Customer
Expectations
Customer GAP

Perceived
Service

“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

Dr. Poonam Madan
 Gap 1
◦ The difference between actual customer
expectations and management’s idea or
perception of customer expectations

M a na ge m e nt E x p e c te d
P e r c e p t io n s S e r v ic e
o f C u s to m e r
E x p e c t a t io n s
7
Difference between what customers expect and
management perceptions of customer expectations
Causes Strategies
 Failure of  Communicate with
management to customers
identify consumer  Conduct market research
expectations  Encourage upward
communication
 Decrease layers of
management

Source: Valarie A. Zeithaml, Leonard L. Berry, and A. Parasuraman, “Communication

and Control Processes in the Delivery of Service Quality,” Journal of Marketing, Vol. 52
(April 1988), pp. 35-48.
 Customer Expectations
Customer
GAP

• Provider Gap 1: Not knowing what customers expect

• Provider Gap 2: Not selecting the right service designs & standards
• Provider Gap 3: Not delivering to service standards
• Provider Gap 4: Not matching performance to promises

Customer Perceptions

“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

Dr. Poonam Madan
  Not Knowing What Customers Expect
Expected
CUSTOMER Service

GAP 1

Company
Perceptions of
COMPANY Customer
Expectations
“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner
Dr. Poonam Madan
 Customer Expectations
Provider
GAP 1
• Insufficient Relationship Focus
Lack of market segmentation
Focus on transactions rather than relationships
Focus on new customers rather than relationship customers
• Inadequate Service Recovery
Lack of encouragement to listen to customer complains
Failure to make amends when things go wrong
No appropriate recovery mechanisms in place to service
failures

Company Perceptions of
Customer Expectations
“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner
Dr. Poonam Madan
 Customer Expectations
Provider
GAP 1 • Inadequate Marketing Research Orientation
Insufficient marketing research
Research not focused on service quality
Inadequate use of market research
• Lack of Upward Communication
Lack of interaction between management & customers
Insufficient communication between contact employees & managers
Too many layers between contact personnel & top management

Company Perceptions of
Customer Expectations

“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

Dr. Poonam Madan
CUSTOMER
 KEY FACTORS LEADING
EXPECTATIONS. TO GAP #1;
 Inadequate Marketing
Research Orientation:
 Insufficient marketing
research.
COMPANY  Research not focused on
PERCEPTIONS service quality.
OF CUSTOMER  Inadequate use of market
EXPECTATIONS. research.
II. Lack of Upward Communication
 Lack of interaction between management and
customers.
 Insufficient communication between contact
employees (BSPs) and managers.
 Too many layers between contact personnel and
top management.
III. Insufficient Relationship Focus:
 Lack of market segmentation.
 Focus on transactions rather than relationships.
 Focus on new customers rather than
relationship customers.
IV. Inadequate Service Recovery.
 Get a better understanding of customer expectations
through survey research, complaint analysis, customer
panels, individual depth interviews etc.
 Increase direct interactions between service managers
and customers to improve empathy and
understanding.
 Improve upward communication from contact
personnel (BSPs) to management and reduce the
number of levels between the two.
 Turn information and insights into action (avoid
paralysis by analysis).
  Not Selecting the Right Service Designs &
Standards
CUSTOMER

Customer-Driven
COMPANY Service Designs &
Standards
GAP 2
Company
Perceptions of
Consumer
Expectations
“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner
Dr. Poonam Madan
 Gap 2
◦ Mismatch between manager’s expectations of
service quality and service quality specifications

S e r v ic e M an ag em en t
Q u a lit y P e r c e p t io n s
S p e c ific a t io n s o f C u s to m e r
E x p e c t a t io n s
8
 Customer-Driven
Provider Service Designs & Standards
GAP 2
• Poor Service Design
Unsystematic new-service development process
Vague, undefined service designs
Failure to connect service design to service positioning
• Absence of Customer-Driven Standards
Lack of customer-defined service standards
Absence of process management to focus on customer requirements
Absence of formal process for setting service quality goals

Management Perceptions
of Customer Expectations
“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner
Dr. Poonam Madan
 Customer-Driven
Provider Service Designs & Standards
GAP 2

• Inappropriate Physical Evidence & Servicescape

Failure to develop tangibles in line with customer expectations
Servicescape design that does not meet customer and employee needs
Inadequate maintenance and updating of the servicescape

