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Chapter 8: Designing Quality Services
Chapter Outline
• Differences between Services and Manufacturing
• What Do Services Customers Want?
• SERVQUAL
• Designing and Improving the Services Transaction
• The Customer Benefits Package
Overview
To provide quality service, we need to examine the service and understand it to
the same level as we did a product. Even manufacturing firms depend on service at some
point in the product life cycle. Quality service is therefore important in both the service
and manufacturing environment. Both the service and manufacturing depend on satisfied
customers for continuing business.
This chapter discusses the factors of service, both from a generic and a quality
perspective. It then discusses some of the tools such as SERVQUAL and gap analysis
that can be used to enhance a quality service environment.
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Discussion Questions
1. Discuss the ways in which services are unique in comparison with manufactured
goods. How do these differences affect the management of service quality?
The text discusses a few differences:
a. Services tend to be intangible. They cannot be picked up and carried out or stored
2. Provide an example of customer coproduction other than the example provided in
the text. What are the advantages and disadvantages of customer coproduction for
service providers?
The text defines coproduction as a situation wherein the customer and the service
provider work closely to produce the service. The examples used by the text are: a haircut
3. Are quality techniques in the service industry well developed or still fairly
immature? If you believe that they are immature, why do you think that this is the
case?
Answers will vary. The text does not address this point specifically, however, it does
make a point of mentioning that product quality has a longer history than service quality.
The example used is that the ski resorts in the Rocky Mountain region are still being
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4. Why do you believe that quality techniques in the service industry are less mature
than quality techniques for manufactured products? What can be done to bring
quality techniques for the services industry up to a higher level?
As discussed in question 3, product quality has been in existence far longer than service
quality. Tools such as SERVQUAL and gap analysis are being pressed into use. Concepts
5. Discuss the distinction between voluntary services and involuntary services. Why
is this distinction important in our understanding of service quality?
When we seek and employ a service, it is a voluntary service. Examples are gas stations,
tax preparers, or carpenters. If we go to the doctor’s office, then the doctor is providing a
6. Are the Baldrige criteria applicable to service situations? If so, how?
The Baldrige Award is given in five categories: manufacturing, service, small business,
7. List Zeithamel, Parasuraman, and Berry’s five dimensions of service quality. Is
the list identical for every service provider, or does it vary from company to
company? Explain your answer.
Zeithamel, Parasuraman, and Berry identified five dimensions of service quality:
• tangibles
8. Discuss some of the qualities of an effective leader in a service context.
Zeithamel, Parasuraman, and Berry stress leadership as a key value in service quality. On
page 185, Table 8-1 lists the dimensions of leadership as: service vision, high standards,
and in-the-field leadership style.
9. What is SERVQUAL? How does SERVQUAL help a firm assess its service
quality?
10. What are the advantages of the SERVQUAL instrument?
On page 187, there is a list of the advantages of using this tool:
• It is accepted as a standard for assessing different dimensions of services quality.
11. Discuss the concept of gap analysis in the context of a SERVQUAL assessment.
Gap analysis looks at the “gap” between customer expectations and customer
perceptions. SERVQUAL questionnaires are specifically designed to enable this analysis.
On page 190, Figure 8-3, five principle gaps are illustrated.
12. What is a service blueprint? How is a service blueprint developed?
A service blueprint is a graphic representation of the steps involved in performing a
service. The blueprint identifies potential failure points. On page 195, Figure 8-5, the
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13. Describe the concept of moment of truth in a service context. Describe a moment
of truth that you recently experienced as a consumer. Was your service experience
satisfactory or unsatisfactory? Explain your answer.
The moment of truth is that moment when the customer notices that there is a problem
with the service. Either an expected service does not occur, or a service is performed that
14. How can the moment-of-truth concept be used as a training tool in a service
setting?
On page 197, the text identifies three basic approaches to using the moment of truth
concept as training.
Poka-yoke (or fail-safes) is designed to isolate potential areas for failure and insure that
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15. What is a customer benefits package? What is the purpose of developing
customer benefits packages in a service context?
A CBP consists of both tangibles that define the service as well as intangibles that make
up the service. The tangibles are known as good content. Intangibles are referred to as
16. In what ways will the globalization of services alter the way that businesses
manage their service quality?
We have seen major worldwide changes in that last two decades. Countries that were
formerly heavy manufacturing countries, such as the U.S., Japan, India, and much of the
17. Discuss the initiatives that the U.S. government has taken to increase its
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emphasis on service quality. Are they effective?
The text starts this section with the statement: If customer service is the battlefield for
business in the twenty-first century, then government is probably the last frontier.
The term “government service” has been considered an oxymoron. Voters have been
getting more involved in the way our governments—local, state, and federal—conduct
business. Recently, there was a complete overhaul of the customer service arm of the
IRS. The text notes several factors that seem to be driving change in the government’s
adaptation of quality techniques. These factors include:
18. Discuss several of the factors that have contributed to an increase in attention
directed toward quality in health care.
Every newscast or newspaper seems to have a comment on the rising cost of healthcare.
The Baby Boomers, a huge proportion of our society, have aged and have greater need
for medical assistance. The rising price of utilities affects every situation. On page 203,
the text lists the following:
19. Discuss the unified theory for services management developed by Dr. Scott
Sampson. Do you agree or disagree with the principles underlying Sampson’s
theory? Explain your answer.
