There are four central tasks facing managers in the service industry, they are; * Managing quality * Managing productivity * Managing service staff * Achieving differentiation
Managing Quality The single most important factor of a service is its quality. This determines the long-term profitability and market share of the firm. However, quality is very hard to define in the service sector. Many have suggested doing it right the first time or having zero defects, but few have achieved these objectives on a consistent basis.
First, it's hard to measure quality because there is nothing physical to measure. There is no fuel consumption or music power to rate. Second heterogeneity means that consistency can rarely be achieved. Third, the inseparable nature of production and consumption make it difficult for firms to control the quality process.
Lastly, the interaction of staff and customers means that customers evaluate not only the outcomes, but also in terms of the process or manner in which the service is delivered. The difference can be a smiling waitress as opposed to a frowning one.
Managers have to focus on the determinants of quality, as follows; * Reliability - how consistent is the service * Access - is the service easily accessible * Credibility - can consumers trust the company * Security - is the service free from risk and danger * Knowledge - is every effort made to understand the needs of the customer * Responsiveness - how willing are employees to provide service * Competence - do staff have the knowledge and skills to give good service * Communication - does the company clearly explain its service * Tangibles - does the appearance of personnel, the facility project an image of high quality
Customers judge quality by comparing the service with tier expectations and performance. If they perceive that quality exceeds expectations, they are satisfied, or even delighted. If performance falls below expectations, they will be dissatisfied and are likely to look for alternatives. The expectations of customers are created by past experiences, word-of-mouth, advertising and other forms of communication.
Four problems can cause a gap between what consumers expect and what they perceive they must receive. 1. Management misperception - understanding the important service attributes by customers 2. Mis-specification of service quality - management are unwilling, unable or simply do not care enough to put resources into solving the problem. 3. Service delivery gap - problem is recognised but front-line staff are not motivated or incapable of consistently achieving service targets. 4. Communication that promises too much - even good service is judged harshly if it exaggerates the level.