Management Perceptions
of Customer Expectations

“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

Dr. Poonam Madan
 CUSTOMER-
 KEY FACTORS
DRIVEN LEADING TO GAP #2;
SERVICE DESIGN &  Poor Service Design:
STANDARDS.  Unsystematic new-
service development
process.
 Vague, undefined
service designs.
MANAGEMENT  Failure to connect
PERCEPTIONS OF service design to
CUSTOMER EXPECTATIONS.
service positioning.
II. Absence of Customer-Defined Standards:
 Lack of customer-defined service standards.
 Absence of process management to focus on
customer requirements.
 Absence of formal process for setting service
quality goals.
 Inappropriate Physical Evidence and
Servicescape.
 Visual.
 Aural.
 Olfactory.
 Tactile.
 Ensure that top management displays continuing
commitment to quality as defined from the
customers’ point of view.
 Get middle management to set, communicate and
reinforce customer-oriented service standards for
their work units.
 Train managers in the skills needed to lead
employees to deliver quality service.
 Become receptive to new ways of doing business
that overcome barriers to delivering quality service.
Difference between management perceptions of
customer expectations and service quality
specifications
Causes Strategies
 Resource constraints  Top management
 Market conditions commitment
 Management  Service quality goals
indifference  Standardization of tasks
 Feasibility of customer
expectations

Source: Valarie A. Zeithaml, Leonard L. Berry, and A. Parasuraman, “Communication and

Control Processes in the Delivery of Service Quality,” Journal of Marketing, Vol. 52 (April
1988), pp. 35-48.
 Standardise repetitive work tasks to ensure
consistency and reliability by substituting hard
technology for human contact and improving
work methods (soft technology).
 Establish clear service quality goals that are
challenging, realistic and explicitly designed to
meet customer expectations.
 Clarify to employees which job tasks have the
biggest impact on quality and thus should receive
the highest priority.
 Ensure that employees understand and accept
(have bought into) goals and priorities.
 Measure performance and provide regular
feedback.
 Reward managers and employees for attaining
quality goals.
  Not Delivering to Service Standards
CUSTOMER

Service Delivery
COMPANY
GAP 3
Customer-Driven
Service Designs &
Standards

“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

Dr. Poonam Madan
 Gap 3
◦ Poor delivery of service quality

S e r v ic e S e r v ic e
D e liv e r y Q u a lit y
S p e c ific a t io n s
9
 Customer driven service
designs and standards
Provider
GAP 3 • Deficiencies In Human Resource Policies
Ineffective recruitment
Role ambiguity and role conflict
Poor employee-technology job fit
Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control and teamwork
• Customers Who Do Not Fulfill Roles
Customers lack knowledge of their roles and responsibilities
Customers negatively affect each other

Service delivery
“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner
Dr. Poonam Madan
 Customer-Driven
Service Designs & Standards
Provider
GAP 3
•Problems with Service Intermediaries
Channel conflict over objectives and performance
Difficulty controlling quality and consistency
Tension between empowerment and control
•Failure to Match Supply & Demand
Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Over-reliance on price to smooth demand

Service Delivery

“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

Dr. Poonam Madan
Difference between service quality specifications
and delivery of specifications
Causes Strategies
 Employees unaware of  Enhance teamwork
specifications  Ensure employee-job
 Employees do not have fit
skills  Ensure technology-job
 Employees unwilling to fit
perform work  Employee control
 Supervisory system
 Reduce role conflict
 Reduce role ambiguity
Source: Valarie A. Zeithaml, Leonard L. Berry, and A. Parasuraman, “Communication and
Control Processes in the Delivery of Service Quality,” Journal of Marketing, Vol. 52 (April
1988), pp. 35-48.
  KEY FACTORS LEADING TO
GAP #3:
SERVICE
DELIVERY.
 Deficiencies in Human
Resource Policies;
 Ineffective recruitment.
 Role ambiguity and role
conflict.
 Poor employee-technology job
fit.
CUSTOMER-  Inappropriate evaluation and
DRIVEN compensation systems.
SERVICE DESIGN  Lack of empowerment,
& STANDARDS. perceived control and
teamwork.
II. Failure to Match Supply and Demand
 Failure to smooth peaks and valleys of demand.
 Inappropriate customer mix.
 Over-reliance on price to smooth demand.
III. Customers not Fulfilling Roles
 Customers lack knowledge of their roles and
responsibilities.
 Customers negatively affect each other.
IV. Problems with Service Intermediaries
 Channel conflict over objectives and
performance.
 Channel conflict over costs and rewards.
 Difficulty controlling quality and consistency.
 Tension between empowerment and control.
 Clarify employee roles.
 Ensure that all employees understand how their jobs
contribute to customer satisfaction.
 Match employees to jobs by selecting on the basis of
the abilities and skills needed to perform each job
well.
 Provide employees with the technical training needed
to perform their assigned tasks effectively.
 Develop innovative recruitment and retention methods
to attract the best people and build loyalty.
 Enhance employee performance by selecting the most
appropriate and reliable technology and equipment.
 Teach employees about customer expectations,
perceptions and problems.
 Train employees in interpersonal skills, especially
for dealing with customers under stressful
conditions.
 Eliminate role conflict among employees by
involving them in the process of setting service
quality standards.
 Train employees in priority setting and time
management.
 Measure employee performance and tie
compensation and recognition to delivery of quality
service.
 Develop reward systems that are meaningful,
timely, simple, accurate and fair.
 Empower managers and employees in the field by
pushing decision-making power down the
organisation; allow them greater discretion in the
methods they use to reach goals.
 Ensure that employees working at internal support
jobs provide good service to customer contact /
boundary spanning personnel.
 Build teamwork so that employees work well
together, and use team rewards as incentives.
 Treat customers as “partial employees”; clarify their
roles in service delivery, train and motivate them to
perform well in their roles as co-producers.
  Not Matching Performance to Promises
CUSTOMER