The Unified Theory of Services Management developed by Dr. Scott Sampson provides
unique insight into the challenges of service management. Dr. Sampson’s theory is based
on four propositions:
20. In your judgment, will the management of “service quality” ever progress as far
as the management of “manufactured goods quality”? Please make your answer as
substantive as possible.
To answer this question and lead the class through a discussion, it is probably wise to
Case 8-1: Google Designs Quality Services with Customers in Mind
1. Think about the Internet search engine that you use the most often. If it is Google,
what is it about Google that attracts you as a user? If it is not Google, what could
Google learn from the search engine that you use that could help make it better?
Search engines such as Google and Yahoo! are no longer simple search engines: the
functionality has expanded to include many services. They both have a rich set of
2. What parallels do you see between developing a high-quality service product and
a high-quality manufactured product? Make your answer as substantive as possible.
One reason that Google has established such a large customer base is that it has worked
hard to determine what its customers want and has designed features into its website to
3. Is Google a company that was simply at the right place at the right time, or are
many of its service innovations truly unique? Explain your answer.
Did Google create its niche? Google provided a complete environment for the user. The
Case 8.2: UPS: Delivering the Total Package in Customer Service
1. Based on the description of UPS, what do you believe are UPS’s strengths and
weaknesses?
Much like Yahoo!, UPS created its own niche market. This has spawned a host of
competitors such as Federal Express. The United States Postal Service (USPS) has built
2. How has UPS used technology in its design of quality services? Make your answer
as substantive as possible.
3. Describe a positive or negative experience that you have had with UPS (or one of
its competitors such as FedEx or the U.S. Postal Service). If the experience was
positive, reflect on whether the experience is consistent with UPS’s new emphasis on
customer needs. If the experience was negative, what could UPS have done to better
satisfy your need?
A few situations in which one can differentiate between these services include normal
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Suggested Answers to End of Chapter Problems
1. A national electronics retail chain charges $350 for a service contract. Of this,
the company sends $120 to an insurer. Calculate the profit margin for the
service contract.
2. Using the example of the service transaction analysis (STA) worksheet, chart
and evaluate the transactions for your university or college advising office.
Report your findings and overall evaluation.
Answers will vary. Below is a template to distribute to the students:
Organization:
Process:
Customer Type:
Service
Concept:
Score
SERVICE TRANSACTION ANALYSIS SHEET
3. Develop a consumer benefits package for a service business in your community.
Be exhaustive and explicit in you package identification.
4. Develop a services blueprint for a local car wash. Identify possible fail points,
back-office processes, and fail-safes.
5. Recently, a medical office administered the SERVQUAL survey to its customers
as a way to determine where it should focus the process improvement. Forty
surveys were administered to customers before and after they were treated. On
the basis of the 40 responses, the following averages were computed for each
item. Using the averages in the table that follows, compute dimension averages.
Based on your findings, which dimensions should be emphasized?
Item Perception Average Expectation Average Differences
2 5.4 2.4 3.0
4 5.8 2.8 3.0
6 4.4 4.1 0.3
8 2.5 4.9 -2.4
10 6.2 3.4 2.8
12 6.6 3.4 3.2
14 3.1 3.2 -0.1
16 3.3 3.4 -0.1
18 3.2 3.5 -0.3
20 1.8 6.6 -4.8
22 1.4 6.3 -4.9
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Using the averages in the table, compute dimension averages. Based on your
findings, which dimensions should be emphasized?
Answer:
6. For the data in problem 5, perform a two-dimensional differencing analysis. Do
your results differ from your answer in problem 5?
Expectations
8
7. The averages for different dimensions of service quality were computed by
averaging the items pertaining to the dimensions. Use the following data to
determine which dimensions to emphasize.
Perceptions Expectations
Tangible = 5.40 1.42
Reliability = 3.20 6.40
Responsiveness = 2.45 2.30
Assurance = 5.60 3.30
Empathy = 1.90 6.40
a. Using simple differencing, determine which dimensions should be
emphasized.
Answer:
b. Use two-dimensional differencing to determine which dimensions should
be emphasized.
Answer:
c. Based on your findings, choose the most important dimension and
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8. A state university wants to perform a gap analysis to determine what student traits
corporate CEOs find most important. The exercise is to be administered to CEOs and
involves two surveys – an expectations survey and a perceptions survey. All questions
are answered on a 10-point scale. The attributes the CEOs are asked to rate are
propensity for life-long learning, ability to work in teams, innate ability, and cognitive
ability. The results of nine surveys are synopsized in the text table:
Perform a gap analysis by developing a two-dimensional plane and evaluate the results.
Answer:
Lifelong
Learning
Teamwork
Innate
Abilities
Cognitive
Abilities
Differences
describe how you would develop a process improvement program to address
the dimension that needs to be improved.
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9. Following is a transaction analysis for a movie theater. Please answer the
following questions.
a. Based on the service transaction analysis, what is your assessment of the movie
theater?
In looking at the transaction analysis sheet, we see that although the movie theater knows
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b. In what areas can the movie theater improve?
c. Are there any additional customer touch points you can think of in this process?
What could the company do to make them a positive experience?
Have the students think about the last time they went to a movie. Were the coming
10. Following is a service transaction analysis for a lube shop. Answer the following
questions.
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a. Based on the service transaction analysis, what is your assessment of the lube
shop?
b. In what areas can the lube shop improve?
Although they seem to being doing a pretty good job overall, it does appear that they
c. Are there any additional customer touch points you can think of in this process?
What could the company do to make them a positive experience?
Have the students think about the last time they took their car in to have an oil change.