GAP 4 External
Service Delivery Communications
COMPANY to Customers

“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

Dr. Poonam Madan
 Gap 4
◦ Differences between service delivery and external
communication with customer

S e r v ic e E x te rn a l
D e liv e r y C o m m u n ic a t io n s
to C u s to m e rs
10
 Service Delivery
Provider
GAP 4
• Lack of Integrated Services Marketing Communications
Tendency to view each external communication as independent
Absence of interactive marketing in communications plan
Absence of strong internal marketing program
• Ineffective Management of Customer Expectations
Absence of customer expectation management through all forms of communication
Lack of adequately education for customers

External Communications
to Customers
“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner
Dr. Poonam Madan
 Service Delivery
Provider
GAP 4 • Overpromising
Overpromising in advertising
Overpromising in personal selling
Overpromising through physical evidence cues
• Inadequate Horizontal Communications
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches or units

External Communications
to Customers

“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

Dr. Poonam Madan
Difference between service delivered and external
communications

Causes Strategies
 Poor or lack of  Increase horizontal
communication communications
 Over-promising  Avoid propensity to
over-promise

Source: Valarie A. Zeithaml, Leonard L. Berry, and A. Parasuraman, “Communication

and Control Processes in the Delivery of Service Quality,” Journal of Marketing, Vol. 52
(April 1988), pp. 35-48.
  KEY FACTORS LEADING TO
GAP #4:
SERVICE
DELIVERY. I. Lack of Integrated
Marketing
Communications
 Tendency to view each
external communication as
independent.
EXTERNAL  Not including interactive
COMMUNICATIONS marketing communication
TO CUSTOMERS. in communications plan.
 Absence of strong internal
marketing programme.
II. Ineffective Management of Customer Expectations
 Not managing customer expectations through all
forms of communication.
 Not adequately educating customers.
III. Over-promising
 Over-promising in advertising, personal selling
and through physical evidence cues.
IV. Inadequate Horizontal Communications
 Insufficient communication between sales and
operations.
 Insufficient communication between advertising
and operations.
 Differences in policies and procedures across
branches and units.
 Seek inputs from operations personnel when new
marketing communications programmes are being
created.
 Develop advertising that features real employees
performing their jobs.
 Allow service providers to preview advertisements
before customers are exposed to them.
 Get sales staff to involve operations staff in face-to-
face meetings with customers.
 Develop internal educational, motivational and
advertising campaigns to strengthen links between
marketing, operations and human resource
departments / functions.
 Ensure that consistent standards of service are
delivered across multiple locations.
 Ensure that advertising content accurately reflects
those service characteristics that are most
important to customers in their encounters with the
organisation.
 Manage customers’ expectations by letting them
know what is and is not possible – and the rationale
behind such determinations.
 Identify and explain uncontrollable reasons for
shortcomings in service performance.
 Offer customers different levels of service at
different prices, explaining the differences between
these levels and the logic underpinning the
associated alternate prices.
 Gap 5
◦ Differences between Expected and Perceived
Quality

E x p e c te d P e r c e iv e d
S e r v ic e S e r v ic e
11
12
 Expected
Customer Service
GAP Perceived
CUSTOMER
Service

GAP 4
COMPANY
Service Delivery External
GAP 3 Communications
Customer-Driven to Customers
GAP 1
Service Designs and
Standards
GAP 2
Company Perceptions of
Consumer Expectations
“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner
Dr. Poonam Madan
 Gaps can be found in any process of an
organization’s operations
 Tools like SERVQUAL, Two-Dimensional
Analysis, and ISO 9001 2000 can all be used
to perform gap analysis
 Gap Analysis is one of the best procedures
to help lead a company to not only improve
their processes, but recognize which
processes are in need of improvement.

26
Gap Problem Cause(s)

1. Consumer The service features offered Lack of marketing research; inadequate upward
expectation – mgmt. don’t meet customer needs communication; too many levels between contact
perception personnel and management

2. Management The service specifications Resource constraints; management indifference;

perception – service defined do not meet poor service design
quality specification management’s perceptions of
customer expectations

3. Service quality Specifications for service meet Employee performance is not standardized;
specification – customer needs but service customer perceptions are not uniform
service delivery delivery is not consistent with
those specifications

4. Service delivery – The service does not meet Marketing message is not consistent with actual
external customer expectations, which service offering; promising more than can be
communication have been influenced by delivered
external communication

5. Expected service Customer judgments of A function of the magnitude and direction of the
– perceived service high/low quality based on gap between expected service and perceived
expectations vs. actual service service